Fauji Fertilizer Company (FFC) Limited, Pakistan’s largest urea manufacturing company, has announced its unconsolidated financial results for the year ended December 31, 2020.
FFC booked an unconsolidated profit of Rs. 20.81 billion in 2020, up by 22 percent compared to Rs. 17.11 billion earned in 2019. Alongside the result, the company also announced a final cash dividend of Rs. 3.40 per share. This takes the total cash dividend to Rs. 11.20 per share for 2020.
The increase in profitability is primarily attributable to a temporary gain on extinguishment and re-measurement of GIDC liability under the requirements of the International Financial Reporting Standards, which shall reverse in the next four years during the repayment term of GIDC liability as determined by the apex court.
The result was above the market expectations due to a re-measurement gain on GIDC liability.
The company’s sales went down by 7.70 percent to Rs. 97.65 billion compared to Rs. 105.78 billion recorded in 2019 mainly due to lower Dap offtakes and Urea prices. The cost of sales also went down by 12 percent to Rs. 66.07 billion compared to Rs. 75.04 billion. This took the gross profits to Rs. 31.58 billion from Rs. 30.73 billion in 2019.
The company recorded a gain of Rs. 5.9 billion on account of the re-measurement of GIDC liability.
However, the company also recorded an impairment loss of Rs. 1 billion on its subsidiary (Fauji Fresh N Freeze Limited) while the company has also recorded a loss allowance of Rs. 987 million against the subsidy receivable from the government of Rs. 6.96 billion.
Earnings per share of the company were increased to Rs. 5.55 compared to Rs. 3.65.
FFC’s share at the bourse was closed at Rs. 111.45, down by Rs. 2.23 or 1.96%, with a turnover of 3.34 million shares on Thursday.