Karachi, October 25, 2021 (PPI-OT): FFBL: 3QCY21 Result Review

Fauji Fertilizer Bin Qasim Limited (FFBL) announced its 3QCY21 NPAT of PkR2.27bn (EPS: PkR1.76), down 13%QoQ/31%YoY, undershooting our estimates. This takes cumulative 9MCY21 NPAT to PkR6.15bn (EPS: PkR4.76) vs loss of PkR901mn (LPS: PkR0.7) in same period last year.

The sales of the company clocked in at PkR38.45bn, swelling by 127%QoQ/53%YoY on account of higher expected offtake in i) DAP (+145%YoY) and ii) Urea (+17/+35%YoY%QoQ) whereas gross margin has clocked in at 22.2% compared to 15.7% in same period last year owing to higher DAP margins, in line with our expectations.

The company registered other income of PkR4.1bn as it successfully completed the sale transaction of Fauji Wind Energy Limited I and II (FWEL I and II).

The company has recorded unusual expense of PkR4.2bn under the head of other expenses, which completely nullified the gain from the sale of FWEL I and II. We are in process to get clarity from the management regarding the unusual expense.

In addition to other expense, the company has recorded impairment of its subsidiary Fauji Meat Limited (FML) worth PkR2.1bn, further bringing down the earnings by PkR1.6/sh.