KARACHI – With fertiliser plants still facing restrictions in gas supply from the Mari and Sui gas networks, respectively, a slowdown in offtake numbers during 2011 is foreseen. However, the recent urea price hikes following the enhanced gas curbing by the government will more than offset the production loss to the companies especially those who receive gas from Mari field.
FFC being one of these has also avoided a complete winter gas shutdown (unlike plants on the Sui network) and stands at a relatively better position than other fertiliser manufacturers, said Bilal Qamar at JS, adding that a possible acquisition of Agritech by FFC can be another booster for the company.
Despite gas curtailment issues and flooding in the country during the second half of 2010, Fauji Fertiliser Company Limited (FFC) posted strong earnings of Rs 11.0 billion with a diluted EPS of Rs13.0 in 2010 compared to profit after tax of Rs8.8 billion with a diluted EPS of Rs10.4, up 25 percent annually.
Higher urea prices and increased dividend income from FFBL were the major reasons for an annual growth in the bottom line. Along with the result, FFC announced a final cash dividend of 35 percent (cumulative dividend of 130 percent) and a bonus issue of 25 percent.
Higher dividend income, Rs 2.5 billion, up 32 percent in annual terms, from FFBL helped ensure that the company’s bottom line sustained growth despite rising distribution costs and other expenses. Other Income on the whole grew by 13 percent in 2010, while distribution expenses stood at Rs3.9 billion, up 24 percent since the same time last year and other expenses rose by eight percent annually to Rs1.4 billion in the same period. As a result, FFC posted earnings of Rs11 billion with a diluted EPS of Rs13 compared to profits of Rs 8.8 billion with EPS of Rs 10.4 in 2010.
