Karachi: For the Half Year Ended June 30, 2024, Fauji Fertilizer Bin Qasim Limited (FFBL) has reported a historic high in its half-yearly profits after tax (PAT) of Rs. 10.6 billion, marking a significant turnaround from the loss of Rs. 4.9 billion recorded in the same period last year. The company credits a combination of government-supported improvements in gas supply and robust international demand for diammonium phosphate (DAP) for the financial upswing.
During this period, FFBL experienced a notable increase in operational efficiency and production output, primarily due to enhanced gas supply which prevented a seasonal shutdown typical of the winter months. This adjustment resulted in a 26% increase in urea production and a 66% increase in DAP output, significantly exceeding last year’s figures. The company also intensified its market presence by boosting DAP sales, thereby strengthening its market share.
According to information available from the Pakistan Stock Exchange (PSX), FFBL's financial performance shows a revenue surge to Rs. 97 billion from Rs. 67 billion in the prior year, alongside increases in gross profit to Rs. 20.1 billion, operating profit to Rs. 14.7 billion, and profit before tax to Rs. 19.5 billion. These figures represent increases of 204%, 274%, and 732% respectively over the same period last year.
The improvement in FFBL’s financial health also reflects in the broader group’s performance, with the parent company and its subsidiaries, including a joint venture and an associate, collectively posting a profit after tax of Rs. 15.9 billion. This marks a reversal from a consolidated loss of Rs. 3.2 billion in the prior year.
Fauji Foods Limited, a subsidiary of FFBL, recorded a half-yearly PAT of Rs. 365 million, the highest since its acquisition in 2016, compared to a loss in the previous year. This upturn is attributed to increased revenue and better margins. FFBL Power Company Limited also reported consistent and profitable operations.
Looking ahead, the FFBL board has approved in principle a proposal to evaluate the potential amalgamation of FFBL with Fauji Fertilizer Company Limited, aiming to unlock synergies and enhance shareholder value. The company also praised ongoing government initiatives, including tax exemptions on urea and reduced tax rates on DAP, which are anticipated to support continued agricultural productivity and balanced fertilizer use.
As the international phosphate market remains stable, FFBL expects the domestic DAP market size to grow, benefiting overall soil nutrition and crop yields. The company remains optimistic about the future, banking on sustained government support for gas supply to ensure continued market availability of urea.