Fauji Fertilizer Bin Qasim (FFBL) on Wednesday announced that it earned after-tax profit of Rs802 million in the first half of calendar year 2014 (1HCY14), down 56% compared to Rs1.82 billion in the same period of previous year.
Earnings per share remained at Rs0.86 against Rs1.95 in the corresponding period of previous year.
“The result was lower than our estimates mainly due to lower-than-expected other income,” a Global Research report said.
Along with the result, the company’s board of directors announced an interim cash dividend of Rs1 per share.
The earnings dropped in the wake of higher gas curtailment, leading to a decline in production and sales of fertiliser, both urea and diammonium phosphate (DAP). The company’s inability to pass on the impact of rising cost on account of increase in gas cess from January this year and depressed primary margins on DAP sales also played their part, the report added.
Revenues declined 22% year-on-year to Rs15.75 billion in 1HCY14 largely due to 13% and 17% year-on-year fall in urea and DAP offtake respectively.
Urea sales fell to 102,000 tons during 1HCY14 compared to 117,000 tons in 1HCY13. DAP offtake was recorded at 213,000 tons against 256,000 tons last year.
The weak sales were mainly due to higher gas curtailment at the plant averaging 56% (versus 47% in 1HCY13). On quarter-on-quarter basis, revenues dropped to Rs9.71 billion.
Finance cost remained on the lower side and fell 36% year-on-year to Rs397 million during 1HCY14. This sharp decline was due to foreign exchange gains of Rs160 million booked on the company’s dollar-denominated payables on account of rupee’s rise against the dollar by 7% during the period.
“Other income stood at Rs230 million, which was lower than our estimate of Rs435 million mainly due to the loss posted by the company’s joint venture Pakistan Maroc Phosphore (PMP),” the report said.
However, total losses booked by the company from joint ventures and associates declined 15% year-on-year to Rs105 million in 1HCY14 against Rs120 million in the same period last year.
Published in The Express Tribune, July 24th, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.