The Fauji Fertiliser Company has announced half yearly results amid unprecedented adverse market conditions. The urea industry has remained under severe pressure during the period. This is mainly attributed to poor farm economics and persisting rumors of urea subsidy that negatively impacted urea sales.
Thus, the urea market has witnessed a substantial decline of around 36 percent in sales, which is the lowest half yearly offtake in more than a decade. In spite of volatile market conditions, the company recorded net earnings of Rs 4.89 billion for the period ending on June 30, in spite of levy of a three-percent super-tax and absorption of part of fertiliser subsidy announced by the government.
Although, the company's core business witnessed a significant decline following the above-mentioned factors, however, the deficit has been bridged by highest ever dividend of Rs 2.27 billion received through associated companies. The company earned Rs 3.85 per share, while declaring divided per share of Rs 1.55 and created a new benchmark during the period in terms of highest ever urea production of 1.25 million tonnes with lowest shut down periods which reflects operational excellence of our engineers and the management.
The company has also achieved 12.6 million man-hours of safe operations without lost work injury. The rising inventory and high cost of production continue to pose substantial risk to the company's profitability; however, the management is committed to mitigate the negative impact of the current business environment through various strategies.