The Fauji Fertiliser Company (FFC)’s net profit decreased by 8 per cent during April-June quarter of 2016, according to a notification sent to the Pakistan Stock Exchange on Wednesday.
The company reported a net profit of Rs 2.16 billion or Rs 1.71 per share for the quarter ended June 30, down 8 per cent compared to Rs 2.36 billion it earned in the same quarter of the previous year with a per share price of Rs 1.85. The result also accompanies a cash dividend of Rs 1.55 per share.
According to AKD Research, the result was ‘in line with expectations’.
Fauji fertiliser reported revenues of Rs 16.6 billion during the second quarter of 2016, a decrease of 11 per cent compared to Rs 18.7 billion it earned in sales during the same quarter of 2015.
Following the result announcement, the fertiliser company’s share price appreciated by Re 0.58 or 0.50 per cent compared to price Rs 113.80 per share of the previous day and closed at Rs 114.38 per share at the end of market on Wednesday with 5.5 million shares changing hands.
AKD in its report said “The decline in earnings is caused by likely 25 per cent YoY decrease in urea off-take, gross margins coming off on account of increased feed and fuel gas prices in the 1st Quarter CY16 and low product prices – 5 per cent YoY decrease in Urea prices – on the back of depressed international price trend.”
Increase in finance cost on account of loans undertaken for different new growth ventures also played a role in the company’s declined profit, said the AKD Research report.