Fauji Fertilizer Company (FFC): 2Q2020 EPS Rs3.83, down 6% YoY (Result inline with industry expectations)
- Fauji Fertilizer (FFC) announced its 2Q2020 financial result today, where the company booked unconsolidated profits of Rs4,874mn (EPS: Rs3.83) compared to Rs5,209mn (EPS: Rs4.09) in 2Q2019.
- It takes 1H2020 earnings to Rs9,136mn (EPS: Rs7.18), up by 3% YoY.
- Alongside result, the company announced interim cash dividend of Rs2.75/share. It takes total cash dividend to Rs5.25/share in 1H2020.
- Revenues of the company declined by 12% YoY to Rs23,156mn in 2Q2020 amidst decline in DAP offtake by 57% YoY to 26k tons compared to 61k tons in 2Q2019.
- To highlight, Urea sales were up by 9% YoY to 681k tons compared to 623k tons.
- Gross margin declined by 1.8ppts YoY to 32% in 2Q2020 from 33.8% in 2Q2019, which is in line with our estimate.
- Other expenses declined by 52% YoY to Rs628mn from Rs1,322mn amidst absence of one off impairment loss booked on Fauji Fresh n Freeze Limited of Rs1,100mn in 2Q2019.
- Finance costs decreased by 27% YoY to Rs462mn in 2Q2020 amidst lower borrowing and interest rates.
Effective tax rate clocked in at 28% in 2Q2020 vs. 27% in 2Q2019.
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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