Fauji Fertiliser’s profit jumps 32% to Rs13.2b

Fauji Fertiliser Company announces interim cash dividend of Rs2.20 per share

​ Our Correspondent October 29, 2019
A farmer spreads fertiliser in his rice field. PHOTO: REUTERS

KARACHI: Fauji Fertiliser Company reported an after-tax profit Rs13.2 billion in the nine months ended September 30, 2019, up 32% following improved earnings in the previous quarters.

The company had reported a profit of Rs10 billion in the same period of the previous year, according to a company notice sent to the Pakistan Stock Exchange on Monday.

Earnings per share (EPS) clocked-in at Rs10.39 against Rs7.88 in the same period of last year.

The company also announced an interim cash dividend of Rs2.20 per share taking the nine-month payout to Rs7.55 per share.

“During the period, the company produced 1,861 thousand tonnes of Sona Urea whereas offtake was recorded at 1,773 thousand tonnes with total sales revenue of Rs73.02 billion for the nine-month period,” according to a company press release.

Quarterly results

On the other hand, Fauji Fertiliser Company reported a 14% decrease in its after-tax profit for the quarter.

The company reported earnings of Rs4.6 billion in the quarter under review compared to Rs5.4 billion in the same period of the previous year. EPS of the fertiliser manufacturer stood at Rs3.62 in the quarter against Rs4.27 in the same period of the previous year.

“The fertiliser company’s sales dropped 3% year-on-year during the third quarter of 2019 mainly due to 6% and 38% year-on-year decline in urea and DAP offtake, respectively,” said Arif Habib Limited analyst Tahir Abbas.

Gross margins during the period clocked-in at 25.7%, down six percentage points year-on-year and eight percentage points quarter-on-quarter on account of higher gas prices, he added.

The company did not pass the impact of gas price hike on to the end consumer of urea for the first two months of the third quarter of 2019.

“Financial charges rose by 28% year-on-year due to high working capital requirement along with rising interest rates during the period,” Abbas remarked.

In the quarter, other income surged 2.3 times to Rs1.5 billion on account of higher profit on cash and cash equivalents.

The company booked effective taxation at 32% during the quarter against 36% in the same period of 2018.

Published in The Express Tribune, October 29th, 2019.

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