Rawalpindi (PNI) Fauji Fertilizer Company Limited (FFC) has announced its financial results for the year ended December 31, 2023 in its Board of Directors meeting held on January 26, 2024.
The year 2023 faced high inflation and interest rates while the Pak Rupee also continued its downward trajectory against US dollar, resulting in higher operating and financing costs of the Company. The retrospective increase in Super Tax levy led to higher effective tax rate of 45% compared to 40% last year, further pressurizing Company profitability.
Gas prices for the fertilizer sector were also increased significantly by 75%, however, the Company only passed on a partial impact in urea price during 2023, to offer urea at most economical rates to the farmers.
Urea selling prices exhibited significant variations within the fertilizer industry, with FFC offering urea at lower selling prices by around Rs 200-500 per bag during most part of the year. Sona urea prices towards the close of 2023 stood at around Rs 3,400 per bag in contrast to international prices hovering around Rs 6,200 per bag.
FFC ensured fertilizer supply across the country through its nationwide network of warehouses and dealers, and also to avoid unscrupulous practices by some elements through equitable fertilizer distribution and real time monitoring fertilizer shipments and dealer stock. Dealerships were sensitized to market fertilizers at FFC suggested rates, while the farmers were also made aware to purchase product through registered dealers at prescribed rates. To further ease out urea availability and pricing issues for the farmers, the Company along with the Industry has coordinated a plan with Government to import urea and distribute it during 2024.
Urea production stood at an outstanding 2,521 thousand tonnes, 5% higher than last year while maintaining high reliability factors and optimum standards of Health, Safety and Environment.
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.
Profit after tax stood at Rs 29.67 billion and it includes Rs. 17.1 billion of other income. The earnings in dollar terms, however, registered negative growth compared to 2021 and stood at the level of 2017.
FFC also continued its significant contribution towards the national exchequer through taxes and levies of Rs 36 billion compared to Rs 30 billion last year. The Company also enabled savings of around USD 1 billion foreign exchange to the Country via import substitution during 2023 with aggregate savings of around USD 4.8 billion during the last five years.
The company also declared the final dividend of Rs 4.10 per share, with an aggregate distribution of Rs 15.49 per share for the year 2023.
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