FFC gross margins reached to record high

Aftab Ahmed

Islamabad: Fauji Fertilizer Company Limited (FFC) has reported a net profit of Rs. 4.26 billion translating into earnings per share of Rs 3.35 for the first quarter ended March 31, 2020.

The Company’s profit increased significantly in this quarter due to the PTI government’s decision to reduce GIDC in order to provide benefit to the farmers.

The FFC announced its financial results for the 1st quarter ended March 31, 2020, in its Board of Directors meeting held on April 27, 2020.

https://newztodays.com/ffc-reduces-urea-price-further-by-rs-23-per-bag/

The Company reported a net profit of Rs. 4.26 billion translating into earnings per share of Rs 3.35 for the period. The company achieved first-quarter record urea production of 649 thousand tonnes whereas urea off-take was recorded at 586 thousand tonnes. Aggregate all fertilizer revenue stood at Rs 20.67 billion for the period. The Board of Directors has also announced the First interim dividend of Rs 2.50 per share.

It is worth mentioning to note that FFC gross margins increased to 36% in this quarter highest in the last 5 years. The company was able to record high margins due to the government’s decision to reduce GIDC by Rupee 400 per bag. However, by looking at an increase in FFC profitability it can be understood that the company has not completely transferred benefits to the farmers.

Furthermore, the company has sold UREA at Rs1,960 per bag in December 2019 due to a large pile-up of inventory. If we compare the current market price of Rs1,650 per bag to December prices it looks that company has reduced its UREA price only by Rs300 per bag not by Rs400 per bag as committed to the Government.