FFC earnings preview: lower sales, but solid dividend expected
Fauji Fertilizer Company (FFC), one of Pakistan’s leading fertilizer producers, is expected to post profits of PKR 15.5 billion in the second quarter of 2025. This translates to earnings per share (EPS) of PKR 10.9.
While this is a 29% drop compared to the same quarter last year, it’s still a strong performance, and here’s what’s driving the numbers.
Why did earnings fall?
- Lower Urea Sales
FFC sold 585,000 tons of urea in the quarter, which is 24% less than last year. This decline in sales volume had a direct impact on revenue and profit. - Reduced Gross Margins
FFC’s profit margins are expected to shrink by 9 percentage points year-over-year. A major reason for this is the higher share of urea sales coming from its lower-margin subsidiary, FFBL. - Drop in Other Income
The company usually earns income from its investments, like dividends from Askari Bank (AKBL). But this quarter, there was no such dividend, which also hurt the bottom line.
What’s still positive?
- Quarter-on-Quarter Growth
Compared to the previous quarter (1QCY25), earnings are expected to rise by 17% thanks to better sales and lower costs. - Strong DAP Sales
FFC sold 199,000 tons of DAP in the quarter, more than double what it sold in the last quarter. - Lower Finance Costs
With interest rates falling and debt levels decreasing, FFC’s finance cost is expected to drop by 47% year-on-year.
What about dividends?
Despite the profit dip, FFC is expected to announce a cash dividend of PKR 8.5 per share, a solid return for investors.
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Quick look at FFC’s sales volumes
| Product | 2QCY25 | 2QCY24 | YoY Change | 1QCY25 | QoQ Change |
|---|---|---|---|---|---|
| Urea | 585kt | 771kt | ↓ 24% | 538kt | ↑ 9% |
| DAP | 199kt | 199kt | 0% | 88kt | ↑ 125% |
Summary for investors
- Profits are lower than last year, mainly due to lower urea sales and missing dividend income.
- But quarter-on-quarter improvement and higher DAP sales show positive signs.
- Investors can look forward to a healthy PKR 8.5/share dividend.
- FFC remains a key player in Pakistan’s fertilizer market and could benefit as farm activity picks up.
Source: Insight Securities (Private) Limited
⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →
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