Fauji Fertilizer Company (FFC): Merger Boost Lifts Earnings

Fauji Fertilizer Company (FFC) is expected to post a net profit of Rs17.5 billion in the second quarter of 2025 (April–June). That’s a solid 12% increase from last year, showing that the company is back on a growth path.

What’s driving this growth?

• Revenue surged 44% year-over-year to Rs82 billion.
• The major boost came from the merger with FFBL, which brought DAP sales directly under FFC. This helped balance the decline in urea sales.
• Gross margins rose to 32%, up from 30% last year, despite lower urea prices.
• Other income increased by 50%, driven by higher dividends from investments like Askari Bank and other subsidiaries.

What’s holding them back?

• Urea sales dropped by 19% YoY to 585,000 tons. But this decline was expected since last year’s numbers were inflated due to EFERT’s temporary plant shutdown.
• The silver lining is that sales improved 9% compared to the previous quarter, showing a healthy recovery.

Dividends?

Yes! A Rs9 per share cash dividend is likely, taking the total for the first half of 2025 to Rs16/share, a strong signal of confidence from the company.

Finance costs dropped 47% YoY, thanks to declining interest rates and lower borrowing levels. That’s more money staying in the company.

Outlook:

With better margins, smart cost management, and added strength from the FFBL merger, FFC is well-positioned for the rest of the year, even if fertilizer prices remain soft. The company’s focus on efficiency and diversified income streams makes it a solid player in the sector.

⚠️ 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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