KARACHI: Fauji Fertiliser Bin Qasim (FFBL) announced results for the first half of the year (1H2014), posting profit after tax (PAT) at Rs802 million, translating into earnings per share (eps) at Re0.86.

The earnings were down by 56 per cent over the PAT at Rs1,817m (EPS:Rs1.95) during the same period last year. The board announced interim cash dividend at Re1 per share. The FFBL stock at the market slipped by 39 paisa to Rs39.53.

Imran Ahmed Patel, analyst at Global Securities, commented that the earnings slumped due to higher gas curtailment, leading to a decline in production and sale of fertiliser (both urea and DAP); the company’s inability to pass through the impact of rising cost on account of increase in cess from Jan 1, 2014, and depressed primary margins on DAP.

The analyst said that results announced were lower than expectations mainly due to lower than expected other income, which amounted to Rs230m.

Another analyst pointed out that FFBL revenue decreased by 22pc in first half under review to Rs15.8bn as against Rs20.1bn in the same period last year.

“Gas curtailment in 1Q2014, lower DAP and Urea off take in 1H2014 and hike in Gas Infrastructure Development Cess (GIDC) on feedstock were the key reasons behind lower revenues,” analysts stated.

During 2Q2014, the company revenue declined by 22pc to Rs9.7bn compared to Rs12.4bn in 2Q2013.

Published in Dawn, July 24th, 2014