FFBL: Core earnings broadly in line with estimates, (AKD, Off the Analyst's Desk, Jan 26, 2021)
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FFBL: Core earnings broadly in line with estimates |
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Fauji Fertilizer Bin Qasim Ltd (FFBL) announced 4QCY20 unconsolidated earnings of PkR3.09bn (EPS: PkR2.40), as opposed to NLAT of PkR3.50bn (LPS: PkR3.75) in the same period last year. The earnings included a one-off gain of PkR2.7bn, courtesy accounting adjustment with regards to adjustment in GIDC liability under IFRS-9. This was offset by PkR2.8bn additional impairment booked on Fauji Meat Ltd and Fauji Foods Ltd (c. PkR4.08bn for CY20). Apart from one-offs, the result was broadly in line with our expectation of PkR2.7bn – slight deviation due to higher than expected other income.
The turnaround in 4QCY20 earnings came on the back of (i) 59% YoY uptick in DAP volumes, along with uptrend in local DAP prices, (ii) 50/30% YoY decline in feed/ fuel gas prices, courtesy GIDC elimination, and (iv) 45% YoY decline in finance cost amid lower interest rates. On full year basis, GIDC elimination in Jan’20, 10/35% uptick urea/DAP offtake and higher prices of DAP pulled the bottomline in green.
FFBL has a 90/51% stake in Fauji Meat Ltd/Fauji Foods Ltd. While core operations have improved, with supply side shock posing to be beneficial for the only local producer of DAP, the loss making subsidiaries continue to remain a drag. |
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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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