FFC_2QCY22 Result Review - Above expectation, (AKD Off the Analyst's Desk Jul 28, 2022)
AKD, Off the Analyst's Desk
FFC: 2QCY22 Result Review - Above expectation
Fauji Fertilizer Company (FFC) has announced its 2QCY22 result, where it posted unconsolidated PAT of PkR3.3bn (EPS: PkR2.64), down 7%YoY. This takes cumulative 1HCY22 PAT to PkR9.6bn (EPS: PkR7.55) vs PAT of PkR9.4bn (EPS: PkR7.42) in same period last year. The result is above our expectation attributable to higher other income, possibly due to higher than expected dividend from PMP.
- Company posted topline of PkR28.3bn vs PkR22.4bn in SPLY, depicting an increase of ~27%. The increase in topline is primarily driven by higher urea prices, which is up by 12%/6% YoY/QoQ. Urea volumes also improved by 15%/2% on YoY/QoQ basis.
- Gross margins clocked in at ~40.7% during 2QCY22, up by ~500bps on QoQ basis, attributable to higher urea price.
- Finance cost witnessed a jump of 146% on YoY basis, amid higher debt level and rising financing cost.
- Other income clocked in at PkR3.2bn, up by 164%/14% YoY/QoQ. The increase is mainly attributable to higher short term investment and higher dividend from PMP.
- Effective tax rate for the quarter clocked in at ~68%, attributable to imposition of super tax and poverty alleviation tax announced in federal budget.
- Company has announced cash dividend of PkR2.10/sh.
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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