Corporate results: Fatima Fertilizer grows a stunning 72%

Increase in off-takes fuels upsurge in profits.

KARACHI: Fatima Fertilizer posted a stunning growth of 72% in its third quarterly results of calendar year 2013 (3QCY13) announced on Monday.

The company reported net after-tax profit of Rs2.43 billion, bringing earnings per share to Rs1.16 in the quarter ending on September 30th 2013 compared with per share earnings of Rs0.67 in the previous year. The board of directors did not issue a dividend.

After-tax profit for the first nine months of the current calendar year for the company stood at Rs5.8 billion or per share earnings of Rs2.76, compared with after-tax profit of Rs4.01 billion or per share earnings of Rs1.85 in the previous year, up 49% year on year (YoY).

The revenues of the company increased by 50% YoY to Rs8.5 billion for 3QCY13 led by an unexpected 1.5 times YoY, 18%YoY and 56%YoY increase in urea, Nitrophos (NP) and  Calcium Ammonium Nitrate (CAN) volumes, respectively.

While the gross margin expansion of 5.7 percentage points (ppt) YoY to 65%, likely due to higher NP margins during the quarter where Phosphate Rock (Phosrock) prices came down by 22%YoY in 3QCY13, financial charges of the company also declined by 26%YoY to Rs1.02 billion.

An expected uptick in fertiliser off-take is expected to drive earnings further, while a potential revision in gas tariffs and planned investment in the US should prove to be key triggers.

Published in The Express Tribune, October 29^th, 2013.

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