January 26, 2024 (MLN): Fauji Fertilizer Company Limited (PSX: FFC) unveiled its profitability for the year ended December 31, 2023, wherein the profit after tax clocked in at Rs47.45 billion [EPS: Rs37.3] compared to profit of Rs34.37bn [EPS: Rs27.02] reported in the same period last year (SPLY), reflecting a significant 38.06% YoY growth.
In addition to the financial results, the Board of Directors (BoD) of the company has declared an interim cash dividend of Rs4.1 per share.
This is in addition to Interim Dividends already paid at Rs11.39 per share i.e.113.9%.
Going by the results, the company's top line rose by 44.32% YoY to Rs181.38bn as compared to Rs125.68bn in SPLY.
Similarly, the cost to sell also witnessed an increase of 37.58% YoY to Rs104.55bn. As the increase in sales was greater than proportionate to the rise in cost to sell, the gross profit improved by 54.63% YoY to Rs76.84bn in 2023.
On the expense section, the company observed an increase in Administrative expenses by 22.97% YoY and other expenses by 78.72% YoY to clock in at Rs13.81bn and Rs5.44bn respectively during the review period.
The financial results further showcase that the Share of profit of associates and joint ventures went down by 9.67% YoY to Rs11.24bn in 2023.
On the other hand, FFC's other incomes surged by 42.27% YoY to Rs16.36bn in 2023, compared to Rs11.5bn in 2022.
The company’s finance costs expanded by 11.15% YoY and stood at Rs6.59bn as compared to Rs3.05bn in 2022, mainly due to higher interest rates.
On the tax front, the company paid a higher tax worth Rs27.07bn against the Rs16.26bn paid in the corresponding period of last year, depicting a rise of 66.48% YoY.
The year 2023 faced high inflation and interest rates while the Pak Rupee also continued its downward trajectory against the US dollar, resulting in higher operating and financing costs for the company.
The retrospective increase in the Super Tax levy led to a higher effective tax rate of 45% compared to 40% last year, further pressurizing company profitability.
Gas prices for the fertilizer sector also increased significantly by 75%, however, the company only passed on a partial impact in urea price during 2023, to offer urea at the most economical rates to the farmers.
Urea selling prices exhibited significant variations within the fertilizer industry, with FFC offering urea at lower selling prices by around Rs200-500 per bag during most parts of the year.
Sona urea prices towards the close of 2023 stood at around. Rs3,400 per bag in contrast to international prices hovering around Rs6,200 per bag.
Despite these challenges, FFC ensured fertilizer supply across the country through its nationwide network of warehouses and dealers, and also to avoid unscrupulous practices by some elements through equitable fertilizer distribution and real-time monitoring of fertilizer shipments and dealer stock.
Dealerships were sensitized to market fertilizers at FFC-suggested rates, while the farmers were also made aware to purchase products through registered dealers at prescribed rates.
To further ease urea availability and pricing issues for the farmers, the company along with the Industry has coordinated a plan with the government to import urea and distribute it in 2024.
Urea production stood at an outstanding 2,521 thousand tonnes, 5% higher than last year while maintaining high-reliability factors and optimum standards of Health, Safety and Environment.
The profitability for 2023 barely covers the Company's requirement to, build up reserves for the capital-intensive and foreign exchange-denominated nodal compression project in addition to essential maintenance of plants at a world-class level.
The company is about to kick off phase II of the critical Nodal Compression Project with a capital outlay of over USD 100 million.
FFC also continued its significant contribution towards the national exchequer through taxes and levies of Rs36bn compared to Rs30bn last year.
The company also enabled savings of around $1bn foreign exchange to the country via import substitution during 2023 with aggregate savings of around $4.8bn during the last five years.
| Consolidated Financial Results for year ended Dec 31, 2023 (Rupees in '000) | |||
|---|---|---|---|
| Dec 23 | Dec 22 | % Change | |
| Sales | 181,382,237 | 125,678,385 | 44.32% |
| Cost of sales | (104,545,753) | (75,989,405) | 37.58% |
| Gross Profit | 76,836,484 | 49,688,980 | 54.63% |
| Administrative and distribution expenses | (13,812,200) | (11,232,215) | 22.97% |
| Other losses | (4,060,336) | (2,788,513) | 45.61% |
| Share of profit of associates and joint venture | 11,236,942 | 12,440,254 | -9.67% |
| Other Income | 16,357,989 | 11,498,166 | 42.27% |
| Other expenses | (5,444,696) | (3,046,517) | 78.72% |
| Finance cost | (6,587,191) | (5,926,201) | 11.15% |
| Profit before taxation | 74,526,992 | 50,633,954 | 47.19% |
| Taxation | (27,074,722) | (16,263,067) | 66.48% |
| Net profit for the period | 47,452,270 | 34,370,887 | 38.06% |
| Basic and diluted earnings/ (loss) per share | 37.30 | 27.02 | – |
Copyright Mettis Link News
Posted on:2024-01-26T12:54:31+05:00
42928
