Ayesha Mudassar

Fauji Fertilizer Bin Qasim Limited (FFBL) witnessed a decline of 4.4% and 79.3% in gross and net profits, respectively, in the nine months (January-September) of 2023 as compared to the corresponding period of 2022, WealthPk reports. A combination of strict monetary measures, discriminatory tax policies, and the prevailing economic challenges, including high inflation and currency devaluation, collectively dented the company’s profitability in the nine months of 2023. Quoting its third quarter report, FFBL posted a gross profit of Rs17.1 billion and a net profit of Rs 354 million in 9MCY23. Therefore, the firm came up with gross profit and net profit ratios of 12.5% and 0.3%, respectively.

The company posted an earnings per share (EPS) of Rs0.27 in 9MCY23.

The sales stood at Rs136.8 billion in 9MCY23 as compared to Rs93.5 billion in 9MCY22. The firm posted gross profit and net profit ratios of 19.2% and 1.8%, respectively, in 9MCY22. The company reported an EPS of Rs1.33 billion in 9MCY22.

Quarterly Review

FFBL-1QCY23 vs 1QCY22

In the first quarter (January-March) of 2023, the sales increased 27% compared to the corresponding period of CY22. However, the company bore a net loss during the quarter. A gross profit of Rs2.2 billion and a net loss of Rs5.4 billion was reported in the first quarter of 2023. The company came up with gross profit and net loss ratios of 7% and 17.2% respectively.

The company also posted a loss per share of Rs4.20 in the 1QCY23.

The company reported sales of Rs24.7 billion in 1QCY22 and posted gross and net profit ratios of 21.7% and 6.6% over the first quarter of 2022. An EPS of Rs1.26 was reported in 1QCY22.

FFBL-2QCY23 vs 2QCY22

In comparison with 1QCY23, the company’s financial performance improved in the second quarter. A gross profit of Rs4.5 billion and a net profit of Rs479 million on sales of Rs35 billion was reported in the second quarter of CY2023. The company came up with gross profit and net profit ratios of 13% and 1.4%, respectively.

The firm posted earnings per share of Rs0.37 in 2QCY23.

In comparison with 2QCY22, the company’s sales dropped 24% in 2QCY23. Furthermore, the gross and net profits fell by 48% and 73% in 2QCY23.

FFBL-3QCY22 VS 3QCY23

During the three months, the company achieved a revenue of Rs70 billion as compared to Rs22.5 billion in 3QCY22, representing an increase of 210%. The gross profit, operating profit, and profit before tax also increased significantly by 176%, 210%, and 413%, respectively, as compared with 3QCY22. Moreover, the company has posted a profit-after-tax of Rs5.3 billion for Q3 as compared to the loss after tax of PKR 1.7 billion in 3QCY22.

Outlook

FFBL anticipates significant challenges arising from inconsistent gas supplies and currency fluctuations. However, the company is determined to overcome challenges with continued trust, confidence, and support of all of the stakeholders.

Credit: INP-WealthPk