Corporate results: Fauji Fertilizer’s income declines 7% YoY

Company announces EPS of Rs3.58, fall attributed to higher costs.


Our Correspondent April 29, 2014
The company’s board also announced an interim cash dividend of Rs3 per share, lower than our estimate of Rs3.75 per share, Global Research reported on Tuesday. CREATIVE COMMONS

KARACHI: Fauji Fertilizer Company (FFC) has announced a net income of Rs4.56 billion or earnings per share (EPS) of Rs3.58 for the quarter ended March 31 of calendar year 2014 (CY14), down 7% year-on-year (YoY) compared to Rs4.91 billion or EPS of Rs3.86 during the same period last year.

The decline in earnings can be attributed to higher costs of manufacturing urea on the back of increase in Gas Infrastructure Development Cess (GIDC) that resulted in margin compression during the period.

The company’s board also announced an interim cash dividend of Rs3 per share, lower than our estimate of Rs3.75 per share, Global Research reported on Tuesday.

On a sequential quarter-on-quarter (QoQ) basis, the company’s earnings dipped 13% primarily due to a 5% decline in urea sales QoQ.

During the first quarter of CY14 (1QCY14), company’s revenues registered a growth of 7% YoY to Rs17.57 billion because of an increase in urea prices by 7% YoY.

However, the company’s urea offtake for the period remained flat at 573 kilo metric ton against 569 sold during the same period last year. On a quarterly basis, revenues posted a decline of 20% QoQ because of a 5% decline in urea offtake and absence of sales of imported Diammonium phosphate (DAP) during the period.

The gross margins of the company registered at 43% during 1Q CY14, down by 4% points (pps) YoY because of limited pass through of the GIDC hike. On a quarterly basis, margins remained flat at 43%.

For 1QCY14, the company reported other operating income of Rs1.54 billion, up 2% YoY (60% QoQ). The improvement in other income was due to the account of dividends received by the company from its subsidiaries.

Fatima Fertilizer’s results

Fatima Fertilizer – part of Arif Habib Corporation – has posted a net profit of Rs1.63 billion or EPS of Rs0.78 for the 1QCY14 ended March 31 compared to a profit of Rs1.68 billion or EPS of Rs0.80 in 1QCY13, down by 3% year-on-year (YoY).

Published in The Express Tribune, April 30th, 2014.

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