Quarter after quarter, year after year-you get to hear this-Fauji Fertilizer Company (FFC) records massive increase in profits. This does not sound like news anymore as FFC clocked in another quarter of fine performance, jacking up its 3Q CY13 revenue massively by 56 percent, compared to the same period of last year. To investors delight, FFC continued with its celebrated history of paying rich dividends-doling out another Rs4.1 in interim dividend.
There was hardly a noticeable event throughout the period as far as sales and productions are concerned. It was business as usual for the urea giant --selling and producing almost similar amount as of the previous year. The uptick in revenue was a result of slight increase in off-take while prices remained firm.
FFC managed to maintain its high gross profit margin despite sizeable increase in fuel gas price. The most significant contribution other than the core business was again provided by the other income header. FFC now has the luxury of dividend incomes from Fauji Cement as well, in addition to the traditional contributions from Fauji Fertilizer Bin Qasim.
There is hardly anything for FFC to sweat about going forward as it continues to benefit for being connected to Mari for its gas supplies. The gulf between international urea price and local price is still significant. So, even if gas tariffs are rationalised from here on out, prices charged to the Companys clientele can be raised without worries over margins. With the traditional high off-take last quarter remaining, FC appears all set to smash its all-time record profits--yet again.
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FAUJI FERTILIZER COMPANY
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Rs (mn) 3QCY13 chg 9MCY13 chg
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Sales 18128 30% 52533 5%
Cost of sales 9263 31% 27356 6%
Gross profit 8865 30% 25177 4%
Gross margin 49% 48%
Distribution cost 1558 28% 4480 16%
Other income 1414 270% 3407 20%
PAT 5402 56% 14898 8%
EPS (Rs) 4.25 11.71
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Source: KSE notice
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