Corporate results: Fauji Fertilizer’s profit slips

January-March earnings decline 90% YoY.

KARACHI: Fauji Fertilizer Bin Qasim (FFBL) has announced earnings of Rs48 million or earnings per share (EPS) of Rs0.05, down 90% year on year (YoY) in the first quarter of the calendar year 2014 (1QCY14) compared to Rs492 million or earnings per share of Rs0.53 in the same period last year.

The results are slightly above the company’s expectation and market consensus estimates where the general view was that the company may announce a loss in the first quarter.

The YoY decline in the first quarter earnings is primarily attributable to lower urea (-37%YoY) and diammonium phosphate (-7%YoY) offtake, depressed fertiliser margin and loss from its associate company, Askari Commercial Bank Limited (AKBL) amounting to Rs330 million, JS Research reported on Tuesday.



Quarter on quarter (QoQ) basis, the earnings marked a 98% decline from Rs2.48 per share reported in the fourth quarter of the calendar year 2103 (4QCY13).

The reason behind this nosedive in profitability is seasonal gas curtailment during January 2014 and February 2014, leading to lower production and offtake, BMA Research commented.

FFBL emerged as a beneficiary from 7% Pakistan rupee appreciation against the dollar as the company’s finance cost (net of exchange loss) was restricted to a mere Rs42 million compared with Rs266 million recorded in 1QCY13, the report added.

In 2013, FFBL posted a profit after tax of Rs5.6 billion, up 30% compared to a profit of Rs4.3 billion in year 2012.

FFBL is a subsidiary of Fauji Fertilizer Company with a majority shareholding of 50.88%.

Published in The Express Tribune, April 23^rd, 2014.

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