Karachi, Fauji Fertilizer Bin Qasim Limited (FFBL) today announced a slight increase in earnings for the first quarter of 2024, driven by a normalization of tax charges after a period of one-time adjustments.

According to AKD Securities Limited, FFBL posted earnings of PkR4.3 billion in the first quarter of the calendar year 2024, a 6% increase from PkR4.0 billion in the previous quarter. This growth is primarily attributed to the normalized tax charge during the quarter, which contrasts with the one-time tax adjustments made in the fourth quarter of 2023. The results were in line with market expectations.

The company’s revenue declined by 17% quarter-over-quarter to PkR46.5 billion, primarily due to decreased offtakes with sales of DAP and Urea falling by 25% and 8%, respectively. Gross margins also contracted to 18.9% from 28.4% in the previous quarter, likely due to an upward adjustment in gas pricing that took effect in February 2024.

Operating expenses saw a significant reduction, dropping by 48% to PkR2.8 billion, which could be attributed to lower transportation costs linked to reduced sales volumes. Conversely, other income saw a substantial increase of 28% to PkR4.0 billion, boosted by a rise in short-term investments, which grew from PkR13.1 billion at the end of September 2023 to PkR33.7 billion by December 2023.

Finance costs also decreased by 11% to PkR1.0 billion compared to PkR1.1 billion in the preceding quarter, reflecting reduced debt levels.