Fauji Fertiliser Bin Qasim Limited (FFBL) reported a profit of around Rs. 1.26 billion for the first quarter ended March 31, 2021.
The company had reported a loss of Rs. 3.04 billion during the same period last year.
Accordingly, earnings per share of the fertiliser manufacturer were reported at Rs. 0.98 in 1QCY21 compared to a loss per share of Rs. 2.36 in the same period last year. During the first quarter, the company reported net sales of Rs. 13 billion, up 36.16% compared to Rs. 9.55 billion recorded in the same quarter of 2020.
According to a report by Foundation Securities, the increase in the company’s profitability was due to 8.2% year on year increase in DAP offtake amid better DAP primary margins, 61.6% year on year increase in Urea offtake given better retention prices, and a decrease in finance cost.
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Another brokerage house, Ismail Iqbal Securities in its report said that the major deviation in earnings came from higher than expected gross margins (19% vs 16%) which was due to likely lower coal cost incurred by the company.
During 1QCY21, international DAP primary margins recorded at $161/ton vs negative margins of $3/ton in the same period last year. DAP supply chain disruptions continued in this quarter as well, resulting in a 44% quarter-on-quarter increase in international DAP prices.
On a quarter-on-quarter basis, FFBL has also increased DAP price to Rs. 5,250/bag reflecting an increase of 32%.
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Finance cost was reduced by 57% to Rs. 650 million from Rs. 1.51 billion. Other income of the company was increased by 394% to Rs. 1.56 billion compared to Rs. 316 million.
Other income was increased due to higher dividend income from Askari Bank Limited (AKBL) and possibly from power subsidiaries.
Moreover, the board of FFBL has passed a resolution approving the amalgamation of FFBL Foods Limited with and into FFBL.
The scheme is subject to certain regulatory and shareholders’ approval.
FFBL’s scrip at the bourse was closed at Rs. 26.64, down by Rs. 0.23 or 0.86%, with a turnover of 6.70 million shares on Monday.
