Fauji Fertilizer’s profit increases 29%

Helped along by strong sales, stable prices of agricultural inputs.

KARACHI: The Fauji Fertilizer Company has posted a 28.9% rise in profit to Rs4.9 billion in the January-March 2013 quarter on back of higher sales and stable prices of key agricultural inputs. The company’s earnings have clocked in at Rs3.86 earned for every share of the company. It has also announced a cash dividend of Rs3.5 per share.

Revenues jumped 45% to Rs16 billion, compared to last year, on the back of increasing sales volumes, analysts said.

The company saw a slight decrease of 3.7% in its distribution costs to Rs1.29 billion, but gross margins also came down 2.9 percentage points to 47.5% because of relatively lower urea prices.

Fauji Fertilizer’s other income was lower by 30% year-on-year to Rs1.5 billion as a result of lower dividend income from Fauji Fertilizer Bin Qasim (FFBL).



“Going forward, we see steady performance on the part of Fauji,” said Abdul Azeem, analyst at Invest Capital Markets. “There have been issues with gas supply to fertiliser makers, but Fauji has dedicated supplies from Mari Gas so there is not much to worry about on this front.”

According to AKD Securities, urea prices are expected to remain stable throughout the year. The company also stands to benefit from lower imports and better dividend income from FFBL in the second half of year, it said.

Published in The Express Tribune, April 30^th, 2013.

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