In the first quarter of 2023, Fauji Fertiliser Bin Qasim Limited (FFBL) reported an exchange loss of Rs 4.6 billion, and in the second quarter, it reported a loss of Rs 65 million. Despite facing challenges in its business, the company managed to achieve a gross profit of Rs 4.5 billion in the second quarter. On a consolidated basis, FFBL reported a gross profit of Rs 7.9 billion, with an operating profit of Rs 5.3 billion and a profit after tax of Rs 1.4 billion for the period ending June 30, 2023.
The company’s improved performance was attributed to the impressive growth of its subsidiary, Fauji Foods Limited, which achieved a profit after tax for the first time since its acquisition in 2015. However, FFBL faced difficulties due to importing its primary raw material, Phosphoric Acid, which increased costs and resulted in lower earnings in the second quarter of 2023 compared to the previous year.
Despite a 1.02% year-on-year growth in its top line, reaching Rs 81.23 billion, the cost of sales increased by 8.98% year-on-year, affecting the gross profit, which declined by 26.89% year-on-year to Rs 13.06 billion in the first half of 2023. Additionally, the company’s finance costs surged by 2.27 times year-on-year, reaching Rs 7.12 billion, mainly due to higher interest rates and a carryover of higher DAP (Di-Ammonium Phosphate) inventory.
