Fauji Fertilizer Company (FFC): 3Q2018 EPS Rs4.27, +69% YoY (+114% QoQ); DPS Rs1.8/share (In line with expectations)
- Fauji Fertilizer (FFC) recorded substantial increase in its earnings to Rs4.27 per share, up by 69% YoY amid improved GP margins of 32%, +12ppts YoY and decline in finance cost by 35% YoY.
- Gross Margins of the company were up by 12ppts YoY on the back of increased retention on urea sales amid its higher prices (+21% YoY) and lower discounts.
- Profit from associates and JV were up 22% YoY to Rs1.4bn amid remarkable performance by Fauji Fertilizer Bin Qasim (FFBL), ~50% owned by FFC, posted growth of 104% in its bottom-line to Rs1.44bn. While Askari Bank (AKBL), that is 43.15% owned by FFC recorded decline of 13% YoY in its earnings.
- Other income was down 59% in 3Q2018 due to discontinuation of cash subsidy on urea. Financial results also accompanied with interim cash dividend of Rs1.8/share, taking 9M2018 DPS to Rs4.95.
- Key risks to FFC include 1) decline in international urea prices, 2) slower than expected urea sales, and 3) poor crop season.
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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