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FFBL posts Rs1.642 billion losses in six months

By Our Correspondent
August 01, 2018

KARACHI: Fauji Fertilizer Bin Qasim Limited (FFBL) recorded Rs1.642 billion in losses for the half year ended June 30, translating into loss per share (LPS) of Rs1.25, a bourse filing said on Tuesday.

FFBL registered loss of Rs1.205 billion with LPS of Re0.53 during the corresponding period a year earlier, a statement to Pakistan Stock Exchange said.

The fertiliser maker didn’t announce any cash dividend for the period. The company’s revenue increased to Rs27.115 billion in the January-June period compared to Rs19.208 billion in the corresponding period a year earlier.

Cost of sales rose to Rs22.571 billion from Rs18.109 billion.

Analyst Shankar Talreja at Topline Securities said FFBL reported LPS of Re0.99 for the second quarter of 2018 as against Re0.1 a year earlier.

Talreja said the company reported increase in losses amid increase in finance cost and other expenses by 33 percent and 10.6x year-on-year, respectively, “with former due to increase in both debt borrowings and interest rates and latter due to exchange losses”.

FFBL’s net sales increased 37 percent YoY to Rs13 billion during 2Q2018, mainly due to increase in fertiliser revenue by 14 percent. Revenue increased due to increase in urea and diammonium phosphate (DAP) prices by around 10 percent and 20 percent, respectively. Substantial decline was witnessed in other income to Rs369 million in 2Q2018 from Rs1.2 billion in the corresponding period of last year, as cash subsidy on DAP was discontinued in FY2018, while on urea the company recorded subsidy income for only half of the quarter (till May 7).

Talreja said key risks for the company include change in regulatory structure in milk segment, increase in coal and gas prices and barrier to entry in export countries for meat segment.

Fauji Fertilizer’s H1 profit surges 28 percent

Fauji Fertilizer Company Limited’s (FFC) profit surged 28 percent in the first half ended June 30 on higher sales and reduction in financing cost.

FFC’s profit amounted to Rs4.590 billion with earnings per share (EPS) of Rs3.61 in January-June as against Rs3.583 billion with EPS of Rs2.82 in the corresponding period a year earlier.

The company declared an interim dividend of Rs1.40/share or 14 percent. The dividend is in addition to Rs1.70 already paid.

A brokerage house said drop in financing cost and higher sales helped the company to post a decent gain in profit numbers.

Financing cost dropped 35 percent to Rs1.060 billion during the first half, while sales accelerated to Rs45 billion from Rs31.6 billion.

“Worry some issue for the company was the continuous rise in the administrative expenses and distribution cost and other expenses during the period up by nearly 7 percent and 25 percent, respectively,” the brokerage said. “The amounts during January to June 2018 totaled at Rs4.6 billion and Rs837 million, respectively.”

Lucky Cement’s annual profit falls to Rs16.173bln

Lucky Cement’s profit fell seven percent to Rs16.173 billion for the year ended June 30, translating into EPS of Rs45.83.

The cement marker recorded profit of Rs17.390 billion with EPS of Rs50.18. The company announced the final cash dividend of 80 percent.

Lucky Cement’s consolidated sales increased to Rs124.681 billion in the financial year compared to Rs109.800 billion in the previous financial year. Cost of sales surged to Rs71.943 billion compared to Rs58.445 billion.

The company achieved an overall growth of 9.3 percent with total sales volume of 7.82 million tons during the FY2018 as compared to 7.15 million tons sold a year ago, a company’s document said. Local cement sales volume registered a growth of 14.8 percent to reach 6.63 million tons as compared to 5.77 million tons last year, whereas local clinker sales declined 80.1 percent to 0.06 million tons during the year under review as compared to 0.30 million tons last year.

Topline Securities said the company achieved financial close of its 660 megawatts of coal-based power plant on 25 June, with the necessary guarantee from the government under the implementation agreement. The company expected the plant to start commercial operations from March 2021.

“We flag price weakening, higher than anticipated decline in exports, unanticipated increase in gas and coal prices, delay in installation of 660MW coal power plant and delay in commencement of LUCK’s upcoming North capacity as key risk for the company,” the brokerage said in a flash note.

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