Fauji Fertilizer Company Limited, which is Pakistan’s largest urea manufacturing company, announced a profit of Rs. 3.70 billion for the first quarter, ending on March 31st, 2019, showing an impressive improvement of 63.72% as compared to Rs. 2.26 billion in the same period last year.
The revenues for the quarter remained almost flat at Rs. 20.31 billion showing a meager drop of 1.17% as compared with Rs. 20.55 billion in the same period last.
However, the cost of sales of the company decreased by 12.88% to Rs. 14.34 billion as compared with Rs. 16.46 billion in the same period last year which took the gross profit to Rs. 5.96 billion due to lower volumetric sales. The company’s urea sales were recorded at 557,000 tons, down by 15% YoY as the prices went up by 27% YoY (barring subsidy, up by 14% YoY)
The decline in cost of sales was seen due to the high closing inventory of purchased fertilizer (Diammonium Phosphate), stated a brokerage house.
The distribution cost of the company increased to Rs. 2 billion as compared with Rs. 1.92 billion. Moreover, the finance cost ballooned to a whopping 24% getting to Rs. 468 million against Rs. 377 million on account of elevated interest rates. Other operating expenses were Rs. 487 million.
Other income was posted at Rs. 2 billion as compared with Rs. 2.08 billion in the corresponding period.
Earnings per share of the company increased to Rs. 2.91 as compared with Rs. 1.78. The Board of Directors also announced the first interim dividend of Rs. 2.50 per share.
FFC is expanding into power and offshore fertilizer. The company has acquired a 30% stake in 330MW coal mine-mouth power plant of Thar Energy Limited (TEL). Other than that, FFC is also planning to set up a 1.3 million ton fertilizer complex in Tanzania.
FFC’s script at the bourse closed at Rs. 104.62, down by Rs. 0.33 with a turnover of 0.32 million shares on Friday.
