Fauji Fertilizer Bin Qasim Limited (FFBL) - May 2023

Fauji Fertilizer Bin Qasim Limited (FFBL) – May 2023

Research Team

Table of Contents

Fuaji Fertilizer Bin Qasim Limited (FFBL) held a corporate briefing session today to discuss the financial performance of 1QFY23 and discussed its future outlook.

Key Highlights

• 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.

Future Outlook

• 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.

Important Disclosures


This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.

Analyst certification:

The research analyst for this report, certifies that 1.all of the views expressed in this report accurately reflect her personal views about the subject and 2.no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this report.

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