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Karachi, October 22, 2012 (PPI-OT): FFC 3Q figures remained below par but worst may be over
FFC reported flat earnings during 9MCY12 wherein urea off-take increased only in last week of September once the prices of Urea were brought down by FFC management.
According to Standard Capital, this resulted in miniscule decrease in y-o-y PAT amounting Rs.13.7 billion (EPS:Rs.10.84/sh) as against Rs.13.8 billion (EPS:Rs.10.87/sh) in the corresponding period last year. FFC also paid cumulative dividend of Rs 11/sh (irrespective of fewer earnings base).
Quarterly performance of the company remained below par given weak urea off-take during the period that prompted the company to bring down prices on few occasions (Rs 10/50kg bag on last occasion in Sept). It was only in 3rd and 4th week of Sept when inventories finally sold out. Government was still trying to import urea from international market at higher rates instead of encouraging local manufacturers. FFC, however, remained at an advantageous position (market share of exactly 33%) due to dedicated gas feedstock gas supply from Mari Gas field. Standard Capital expects urea off-take to improve in Rabi season wherein urea inventories could be sold out at present rates (above Rs 1600/50kg bag) in following months (especially at the advent of the election year).
| FFC quarterly snapshot | ||||
| Rs 000 | Q4CY11 | Q1CY12 | Q2CY12 | Q3CY12 |
| Sales |
16,689,096 |
11,432,825 |
24,697,952 |
13,903,434 |
| Gross Profit |
12,356,783 |
5,757,959 |
11,558,911 |
6,844,009 |
| PAT |
8,657,119 |
3,875,106 |
6,459,684 |
3,457,926 |
| EPS |
6.80 |
3.05 |
5.08 |
2.72 |
| DPS |
5.25 |
3 |
5 |
2.5 |
Company recordings and www.scstrade.com
FFC is also bracing for wind power project this year (Standard Capital will come up with detailed recordings on that once the report for 9MCY12 is unwind).
| Rs.(‘000) | 9MCY11 | 9MCY12 | Chg. |
| Sales |
38,532,072 |
50,034,211 |
29.9% |
| COGS |
16,539,446 |
25,873,332 |
56,4% |
| Gross Profit |
21,992,626 |
24,160,879 |
9.9% |
| Dist. Cost |
3,253,082 |
3,852,090 |
18.4% |
| Other Expenses |
1,791,491 |
1,812,786 |
1.2% |
| EBIT |
16,948,053 |
18,496,003 |
9.1% |
| Finance Cost |
602,512 |
816,247 |
35.5% |
| Other Income |
4,392,572 |
2,841,960 |
-35.3% |
| PBT |
20,738,113 |
20,521,716 |
-1.0% |
| Tax |
6,903,179 |
6,729,000 |
-2.5% |
| PAT |
13,834,934 |
13,792,716 |
-0.3% |
| EPS |
10.87 |
10.84 |
-0.3% |
FFC – yielding CY12PE 7.5x – 8x wherein Standard Capital recommends Hold. FFC offers dividend yield of 12%pa.