Fauji Fertilizer Company (FFC) Limited, Pakistan’s largest urea manufacturing company, has announced its financial results for the first quarter ended on March 31st, 2021.
FFC booked an unconsolidated profit of Rs. 5.81 billion for the quarter, surging by 36 percent as compared to Rs. 4.26 billion earned in the same period last year. Alongside the result, the company also announced a cash dividend of Rs. 3.50 per share, i.e., 35 percent.
According to Foundation Securities, the increase in profitability was due to a 16 percent year-on-year increase in Urea prices, barring an impact of Rs. 400/bag GIDC in 1QCY21, increased DAP trading quantum, lower finance cost, and higher other income.
During the first quarter, the company’s gross margins were recorded at 39 percent compared to 36 percent in the same period last year due to GIDC reduction and higher margins on DAP sales.
The company’s sales increased by 5 percent to Rs. 21.58 billion compared to Rs. 20.62 billion recorded in the same period last year, as it recorded urea and DAP offtake of 574,000 and 28,000, respectively. The cost of sales was reported at Rs. 13.15 billion compared to Rs. 13.13 billion.
The company’s finance cost reduced by 38 percent year-on-year to Rs. 420 million in 1QCY21 compared to Rs. 673 million due to 625bps cut in the policy rate and retirement of short-term debt.
Among other major heads, FFC distribution cost declined by 3 percent year-on-year, while other expenses increased by 29 percent year-on-year in 1QCY21.
FFC’s other income increased by 58 percent to Rs. 2.7 billion compared to Rs. 1.72 billion, given a receipt of dividend income from Askari Bank Limited.
Earnings per share increased to Rs. 4.57 from Rs. 3.35.
At the time of filing this report FFC’s share at the bourse was trading at Rs. 105.50, up by Rs. 1.45 or 1.39 percent, with a turnover of 454,627 shares on Wednesday.