FFBL Posts Rs. 7.6 Billion Profit in Q1 2024

Fauji Fertilizer Bin Qasim Limited (PSX: FFBL) has announced its financial results for the three months that ended on March 31, 2024, (1QCY24), wherein the company posted a consolidated profit after tax (PAT) of Rs. 7.62 billion compared to a loss of Rs. 4.6 billion in the same period last year.

Along with the result, the company didn’t announce any dividend payout for its shareholders for the quarter.

Net sales of the company increased by 36 percent to Rs. 53.7 billion in 1QCY24 from Rs. 39.6 billion in SPLY.

In a brief commentary, FFBL attributed Q1 earnings to the first-quarter profit of the parent company. “The improved financial performance of our joint venture (PMP) has also contributed a profit after tax of Rs. 1.7 Bn in the consolidated results as compared to a loss of Rs. 1.8 Bn in SQLY,” it said.

Gross margins arrived at 23.2 percent in 1QCY24 compared to 12.8 percent in 1QCY23. Selling and Distribution expenses increased by 148 percent to Rs. 2.8 billion during the period in review.

Other Income increased by 555 percent to Rs. 6.7 billion in 1QCY24.

FFBL’s tax expense clocked in at Rs. 5 billion in 1QCY24 versus Rs. 638 million in 1QCY23.

Gas curtailment continues to be the biggest challenge for FFBL which has adversely affected urea production. The company received 40 percent less gas against its allocated volume during the quarter. The company urged the government to prioritize this sector for gas supply to avoid fertilizer shortage in the country and save scarce foreign exchange on the import of urea.

The finance cost of the company clocked in at Rs. 1.85 billion during the quarter, down 45 percent compared to Rs. 3.38 billion in 1QCY23.

The company posted earnings per share (EPS) of Rs. 5.54 during the period under review compared to a loss per share of Rs. 3.76 in SPLY.

As part of its business sustainability growth initiative, the company is expanding its product portfolio by introducing Boron Fortified DAP to enhance yield, promote sustainable agriculture, and strengthen the market share.

Going forward, the supply of allocated volumes of gas and its pricing, DAP price trend in the international phosphate market, domestic DAP market size, and stability of Pak Rupee against the US Dollar will remain critical for the Company’s financial performance.