Karachi October 29 2021: Fauji Fertilizer Bin Qasim gain PKR 1.08 per share or 4.71 percent after it disclosed that that the short term borrowing of the company has been reduced to PKR 14 billion.
Short term borrowing of the company has been reduced to PKR 1.6 billion from PKR 15.8 billion on 31st December 2020.
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During the period, domestic Urea market is estimated to have grown by 11% from 4,213 KT to 4,656 KT on the back drop of improved farm economies, farmer friendly government policies and favourable growing conditions. The Company was successful in achieving 8% (Sep 2020: 9%) Urea market share despite lower production as compared to corresponding period. Domestic DAP market is estimated to have declined by 13% from 1,373 KT to 1,198 KT primarily due to continuously rising international prices together with weakening of Pak Rupee against US dollar and availability of cheaper alternatives. However, irrespective of decline in DAP market, the Company continues to lead by further increasing its market share to 43% (Sep 2020: 41%). International DAP prices are currently hovering around USD 680 per ton (CFR Pakistan) as compared to USD 360 per ton (CFR Pakistan) at the close of comparative period.
Quarterly financial results improved significantly in comparison to quarter ended 30 September 2020. The Company achieved PKR 6.6 billion profit from operations in comparison to PKR 2 billion profit in comparative quarter backed by revenue increase of 53% from PKR 25 billion to PKR 39 billion and increase in gross profit margin from 16% to 22%. The Company successfully completed sale of equity investment in Foundation Wind Energy - I Limited and Foundation Wind Energy - II Limited (FWE-I & II) to Fauji Fertilizer Company Limited realising a gain of PKR 2.8 billion. The Company booked impairment loss of PKR 2 billion on investment in Fauji Meat Limited (FML). Albeit, quarter ended on a good note with overall profit after tax of PKR 2.3 billion.
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Financial results for the period witnessed promising growth as the Company achieved PKR 10 billion profit from operations as compared to PKR 1 billion profit in comparative period as revenue increased by 37% from PKR 50 billion to PKR 68 billion fuelled primarily by rising international DAP prices. Moreover, efficient working capital management resulted a reduction in finance cost by PKR 1.7 billion. Other expense went up by PKR 6 billion due to increase in foreign exchange loss amid continuing surge of US dollar against Pak Rupee, impairment and expected credit loss on investment in FML and unwinding of GIDC liability. However, increase in other expenses was offset, to some extent, by gain of PKR 2.8 billion arising on sale of equity stakes in FWE- I & II and increased dividend income. In the meanwhile, long outstanding receivable from the Government of Pakistan surged to PKR 14 billion comprising PKR 11 billion on account of sales tax refunds and PKR 3 billion in relation to subsidy on sale of fertilizer. In a nutshell, the Company weathered the storm with brilliance and successfully returned to profit after tax of PKR 6 billion from loss after tax of PKR 1 billion in comparative period.
The plant successfully achieved 22.14 million safe-man-hours with 29KT excess production of fertilizer as compared to corresponding period. Improved performance was achieved by focusing on prevention of downtime, increasing awareness through leadership, and creating an open dialogue environment. The Company has been awarded with the “Health, Safety & Environment Performance Award 2021” by the Professional Network, for the 6th consecutive term. As a recognition of our commitment to contribute towards sustainable environment, the Company has also been …