By Jawad Ahmed ISLAMABAD, May 26 (INP-WealthPK): Profit of Fauji Fertilizer Company Limited (FFC), the largest urea manufacturing firm in Pakistan, has been gradually increasing since 2017, reaching a whopping Rs35.693 billion in 2021. As a public-listed company in Pakistan, FFC was founded under the Companies Act, 1913, (now the Companies Act, 2017). The company's core operations include manufacturing, procuring and marketing fertilizers and chemicals, as well as investments in the fertilizer, chemical, cement, energy generation, food processing and banking industries. Its subsidiary companies are FFC Energy Limited, Foundation Wind Energy Limited, OLIVE Technical Services (Private) Limited and Fauji Fresh n Freeze Limited. Its associated companies are Fauji Fertilizer Bin Qasim Limited, Fauji Cement Company Limited, Askari Bank Limited, Pak Maroc Phosphore SA, Morocco and Thar Energy Limited. Shareholding pattern [caption id="attachment_67476" align="aligncenter" width="696"] Source: Company financial Report[/caption] As of December 31, 2021, associated corporations, undertakings and related parties owned 44.35% of total shares. The general public owned around 24% of the shares, while public sector enterprises and corporations owned 11.57%. Around 7% of the shares are held by banks, development finance institutions (DFIs) and non-bank financial institutions (NBFIs). About 4.32% of the shares are purchased by foreign companies. "Others" own 4.68% of the stock, with the rest of the shareholder categories owning roughly 4%. Company Turnover Except for the calendar year (CY) 2020, FFC's top-line has been steadily increasing, with a notable increase in profit since 2017. [caption id="attachment_67475" align="aligncenter" width="696"] Source: FFC Annual Report/ WealthPK Research[/caption] In CY2017, after a 4% decline in profit, the industry regained pricing power, and despite fewer volumetric sales, FFC was able to boost its top-line through higher selling prices. The profit ratio improved to 43% in 2018. The corporation had its greatest top-line in the year with Rs109 billion in revenue. The FFC made a profit of Rs17.334 billion in CY2019, bringing its total income to over Rs109.8 billion. The entire earnings for CY2019 increased by 5% over the previous year. In CY2020, the group's total revenues were Rs102,744 billion, down 6% from the previous fiscal year. However, the group's profit for the year was Rs29.75 billion, up 72% from Rs17.33 billion in the previous year. [caption id="attachment_67474" align="aligncenter" width="696"] Source: FFC Annual Report/ WealthPK Research[/caption] The group's benchmark turnover in CY2021 was Rs114.35 billion, up 11% from the previous year, owing to increased imported fertilizer prices. Profit for the year of the group thus reached Rs35.69 billion, improving by 20% compared to Rs29.75 billion in CY2020. Quarterly Results and Future Outlook The FFC declared a net profit of Rs6.24 billion at the conclusion of the first quarter of CY2022. Earnings after tax climbed by 7% year-on-year, up from Rs5.82 billion in the same period of last year. The FFC also declared a first-quarter dividend of Rs3.70 per share, which was more than market estimates. The company's revenues increased by 22% year-over-year, from Rs21.588 billion to Rs26.315 billion at the end of 1QCY2022. The rise in income is driven by a 13% increase in the price of urea and a 96% increase in the price of DAP. On a quarter-over-quarter (QoQ) basis, net sales fell by 25%. [caption id="attachment_67473" align="aligncenter" width="696"] Source: FFC Annual Report/ WealthPK Research[/caption] Gross earnings increased by 11% to Rs9.36 billion, compared to Rs8.43 billion the previous year. Other income climbed by 27% to Rs3.46 billion from Rs2.72 billion, owing to higher receipts from cash and currency equivalents. At the end of 1QCY2022, the company's financial costs had risen by 155% year-on-year, from Rs419 million to slightly over Rs1 billion. Higher interest rates and a spike in short-term borrowings caused the cost hike. During the quarter, the company's earnings per share were Rs4.90, up from Rs4.57 in the previous year's quarter.