FFBL’s full-year profit down 15pc

KARACHI: Fauji Fertilizer Bin Qasim Limited (FFBL) on Wednesday said its profit for the year ended December 31, 2018 declined 15 percent to Rs778 million, which analysts primarily pinned on an elusive urea subsidy.

It translates into earnings per share (EPS) of Rs1.68, a bourse filing showed.

The FFBL had posted a profit of Rs925 million with an EPS of Rs2.03 in the corresponding period a year earlier.

The fertiliser-maker also announced an interim cash dividend for the year ended December 31, 2018 at Rs1/share, which is 10 percent.

The company said its finance cost increased 34 percent to Rs5.21 billion compared to Rs3.88 billion a year earlier, while sales followed the suit, growing 20 percent to Rs77.555 billion compared to Rs64.388 billion a year earlier.

Analyst Tahir Abbas from Arif Habib Limited said the FFBL profit decreased mainly due to absence of urea subsidy tagged with higher urea and DAP fertiliser prices.

“December 2019 target price for the FFBL is set at Rs43.45/share, we recommend HOLD,” Abbas said.

Shanker Talreja from Topline Securities said “Change in regulatory structure in Milk segment, increase in coal and gas prices beyond our assumptions (the primary raw material), barriers on entering in export countries for meat segment, and unfavorable GIDC decision, are key risks”.