Fauji Fertilizer Company Limited (FFC) has showcased robust financial performance in the first quarter of 2024, marked by a significant surge in profitability. The company reported a remarkable 36.1% Year-over-Year (YoY) increase in profit after tax, amounting to Rs10.52 billion, with an earnings per share (EPS) of Rs8.27. This substantial growth in profitability can be attributed to several key factors.
Firstly, FFC’s manufacturing facilities operated at above-capacity levels, resulting in an increased production of Sona Urea by 3% compared to the same period last year. This enhanced production capacity allowed the company to meet the rising demand for fertilizers in the agricultural sector.
Secondly, the company experienced a notable uptick in sales volume, with Sona Urea sales reaching 661,000 tonnes, a 5% increase over the previous year. Additionally, FFC marketed an additional 94,000 tonnes of urea imported by the government to ensure a steady supply to farmers. Consequently, the company’s aggregate urea sales amounted to 755,000 tonnes, representing a substantial growth compared to the corresponding period last year.
Furthermore, FFC benefited from an escalation in selling prices driven by significantly higher gas prices towards the end of the previous year. This increase in selling prices, coupled with the surge in sales volume, led to a substantial rise in sales revenue, which reached Rs58.4 billion compared to Rs36.41 billion in the same period last year.
In conjunction with the positive financial results, the company declared an interim cash dividend of Rs5.5 per share, underscoring its commitment to delivering value to shareholders. Despite profitability in dollar terms remaining stagnant at $38 million, FFC’s strong performance in the local market indicates resilience and effective management amidst challenging economic conditions.
