AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Islamabad: Fauji Fertilizer Company Ltd. (FFC) announced a significant increase in earnings for the first quarter of the calendar year 2025 during a corporate briefing, despite facing industry-wide challenges. The company reported earnings of PkR13.3 billion, a notable rise from PkR10.5 billion in the same period last year, driven by improved gross margins and higher DAP volumes.
The fertilizer segment of FFC contributed PkR8.1 billion to the profitability, supplemented by PkR2.0 billion from dividends and PkR3.2 billion from portfolio income. This growth comes amid a broader industry downturn, with urea sales witnessing a 40% year-on-year decline due to challenging farm economics, reduced wheat cultivation, and poor rainfall.
FFC’s urea production also decreased by 13% year-on-year to 588,000 tons due to scheduled maintenance at Goth Machi and Port Qasim plants. Despite a 13% drop in urea sales, the company increased its market share to 49% from 45% last year. The company’s inventory now constitutes 16% of the total industry stock, equivalent to 132,000 tons.
However, FFC’s DAP sales fell by 55% year-on-year, resulting in a decrease in market share from 66% to 63%. Management remains optimistic, forecasting a rebound in nutrient demand and projecting total urea sales to surpass 6 million tons for the year.
Management does not anticipate any changes in gas prices under the Mari network, with the price delta between international and local urea remaining at PkR3,295 per bag. The company has refrained from offering price discounts, focusing instead on expanding its network of Sona centers to ensure fertilizer availability at controlled rates.
Additionally, FFC is working towards obtaining Shariah-compliant status and aims for completion in the coming months. Structural reforms are also planned following a recent reconstitution of AGL’s board.
The Pressure Enhancement Facility (PEF) project, a joint effort with EFERT and FATIMA, is underway to improve gas pressure from the Mari field, with phase-1 expected to conclude by the first half of 2025.
FFC maintains a positive outlook on its shares, with a projected target price of PkR583 by December 2025, supported by synergies with FFBL and stable gross margins owing to cheaper gas for its base plants.