ISLAMABAD: The Fauji Fertilizer Company (FFC) has posted 83 per cent decline in its earnings during the first quarter of current fiscal year.
In its consolidated condensed interim profit and loss statement for the quarter ended March 31, 2016, issued to the Pakistan Stock Exchange, the company reported a net profit of Rs769.41 million as compared to Rs4.55 billion during the same period of the last year.
The company also announced first interim cash dividend of Rs1.85, or 18.5 percent, per share.
Earnings per share (EPS) came in at 60 paisas as compared to Rs3.58 last year. The result is in line with the market expectations.
The company said its total sales fell 42 percent to Rs11.96 billion as compared to Rs20.67 billion a year ago.
Cost of sales was recorded at Rs8.96 billion against Rs12.29 billion. Thus, the gross profit of the fertilizer company reduced to Rs3 billion against Rs8.37 billion in the same quarter of the last year.
A statement of the FFC said urea industry remained under severe stress during the period. This is mainly related to poor farm economics and unprecedented rise in the cost of production, while declining international urea prices and non-implementation of ‘Kissan Package’ by the government caused market uncertainty.
Thus, the urea market witnessed substantial decline to around 50 percent in sales, while inventory accumulated to 1.2 million tonnes with combined share of FFC / FFBL at 35 percent of the total inventory.
The urea production by the company remained par excellence, with second highest urea output ever of 614,000 tons.
Sales revenue was also negatively impacted by suppressed selling prices, which resulted in significant absorption of feed / fuel gas costs that is more than double the prevalent gas prices in the Middle East.
