FFBL - 1QCY23 Result Review,(AKD Off the Analyst's Desk Apr 26, 2023)
Fauji Fertilizer Bin Qasim Limited (FFBL) has announced its 1QFY23 result today, where the company posted an unconsolidated LAT of PkR5.4bn (LPS: PkR4.2), compared to EPS of PkR1.3 in SPLY and PkR0.5 in the previous quarter. The result is well below industry expectations owing to substantial exchange losses recorded against foreign Trade Payables.
- Revenue for the quarter has increased by 27%YoY on the back of higher product prices, while declining by a whopping 52%QoQ, as offtakes have nearly halved compared to 4QCY22.
- Gross profit for the company has declined significantly on the back of higher inventory costs of Phosphoric acid along with lower offtakes leading to poor fixed-cost absorption. Margins for the quarter have clocked in at 7.1%, compared to 12.1% in 4QCY22 and 21.7% in SPLY.
- The company has recorded PkR4.6bn in exchange losses for the quarter, with hefty PkR depreciation causing a substantial revaluation in foreign Trade Payables. To recall, the company imports raw material for DAP manufacturing from its Joint Venture (PMP).
- Finance costs have increased by 6%QoQ to PkR2.4bn vs. PkR2.3bn in the previous quarter owing to higher interest rates. Furthermore, finance costs have increased by 1.5x on the yearly basis on the back of higher borrowings.
- On the flipside, Other Income has clocked in below expectations, recording at PkR898mn vs. PkR1.0bn in the previous quarter and PkR1.1bn in the SPLY.
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.
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