Fauji Fertilizer posts higher first quarter profits

KARACHI: Fauji Fertiliser Bin Qasim Ltd (FFBL) announced its results for the first quarter of 2010 declaring 12 per cent increase in the revenue.

The main reason for this increase is the gradual increases in urea and DAP prices.

Net income in the three months ended March 31 surged to Rs808 million as compared to Rs13 million in the same period last year, the company said in a statement to the stock exchange on Friday.

The estimates of JS Global Capital for the earnings were mostly on target and the announcement by FFBL did not fruit any surprises. Alongside the result, Fauji Fertiliser Limited announced an interim dividend of Rs0.5 per share. The company’s decision to invest Rs5 billion in the power sector yielded results for the company.

The earnings per share for the period was Rs0.87 against Rs0.01 last year. Gross margins increased massively to 27 per cent in the first quarter of 2010, up from 14 per cent in the same period last year.

Other income of FFBL surged to Rs1.1 billion against Rs237 million losses in the same period last year.

Cost of sales has decreased to Rs4.7 million in the first quarter of 2010 against Rs5 million in the period last year. The stock price on Friday dropped Rs0.34 to Rs 32.47. The stock price has increased Rs15.22 in the last twelve months.

Local manufacturers have increased DAP prices by 20 per cent since the start of the year due to increasing international DAP prices. Furthermore, urea prices have increased by seven per cent to Rs780 per bag (ex-factory price) year to date.

Fauji Fertilizer Bin Qasim Ltd (FFBL) specialises in the production of granular urea and di-ammonium phosphate fertilizers which are used in the agriculture sector throughout the country. Founded in 1996, FFBL has experienced rapid growth.