KARACHI – Fauji Fertiliser Company (FFC) is expected to record revenues of Rs 44 billion, an annual growth of 22 percent, primarily attributable to higher urea prices. Urea prices rose due to a curtailment in gas supplied to the fertiliser sector, whereby manufacturers were forced to cut back on production. Consequently, gross margins for the company are likely to improve by 100bps to 44 percent in 2010.
FFC is scheduled to announce its 2010 result on January 27 while the company is expected to post an Earning per Share (EPS) of Rs 16.08 with Profit after Tax (PAT) of Rs 10.9 billion compared to EPS of Rs 13.0 and PAT of Rs 8.8 billion in 2009, up 24 percent in annual terms. Higher urea prices and healthy dividend income from FFBL are the main reasons for this rise in earnings.
We further expect the company to announce a final dividend of Rs 6.0 per share, which takes the cumulative dividend for the year to Rs 15.5 per share, said Bilal Qamar at JS. Strong dividend income to support the bottom line Healthy dividend income from FFBL, a subsidiary of FFC, is further expected to support the bottom line of the company. FFC would recognize Rs 2.5 billion in dividend income from FFBL in 2010 compared to Rs1.9bn in 2009, up 33 percent annually.
