Fauji Fertilizer Bin Qasim (FFBL): 3Q2020 EPS at Rs3.54 (higher than industry expectations)
- Fauji Fertilizer Bin Qasim (FFBL) turned in an unconsolidated profit of Rs3,306mn (EPS: Rs3.54) in 3Q2020 after posting loss for six consecutive quarters.
- It takes 9M2020 loss to Rs901mn (LPS: Rs0.97) vs. a loss of Rs2,418mn (LPS: Rs2.59) during same period last year.
- The earnings came in higher than industry and ours expectations due to higher-than-expected Other Income.
- Revenues of the company increased by 14% YoY to Rs25,180mn compared to Rs22,146mn in 3Q2019 amid increase in Urea and DAP offtake by 15% YoY and 22% YoY, respectively.
- Gross margins of the company clocked in at 15.7%, up 5.4ppts YoY mainly due to reduction in cost of Gas Infrastructure Development Cess (GIDC).
- Other Expenses were down by 68% YoY to Rs134 mainly due to Exchange Gain, as per channel checks.
- Other Income increased by 24% YoY to Rs2,544mn mainly due to dividend income from FFBL Power amounting to Rs2bn, which is higher than our expectations.
Effective tax rate of the company clocked in at 16% in 3Q2020 vs. 141% in 3Q2019.
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.
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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