KARACHI: Fauji Fertilizer Bin Qasim Ltd, the country's second-largest fertilizer producer, reported its highest ever quarterly profit on Tuesday, driven by a surge in diammonium phosphate (DAP) sales and other income.
The company posted a net profit of Rs5.3 billion, or Rs4.11 per share, for the third quarter ended Sept. 30, compared with a net loss of Rs1.7 billion rupees, or Rs1.31 per share, a year earlier.
The result is above market expectations mainly due to higher than expected other income and lower selling and distribution expense. Net sales jumped 210 percent year-on-year to Rs70 billion, as DAP offtake soared five-fold to 344,000 tonnes, offsetting a 31 percent drop in urea sales to 73,000 tonnes.
The company also benefited from higher retention prices for both products. Gross margins narrowed slightly to 14.8 percent from 16.7 percent a year ago, due to higher raw material costs and lower urea margins.
Selling and distribution expenses rose 131 percent to Rs2.6 billion, mainly due to higher freight charges and commission on DAP sales.
Other income increased 196 percent to Rs2.8 billion rupees, boosted by higher interest income, income from mutual funds and a gain of Rs268 million from the sale of its entire stake in Fauji Meat Ltd.
Finance cost rose 98 percent to Rs2.3 billion, due to higher borrowings and interest rates. The company recorded a tax expense of Rs5.3 billion, equivalent to an effective tax rate of 26.1 percent, compared with a tax reversal of Rs1.7 billion a year ago.
For the nine-month period, the company reported a net profit of Rs354 million, or Rs0.27 per share, down 79 percent from the same period last year.
Philip Morris Pakistan profit dives as illicit trade surges Philip Morris (Pakistan) Ltd., the local unit of the world's largest cigarette maker, reported a sharp drop in profit for the nine months through September as economic challenges and illicit trade eroded its market share.
The company's net income fell to Rs659 million from Rs2.15 billion rupees a year earlier, according to a statement on Tuesday. Its revenue declined by 8.9 percent to Rs13.64 billion, mainly due to a 24.1 percent slump in domestic sales to Rs10.58 billion.
The company blamed the dismal performance on a steep decline in legal cigarette volumes, which plunged by 44 percent in the four months following a 150 percent increase in excise duty in February. The tax hike, which came on top of a 50 percent increase in July last year, pushed up the prices of legal cigarettes and drove consumers to cheaper and untaxed alternatives.
The company said that the prescribed minimum price for tax collection is Rs127.4 per pack, but non-tax-paid cigarettes are reportedly being sold at an average price of Rs100 per pack, creating a price gap of around 200 percent compared to most legal brands.
The company estimated that the annual loss to the national exchequer due to the non-tax-paid sector could exceed Rs240 billion if no effective measures are taken.
The company also called for the full implementation and monitoring of the Track & Trace System for the tobacco industry, which was introduced on July 1, 2022, to combat counterfeiting and smuggling of illicit cigarettes.
"While the winds of economic change have posed new challenges for the tax-compliant tobacco industry, Philip Morris Pakistan remains steadfast in its commitment to adapt and navigate this evolving landscape. We continue to monitor market dynamics diligently, ensuring our operations remain resilient in these trying times," said Roman Yazbeck, Managing Director of Philip Morris Pakistan.
Lucky Core Industries reports 31pc rise in Q3 profit
Lucky Core Industries Limited (LCI), a leading Pakistan-based manufacturing and trading company, announced a 31 percent increase in its consolidated profit after tax for the quarter ended September 30, 2023.
The company, which operates in diverse businesses such as polyester, soda ash, chemicals, agri sciences, pharmaceuticals and animal health, posted a consolidated profit after tax of Rs2.54 billion, up from Rs1.94 billion in the same period last year.
Earnings per share rose 41 percent to Rs27.48 rupees, compared with Rs19.49 a year ago.
Net turnover from continuing operations increased 19 percent to Rs28.99 billion, while operating result from continuing operations grew 32 percent to Rs4.13 billion .
The company attributed the improved performance to higher operating results, exchange gain, and dividend income of Rs646 million derived from short-term investments.
However, the company also faced challenges from the current global and domestic landscape, such as inflationary pressures, volatile exchange rates, high tax incidence, high interest rates, and uncertain demand outlook.
"The prolonged monetary tightening measures have negatively impacted the consumers' purchasing power resulting in a significant demand compression across all segments of the economy," LCI's Chief Executive Asif Jooma said in a statement.
"LCI continues to maintain a focus on its mission of improving lives and contributing positively to benefit stakeholders during this difficult period."
