ISLAMABAD: Fatima Fertilizer Company Ltd. (FATIMA) has announced its financial results for the third quarter of CY24, revealing consolidated earnings of PkR9.2 billion (EPS: PkR4.4), an 18% increase from PkR7.8 billion (EPS: PkR3.7) in the same period last year. However, the results fell short of expectations, primarily due to lower-than-anticipated gross margins.
According to AKD Research, sales for the quarter amounted to PkR62.6 billion, down 18% year-on-year from PkR76.2 billion. This decline is largely attributed to reduced sales volumes, particularly in Calcium Ammonium Nitrate (CAN) and Nitrophosphate (NP), which saw drops of 63% and 59% year-on-year, respectively. In contrast, urea offtakes showed a modest increase of 4% year-on-year.
Gross margins improved to 33.7%, up from 29.7% in 3QCY23. This improvement can be linked to higher primary margins on urea production from the DH and Pakarab plants, thanks to a narrowing gas price differential compared to peers. Additionally, phosphate rock prices fell significantly, dropping to US$153 per ton from US$345 per ton a year ago.
Distribution expenses decreased to PkR3.5 billion, down 7% year-on-year from PkR3.8 billion, reflecting the drop in sales volume and a 10% year-on-year decline in High-Speed Diesel (HSD) prices.
FATIMA also reported a 43% year-on-year increase in other income, totaling PkR2.1 billion, driven by a 54% rise in cash and investments during the quarter. Meanwhile, finance costs decreased to PkR960 million, down from PkR1.1 billion in 3QCY23, due to reduced borrowings, which stood at PkR23.0 billion as of June 2024, compared to PkR30.2 billion in June 2023.
Cumulatively, earnings for the first nine months of CY24 reached PkR10.8 per share, a substantial increase of 75% compared to PkR6.2 per share in the same period last year.
