Fauji Fertilizer’s quarterly profit down 13.7pc

Net income of Fauji Fertilizer Company (FFC) fell 13.7 percent year-on-year to Rs3.22 billion for the quarter ended September 30, translating into earnings per share (EPS) of Rs2.53, a bourse filing said on Friday. 

FFC’s profit amounted to Rs3.736 billion with EPS of Rs2.94 in the corresponding period a year earlier, a notice to Pakistan Stock Exchange said.

The fertiliser maker announced an interim dividend of Rs1.5/share, which is in addition to Rs2.5/share already paid to the shareholders. Fauji Fertilizer’s sales revenue surged 54.5 percent year-on-year to Rs28.75 billion for the July-September over the same period a year ago. But, cost of sales sharply decreased to Rs22.797 billion during the quarter as compared to Rs13.893 billion a year earlier.  

“The growth in sales revenue was mainly due to higher diammonium phosphate off-take on the back of replacement of cash subsidy with reduced general sales tax fixed at Rs100/bag,” Momena Mumtaz, an analyst at Taurus Securities Limited said. “Urea sales, however, remain depressed for September due to reduction in cash subsidy from Rs156/bag.”

Analyst Adnan Sami at Topline Securities said subsidy cut also caused a 44 percent year-on-year decline in other income to Rs1.4 billion during the quarter under review.  “Key risks include decline in international urea prices, slower than expected urea sales, and weaker than expected local urea prices,” Sami added.  Finance cost, however, went up eight percent year-on-year to Rs908 million in July-September.  FFC’s profit slid seven percent to Rs6.8 billion for the nine-month period ended September 30, translating into EPS of Rs5.35.