Fauji Fertilizer Bin Qasim (PSX: FFBL) announced its 3QCY23 financial result today, where it recorded its highest-ever unconsolidated quarterly profit of Rs. 5.3 billion versus a loss of Rs. 1.7 billion reported in the same period last year.
This takes 9MCY23 earnings to Rs. 354 million (EPS: Rs. 0.27), down 79 percent year-on-year (YoY).
The 3QCY23 result came higher than industry expectations due to a lower-than-estimated effective tax rate, according to Topline Securities.
Net sales of the company increased by 210 percent YoY to Rs. 70 billion due to a jump in DAP offtake by 5x YoY to 344,000 tons. However, the urea offtake declined by 31 percent YoY to 73,000 tons. Additionally, higher retention prices also played a role in boosting net sales.
Gross Margins reduced by 1.9 percentage points YoY to 14.8 percent in 3QCY23. Selling and Distribution expenses increased by 131 percent YoY due to an increase in volumetric sales of DAP.
Other Income increased by 196 percent YoY to Rs. 2.8 billion in 3QCY23 due to higher interest income and income from mutual funds. Other income also includes a gain on the sale of the entire holding in Fauji Meat Limited to the tune of Rs. 268 million.
Higher borrowings and higher interest rates led to a 98 percent YoY increase in finance cost to Rs. 2.3 billion.
FFBL’s tax expense clocked in at Rs. 5.3 billion (effective tax rate of 26.1 percent) in 3QCY23 versus tax reversal of Rs. 1.7 billion in 3QCY23.
The company posted earnings per share (EPS) of Rs. 4.1 during the period under review compared to a loss per share of Rs. 1.31 in SPLY.
At the time of filing, FFBL’s scrip at the bourse was Rs. 16.2, down by 2.53 percent or Rs. 0.42 with a turnover of 2,940,500 shares on Tuesday.
