Fauji fertilizer twins, Fauji Fertilizer Bin Qasim Limited (FFBL) and Fauji Fertilizer Company Limited (FFC) have released their half yearly financial results for the period ended 30th June 2015. Both the companies have different stories to tell.
FFBL announced profit after tax of Rs1.29 billion (EPS: Rs1.39) for 1HCY15, up 62%YoY when compared with net profit of Rs802 million (EPS: Rs0.86) posted for the corresponding period last year.
On a sequential basis, in 2QCY15, the net profit of Rs1.18 billion (EPS: Rs1.26) was higher than net profit of Rs98 million (EPS: Rs0.11) for 1QCY14 mainly due to first quarter being off season for FFBL’s flagship product, DAP.
Key highlights of the result include: 1) a 13%YoY volumetric increase in sales helped improve topline by 14% for 1HCY15 to Rs17.9 billion, 2) financial increased by 112%YoY as the Company entered into different ventures, 3) increase in other income as share of profit from associates increased and 4) decrease in effective tax rate in 1HCY15 to 21%.
FFC posted net profit of Rs8.26 billion (EPS: Rs6.50) for 1HCY15, flattish on yearly basis as compared to net profit of Rs8.16 billion (EPS: Rs6.41) posted for the same period last year. Announcement of interim dividend per share of Rs1.75 at the end of 2QCY15 takes 1HCY15 payout to Rs5.69 (payout ratio: 88%).
On a sequential basis, the 2QCY15 net profit of Rs2.35 billion (EPS: Rs1.85) compares unfavorably against net profit of Rs5.9 billion (EPS: Rs4.64) the Company posted in 1QCY15 down 60%QoQ mainly due to weaker sales and decrease in other income.
Key highlights of the result included: 1) decrease in gross margins to 34% for 2QCY15 as compared to 41% for 1QCY15 due to 8%QoQ decline in topline (urea offtake declined by 5% to 593,000 tons in second quarter from 625,000 tons in first quarter, 2) decline in other income was due to absence of dividend income investment in Askari Bank and 3) there was a 20%QoQ increase in effective tax rate to 49% in 2QCY15 due to imposition of super tax.