Karachi October 31 2021: Despite having capacity constraints, Company has been able to increase production from 1205 tons (96 percent capacity utilization) in the corresponding period to 1271 tons (102 percent capacity utilization) during the 1st Quarter, thereby exceeding the nameplate capacity through a continuous push for operational efficiencies.
Nonetheless, the Company is expecting to continue to be affected by some delay penalties on deliveries whilst continuing to focus on operating the plant at maximum capacity during this financial year to service the requirements.
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Fauji Fertilizer Bin Qasim Share Price Heading Towards Cap As It Clears Short Term Borrowing: PSX
The Board of Directors of the Company in their meeting held on 22 April 2021, and duly ratified in the AGM held on 30 September 2021 have approved the expansion plans at the Company's Insulator plant. This plan will enable the Company to boost output by 40%, and will streamline the Company's operations. Going forward, the Company is confident that the demand for Insulators and allied equipment will remain buoyant in the near future on account of building new capacity and rehabilitating existing transmission and distribution to handle additional power generation injected into the system. The Company is carefully following the current fluctuations in exchange rate and is mindful of the current upheaval in the logistics sector. These variables may have an impact on the expansion plan timelines.
During the 1st Quarter under review, Revenue are PKR 546.69 million compared to PKR 462.88 million in the previous corresponding period. The top line of the company grew by 18.1 percent primarily on account of operational efficiencies to enhance production output, along with rationalization in selling prices adjusted for rapidly rising input costs.
Gross Profit increased to PKR135.42 million as compared to PKR 125.70 million in the corresponding quarter of the last year witnessing an increase of 7.73 percent. Your Company has earned a pre-tax profit of PKR 85.7M (15.7 percent of Revenue) compared with PKR 72.23 million (15.6 percent of Revenue) in the same period last year, thereby registering an increase of 18.6 percent. Similarly, after tax profit was recorded at PKR 61.34 million (11.2 percent of Revenue) compared to PKR 60.18 million (13 percent of Revenue) in the same period last year. Whilst the Company retained a focus on improving production output and controlling expenses, leading to improved pre-tax profitability, the Company has absorbed its carried forward tax benefits and is now booking normal tax liabilities, which has resulted in a higher tax liability for the period.
However, the challenges of rising input costs of major metal based raw materials, devaluation of the Pakistani rupee, as well as rapidly escalating RLNG, fuel and power prices will continue to stress the Company's bottom line. Similarly, whilst the waning COVID-19 pandemic has led to significant rebounding of demand for our products, the related impact on global logistics coupled with the Power crisis in China is expected to cause further ripples in planning for the near future. However, your company is resilient enough to cope with such challenges.
This is the first full quarter where the Company benefited from its 982kWp PV Solar Energy system. 20 percent of the Company's energy needs and now met by this renewable energy source, which has not only contributed positively to the profitability, but is a major step towards the Company's vision to reduce its carbon footprint.
Financial cost of the company also decreased to 3.5 percent of Revenue from 4.4 percent of Revenue in corresponding period. This was due to lower borrowing despite marginal increase in policy rate during the quarter under review compared with corresponding quarter of the last year.
