ISLAMABAD-Fauji Fertilizer Company Limited (FFC) announced its financial results for the year ended December 31, 2022 in its Board of Directors meeting held the other day.
The year 2022 was full of challenges ranging from socioeconomic, geopolitical, governmental and environmental factors. The year witnessed galloping inflation, double digit interest rates and sharp devaluation of Pak rupee besides heavy floods during second half of the year, negatively impacting costs of the company. The profitability was further impacted by the levy of super-tax resulting in an effective tax rate of over 40%, besides the exemption of output GST.
Efficient treasury management and increased dividend payout by associated companies resulted in highest-ever other income of Rs 14.4 billion compared to Rs 7.9 billion last year. This enabled the company to achieve a profitability of Rs 20 billion (despite a supertax levy of Rs 5 billion) with an EPS of Rs 15.76 compared to Rs 17.21 last year. The dollarized profitability of the Company however declined by 29% to USD 97 million compared to USD 137 million last year. As we step into 2023, the acute shortage of foreign currency reserves in the country pose severe challenges towards import of essential materials, spares, chemicals and other inputs required for maintaining urea production levels.
In view of declining gas pressures, the company along with other fertilizer manufacturers and the gas supplier has undertaken gas Pressure Enhancement Facility (PEF) project which involves significant capital outlay and is essential for sustained fertilizer production. Therefore, availability of foreign exchange is critical for timely implementation of the sustainability project and continued plant operations. The company also declared the final dividend of Rs 3.15 per share, with an aggregate distribution of Rs 12.13 per share for the year 2022.