The company's net profit, after taxation in FY06 amounted to Rs 2.445 billion as compared to Rs 2.449 billion in FY05, which is identical to as last year's.
Accordingly, earning per share at Rs 2.62 in FY06 is same as of last year's. The company has gratifying record of regular and attractive profit distribution since the last three years although it is carrying accumulated losses as shown in the "performance statistics" appended with this "Brief".
The detail of sales and production of its products urea and DAP have been given in this write up which shows that the enterprise is contributing immensely to all stakeholders ie shareholders, GOP and agriculturists etc market price of its share, during the last 52 weeks has remained much above twice of its par value. In this period market price of its share ranged between Rs 24.15 and Rs 38 per share (source: Business Recorder 22-05-2007). On 21st May 2007, the closing price of the share was quoted at Rs 36.15 per share, which is near to four times of its par value. At this price its market capitalization has soared to Rs 33.8 billion from its paid-up capital of Rs 9.34 billion.
Other incomes from GOP compensation and bank deposits have also boosted its profit and liquidity. Fauji Fertiliser Bin Qasim Ltd is a subsidiary of Fauji Fertiliser Company Ltd with shareholding of 50.88% of the company. Its shares are quoted on Karachi, Lahore and Islamabad stock exchanges and its registered office is situated at Rawalpindi. Where the company is domiciled.
The principal objective of the company is manufacturing, purchasing and marketing of fertiliser including investment in fertiliser raw material manufacturing operations. The company commenced commercial production effective January 1, 2000. During the financial year ended December 31, 2006 (FY06) the company's production of urea fertiliser increased to Rs 601.04 thousand tonnes as against Rs 588.79 in the preceding year registering 2% increase. As regards production of DAP fertiliser, output marginally decreased by 0.93% in FY06 to 450.40 thousand tonnes as against 454.67 thousand tonnes in the preceding year. In both the products the company attained more than 100% capacity utilization.
The directors reported that turn around of 27 days ie from March 21st to April 16th 2006, has been the salient feature of the year's performance, which was aimed at improving the reliability and increasing production capacity of ammonia, urea and DAP plants. The first phase of ammonia BMRE (balancing modernization, revamping and expansion) successfully completed. Resultantly, highest daily as well as annual production of urea and ammonia was achieved.
As regard final phase of BMRE of the plant, the implementation of the project is reported to be progressing satisfactorily. Ammonia project would be complete by the end of second quarter of 2007 and is likely to increase its production to 123%. DAP expansion by the end of 4th quarter 2007 would be raising production to 151%.
As regard sales performance, the company posted sales in terms of value at Rs 14.707 billion in FY06 as against Rs 14.255 billion net sales in the preceding year showing 0.452 billion or 3.17% increased as compared to the preceding year. The figure of net sales was arrived after deductions of sales tax, trade discount and commission to the holding company as the commission is paid @Re 1 per bag sold to the holding company, based on inter company services agreement. According to the annual report 2006, of the company, the sales performance in terms volume achieved was higher than sales targets in both urea and DAP. In urea sales it attained 104 percent of target and registered 3% increase in sales as compared to sales of preceding year FY05. In Sona DAP sales, the company achieved 109% of target while the sales amount in FY06 was 10% higher than preceding year.
In terms of share of market growth in urea sales, market share remained same whereas in Sona DAP sales the company's market share slightly narrowed to 31.1% as compared to 31.9% in the last year. This performance can be evaluated in the light of industry's growth.
According to the annual report 2006 of the company, during the year 2006 industry urea sales at 5,236 Kt (thousand tonnes) were 1% higher than 5,179 Kt of the previous year. Fertiliser marketing companies also increased urea prices by Rs 46 per bag during the year under review.
This increase was attributed to inflation and rise in fuel/feed gas prices by GOP in the months of January and July. Industry DAP sales in FY06, stood at 1,517 Kt which were 11% higher than 1,367 Kt sales in FY05. During January-June 2006, DAP industry showed sales growth of 3% over same period last year.
News about GOP's intentions to subsidize Phosphatic and Potassic fertilisers adversely affected sales during third quarter of the year. Consequently the sales showed a decline of 56% against the sales of the third quarter of year 2005. However, GOP subsidy of Rs 250 per bag boosted sales by 58% during the fourth quarter of the year vis-a-vis over the same period of the last year.
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Performance Statistics (Million Rupees)
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31 December 2006 2005
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Share Capital-Paid-up: 9,341.10 9,341.10
Capital Reserve: 228.35 228.35
Accumulated (Loss): (1,031.75) (1,841.92)
Shareholders' Equity: 8,537.70 7,727.53
L.T. Debts: 8,079.99 9,186.80
Deferred Tax Liability: 2,634.34 1,322.28
Current Liabilities
& Provisions: 8,429.33 6,344.84
Fixed Assets Tangible: 14,930.34 14,563.10
L.T. Investments: 1,411.15 734.28
L.T. Deposits: 17.27 17.40
Current Assets: 11,322.60 9,266.67
Total Assets: 27,681.36 24,581.45
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Sales, Profit & Pay out
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Sales-Net: 14,707.29 14,254.76
Gross Profit: 4,684.24 4,562.53
Finance (Cost): (412.37) (259.82)
(Depreciation): (990.14) (939.44)
Compensation from GOP: 700.00 700.00
Profit Before Taxation: 3,756.91 3,914.92
Profit After Taxation: 2,444.86 2,449.11
Earnings Per Share (Rs): 2.62 2.62
Dividend Rs Per Share: 2.50 2.50
Share Price (Rs) on 21/05/2007: 36.15 -
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Financial Ratios
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Price/Earning Ratio: 14.46 -
Book Value Per Share: 9.14 8.27
Price/Book Value Ratio: 3.95 -
Debt/Equity Ratio: 49:51 46:54
Current Ratio: 1.34 1.46
Assets Turn Over Ratio: 0.53 0.58
Days Receivables: 6 3
Days Inventory: 29 38
Gross Profit Margin (%): 31.85 32.01
Net Profit Margin (%): 16.62 17.18
R.O.A (%): 8.83 9.96
R.O.C.E (%): 12.70 13.43
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Capacity & Actual Production Urea & DAP (000 Tonnes)
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Urea----------------
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Design Capacity: 551.10 551.10
Actual Production: 601.04 588.80
Capacity Utilization (%): 109.06 106.84
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DAP----------------
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Design Capacity: 445.50 445.50
Actual Production: 450.40 454.67
Capacity Utilization (%): 101.10 102.06
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