Fuaji Fertilizer Bin Qasim Limited (FFBL) held a corporate briefing session today to discuss the financial performance of 1QFY23 and discussed its future outlook.
• FFBL reported a loss after tax of PKR 5.4 billion in 1QFY23 against a profit after tax of PKR 1.6 billion in 1QFY22. Exchange losses, higher finance cost and super tax negatively impacted the bottom line of the Company.
• Market share of FFBL declined from 8% in 1QFY22 to 6% in 1QFY23 in Urea market. However, the Company gained market share in DAP market to 54% in the quarter from 47% over the SPLY.
• FFBL sold 67% of the DAP inventory carried over from the last year along with the execution of TA after two years in this quarter.
• The production and sale of the urea was negatively impacted by the gas curtailment by 51% in 1QFY23. The production reduced, 26% down, to 89KT in this quarter from 121KT over the SPLY.
• DAP sales in 1QFY23 increased to 127KT, up by 10%, from 115KT over the SPLY.
• The bottom line was primarily impacted by the exchange loss, GST impact and finance cost in 1QFY23.
• With the local thar coal use of 40% in the coal mix, the FPCL is saving forex and boosting the profitability with smart coal supply chain. Similarly, the Fauji meat Limited maintained profitability with cost optimization and positive EBITDA in 1QFY23.
• Fauji Foods Limited showed impressive revenue growth of 117% in 1QFY23. Margins also doubled (12.8%) during the same period along with a positive EBITDA. Company also managed to eliminate the finance cost in March 2023.
• With rising commodity prices, FFBL expects to improve farm economics if farmers receive the subsidy as it will boost their purchasing power.
• Going forward, the management highlighted to reduce the costs to improve margins in upcoming quarters.
• The management is in negotiations with the government on the resolution of GST and local DAP manufacturing.
• Company management shared that inflation, super tax and currency devaluation will continue to affect the bottom line of the Company in future.
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