By: WE Financial Services Limited
The meeting of the board directors of Fauji Fertilizer Company (FFC) to announce corporate results for CY15 will be held on January 27, 2015 where we expect that the bottom-line to witness a 9% YoY decline owing to hike in gas prices and higher finance cost. The profit after taxation (PAT) of the company is expected to total Rs 16,474 million (EPS: Rs 12.95) in CY15 which is 9% YoY down when compared to a PAT of Rs 18,171 million (EPS: Rs 14.28) in CY14.
Double digit decline expected in 4QCY15 The PAT of the company is likely to drop by 13% in 4QCY15 as it is expected to total Rs 4,528 million (EPS: Rs 3.56) versus a PAT of Rs 5,209 million (EPS: Rs 4.09) in 4QCY14. This decline would be attributed to multiple factors which include; increase in cost of sales, decline in other income, and hike in finance cost. However net revenue to remain higher on back of 21% growth in volumetric sales. The corporate results are likely to be accompanied with a final cash dividend to Rs 3.5/share.
Higher net revenue to support The bottom-line growth however would be supported by 6% YoY hike in net revenue on back of rise in volumetric sales and better urea prices. The net revenue of the company is expected to total Rs 86,323 million in CY15 resulting in a 6% YoY growth when compared to a net revenue of Rs 81,240 million in CY14. The volumetric sales of urea totaled 2.4 million tons during the year which is 4% YoY up from 2.3 million tons of urea sold in CY14.