FFBL - High offtakes and prices drive EPS higher!, (AKD Off the Analyst's Desk Oct 24, 2023)
AKD, Off the Analyst's Desk
FFBL - High offtakes and prices drive EPS higher!
FFBL just announced their 3QCY23 results, posting a standalone PAT of PkR5.3bn (EPS: PkR4.10/sh) vs. LAT of PkR1.7bn (LPS: PkR1.31/sh) in the SPLY. On a QoQ basis, the company posted a 10x hike in earnings, due to a higher topline and improving margins. Total 9MCY23 EPS came in at PkR0.27/sh, against PkR1.33/sh earned during 9MCY22. Further, the company has announced no dividend for the 9MCY23.
- Revenues rose significantly QoQ to PkR70.1bn vs PkR35.2bn (↑98.9%) in 3QCY23 and PkR22.6bn in 3QCY22 (↑210.5%YoY), on the back of higher retention prices and healthy offtakes, due to low inventory with DAP importers.
- Gross margins clocked in healthier at 14.8% against 12.9% in 2QCY23, remaining close to our expectations over unchanged gas prices, and higher product prices lending support to profitability. Margins are consistently improving after a poor start to the year due to DAP demand destruction over high prices and plant closure. Overall, 9MCY23 gross margins remained at 12.5%, lower than SPLY margin.
- Finance cost reduced marginally by 16.8%QoQ which we opine is owing to better debt management as was seen during the 1HCY23, however it is higher by 97.8%YoY owing to lingering high interest rates.
- Further, we believe dividend from PMP in 2QCY23 in addition to stable cash balances to have kept other income on the higher side (↑12.1%QoQ)
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.
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