Karachi, January 28, 2014 (PPI-OT): Fauji Fertilizer Company- Result preview
FFC: CY13 earnings to swing around Rs17.5/sh
According to Standard Capital, fauji Fertilizer Company (FFC) to announce its financial statements for CY13 on 29th January 14. Standard Capital expects earnings for CY13 will be swinging around Rs 17.5/sh for the CY13 against Rs 16.4/sh. Based on company’s payout policy Standard Capital expects that company may announce Rs 4.5/sh cash dividend, this will be addition to interim cash dividend of Rs 11.35/sh making cumulative full year cash dividend of Rs 15.85/sh (92% payout ratio).
Company may report net sales of Rs 81.75bn for CY13, up by 10% against corresponding period sales of Rs 74.32bn, the increase in sales is mainly due to growth in volumetric sales and price increase of Urea and DAP products. Beside gas curtailment and other issues Standard Capital expects FFC will be managing its gross profit margin around 48% and may report gross profit of Rs 39.2bn for CY13 against Rs 36bn in same period last year (SPLY)
Fauji Fertilizer Company
Profit & Loss account
(In Million Rs) CY12A CY13E CY14E CY15E Net Sales 74,323 81,755 87,478 90,102 Cost of Sales 38,324 47,261 46,169 45,620 Gross profit 35,998 39,242 42,427 43,519 GP Margin 48.4% 48.0% 48.5% 48.3% Distribution Cost 5,561 7,124 8,142 9,072 Finance Cost 999 715 715 715 Other Expenses 2,685 2,616 2,799 2,883 Other Income 4,268 4,481 4,705 4,941 Profit before tax 31,021 33,269 35,475 35,789 Provision for taxation 10,181 11,311 12,062 12,168 Net Profit after tax 20,840 21,957 23,414 23,621 EPS 16.4 17.3 18.4 18.6 DPS 14.5 15.9 17.5 17.6
Valuation: –
Based on Standard Capital’s expected EPS of Rs 17.3 and DPS of 15.85/sh for CY13, FFC yield PE of 6.7x and dividend yield of 14% for CY13. And for the future perspective FFC yield PE of 6.3x and 15% dividend yield for CY14 and CY15. Standard Capital maintains HOLD stance for FFC being a most defensive stock.