Islamabad January 31 2023: Fauji Fertilizer Company, the largest Fertilizer manufacturer in Pakistan, earned profit of PKR 20 billion in 2022, according to company filing at the Pakistan Stock Exchange.
“The year 2022 was full of challenges ranging from socioeconomic, geopolitical, governmental and environmental factors. The year witnessed galloping inflation, double digit interest rates and sharp devaluation of Pak Rupee besides heavy floods during second half of the year, negatively impacting costs of the Company. The profitability was further impacted by the levy of super tax resulting in an effective tax rate of over 40%, besides the exemption of output GST” says Company Chairman Waqar Ahmed Malik.
Efficient treasury management and increased dividend payout by associated companies resulted in highest-ever other income of PKR 14.4 billion compared to PKR 7.9 billion last year. This enabled the Company to achieve a profitability of PKR 20 billion (despite a supertax levy of PKR 5 billion) with an EPS of PKR 15.76 compared to PKR 17.21 last year. The dollarized profitability of the Company however declined by 29% to USD 97 million compared to USD 137 million last year.
“As we step into 2023, the acute shortage of foreign currency reserves in the Country pose severe challenges towards import of essential materials, spares, chemicals and other inputs required for maintaining urea production levels” says Company Chief Executive Officer Sarfaraz Ahmed Rehman
In view of declining gas pressures, the Company along with other fertilizer manufacturers and the gas supplier has undertaken gas Pressure Enhancement Facility (PEF) project which involves significant capital outlay and is essential for sustained fertilizer production. Therefore, availability of foreign exchange is critical for timely implementation of the sustainability project and continued plant operations.
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