During its Board of Directors meeting on January 26, 2024, Fauji Fertilizer Company Limited (FFC) revealed its financial results for the year that concluded on December 31, 2023.
In 2023, the Pak Rupee maintained its downward trend against the US dollar, and high interest rates and inflation made operating and financing expenditures for the company more expensive. The company’s profitability was further pressured by the retrospective increase in the Super Tax levy, which resulted in an effective tax rate of 45% as opposed to 40% the previous year.
In order to provide farmers with urea at the most competitive costs in 2023, the company only partially passed on the large 75% increase in gas prices for the fertilizer industry.
The fertilizer business saw notable fluctuations in urea selling prices, with FFC providing urea at reduced selling rates by approximately Rs 200-500 per bag for the majority of the year. As 2023 came to an end, the price of sona urea was approximately Rs 3,400 per bag, while worldwide costs were approximately Rs 6,200 per bag.
Through its extensive statewide network of dealers and warehouses, FFC guaranteed the availability of fertilizer across the nation. It also prevented unethical behavior on the part of some parties by distributing fertilizer equitably and keeping real-time track of dealer stock and fertilizer shipments. Dealerships received training on how to sell fertilizers at FFC recommended rates, and farmers were informed about the need to buy goods at approved prices from registered dealers. The Company, Industry, and Government have worked together to arrange a strategy for the import and distribution of urea in 2024, which will help farmers with the problems of urea pricing and availability even more.
Impressively, urea output reached 2,521 thousand tonnes, 5% more than the previous year, all while upholding the highest standards possible for environmental, health, and safety.
The profitability for 2023 barely covers the Company’s requirement to build up reserves for the capital-intensive and foreign exchange denominated nodal compression project in addition to essential maintenance of plants at world class level. The Company is about to kick off phase II of the critical Nodal Compression Project with capital outlay of over USD 100 million.
The profit after tax was Rs 29.67 billion, which includes other income of Rs 17.1 billion. However, the earnings in US dollars decreased in comparison to 2021 and remained at the 2017 level.
FFC also kept up its major tax and levied revenue contribution to the national exchequer, which was Rs 36 billion this year as opposed to Rs 30 billion the previous year. Additionally, the Company made it possible for the Country to save approximately USD 1 billion in foreign exchange in 2023 through import substitution, totaling around USD 4.8 billion in savings over the previous five years.
Additionally, the firm said that it will distribute an aggregate of Rs 15.49 per share in 2023, which equates to a final dividend of Rs 4.10 per share.
