FATIMA_High taxation erodes bottom line (AKD Off the Analyst's Desk Aug 28, 2023)
AKD, Off the Analyst's Desk
FATIMA: High taxation erodes bottom line
FATIMA just announced its 2QCY23 results, posting a PAT of PkR1.2bn (EPS: PkR0.59/sh) vs. PAT of PkR0.2bn (EPS: PkR0.07/sh) in the SPLY. On a QoQ basis, the company posted a 71.4% drop in earnings, due to the impact of high taxation mainly on account of super tax. Total 1HCY23 EPS came in at PkR2.65/sh vs. PkR0.15/sh earned during 1HCY22. Further, the company has announced an interim dividend of PkR1.75/sh.
- Revenues rose by 39.6%QoQ to PkR46.8bn vs PkR33.5bn in 1QCY23 and by 41.0%YoY against 2QCY22. Revenues increased primarily on account of higher fertilizer prices, especially urea and urea offtakes from Fatimafert, in our opinion.
- Gross margins dropped to 30.5% against 42.2% last quarter and 48.4% in the SPLY. We opine PP12 and RLNG dollar linked prices to have inflated COGS mainly due to rampant PkR devaluation.
- Finance cost rose significantly by 51.4%/99.7% QoQ/YoY owing to high interest rates and heavy exchange losses possibly. Expenses and charges remained lower compared to last quarter and SPLY.
- Effective taxation came in at a staggering 85.7%, eroding the bottom line almost completely due to the impact of super tax. We expect this to burden the bottom line for the remaining half of the year.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.