FFBL faces Rs4.6 billion exchange loss in Q12023
The rupee dived to Rs178 against the dollar in the open market, reported the Exchange Companies Association of Pakistan. Photo: file
Fauji Fertiliser Bin Qasim Limited (FFBL) reported an exchange loss of Rs4.6 billion in Q12023 and Rs65 million in Q2. The company’s financial results for the period ended June 30, 2023, revealed a gross profit of Rs4.5 billion in Q22023. On a consolidated basis during Q22023, FFBL reported a gross profit of Rs7.9 billion, with an operating profit of Rs5.3 billion and a profit after tax of Rs1.4 billion.
The company attributed its improved performance to the impressive business growth of Fauji Foods Limited, which achieved profit after tax for the first time since its acquisition in 2015. However, FFBL also acknowledged facing ongoing business headwinds throughout the year, especially due to being heavily impacted by the economic crisis in the fertiliser sector.
Unlike other companies securing raw materials domestically, FFBL faced challenges as it had to import its primary raw material, Phosphoric Acid, leading to increased costs. As a result, the company’s earnings in 2Q2023 were lower than industry expectations, reporting a loss after tax of Rs3.24 billion, compared to a profit of Rs4.08 billion in the same period last year.
FFBL also recorded a 1.02% YoY growth in its top line, reaching Rs81.23 billion compared to Rs80.42 billion in the corresponding period last year. However, the cost of sales increased by 8.98% YoY, impacting the gross profit, which declined by 26.89% YoY to Rs13.06 billion in 1HCY23.
The company’s finance costs also surged, rising by 2.27 times YoY, reaching Rs7.12 billion, primarily due to higher interest rates and a carryover of higher DAP inventory.
Published in The Express Tribune, July 22nd, 2023.
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