Karachi: Fauji Fertilizer Company (FFC) has reported a significant increase in its consolidated earnings for the first nine months of 2026, despite challenges posed by rising costs in raw materials. The company's earnings rose by 13% year-on-year to Rs71 billion, with standalone earnings of Rs64.2 billion, marking an 11% increase from the previous year.

According to JS Global, the company's revenue for the period grew by 16% to Rs327 billion, with a gross profit increase of 15% to Rs107 billion. The core fertilizer business saw a 20% rise in profit after tax, reaching Rs39.5 billion. FFC's urea sales outperformed the industry, increasing by 10% to 2.16 million tons, and its market share rose by two percentage points to 49%. However, sales of diammonium phosphate (DAP) declined by 3%, aligning with the overall industry trend.

FFC faces ongoing challenges due to elevated phosphoric acid and imported DAP prices, driven by geopolitical tensions in the Middle East. These price hikes have impacted the company's manufacturing costs. Despite this, FFC's inventory of phosphoric acid is deemed sufficient to meet production needs for the remainder of the year.

The company has noted no immediate changes in gas pricing or subsidies, and dealer margins for urea and DAP remain stable. FFC's Sona Centers reported impressive growth, with urea and DAP sales rising significantly. The centers are set to expand further in 2027.

While FFC received dividends from its energy investments in the third quarter, no further inflows are anticipated for the remainder of the year. Additionally, the company's borrowings have increased to fund investments, raising its debt-to-equity ratio to 68%. Management remains optimistic about demand for the Rabi season, though cost pressures are a concern.