FFC – earnings depict consistency amidst the pandemic

  • Fauji Fertilizers Company (FFC) announced its financial results earlier today, posting earnings of PKR 4,874mn (EPS: PKR 3.83) during 2QCY20 compared to PKR 5,209mn (EPS: PKR 4.09) recorded during 2QCY19, a fall of 6% YoY. On a cumulative basis, FFC’s earnings rose by 3% YoY to PKR 9,136mn (EPS: PKR 7.18) during 1HCY20. Along with the result, the company announced an interim cash dividend of PKR 2.75/sh, taking cumulative payout to PKR 5.25/sh during 1HCY20.
  • FFC’s revenues grew by 12% QoQ to PKR 23,156mn during 2QCY20 likely due higher urea off-take, which grew by ~16% QoQ to 0.69kT.
  • The company’s margins inched by 2pps to 34% during 1HCY20 likely due to higher urea prices. On a sequential basis, however, margins dipped by 4pps to 32% likely due to reduction in urea prices and a higher cost of inventory.
  • Financial charges declined by 31% YoY to PKR 462mn likely due to lower effective interest rates and a likely reduction in outstanding debt balance.
  • Other income for the company rose by 16% QoQ to PKR 2,287mn largely on account of dividend and treasury income from its investments.
  • Onwards, we expect the company’s urea sales to benefit from the agricultural package and in turn, enhance its profitability and payouts for the remainder of CY20.

Regards,
KASB Research

Share on facebook
Share on twitter
Share on linkedin

You may also like

Leave a comment

Your email address will not be published. Required fields are marked *

Categories

Recent Blogs

Archive

Follow Us