Fauji Fertilizer Company’s (FFC) net profit decreased by more than a half during January-March quarter of 2016, according to a notification sent to the Pakistan Stock Exchange on Tuesday.
The company reported a net profit of Rs 2.7 billion or Rs 2.14 per share for the quarter ended March 31, 2016, down 54 per cent compared to Rs 5.9 billion or Rs 4.64 per share it earned in the same quarter of the previous year. Along with the result, the company has also declared a dividend of Rs 1.85 per share.
However, Taurus Securities says the result is in line with market expectation.
Following the result announcement, the cement manufacturer’s share price depreciated by Rs 1.90 or 3.7 per cent to Rs 105.6 compared to Rs 107.5 per share of the previous day at the end of market on Tuesday with 2.2 million shares changing hands.
The FFC reported revenues of Rs 11.6 billion during the first quarter of 2016, a decrease of 43 per cent compared to Rs 20.4 billion it earned in sales during the same quarter of 2015. “Revenue has declined owing to dismal urea off-take (a drop of 44 per cent as expected),” Fahad Rauf, from Taurus Securities said. Moreover, the analyst said a massive drop was witnessed in the company’s gross margins. The analyst attributed the ‘distortion’ in the margins to discounts on urea bag prices which triggered by low demand, a hike in the gas price during September, 2015. The increase of 12 per cent in other income and lower effective tax rate of 18 per cent provided relief to the bottom-line, according to Rauf.
