Fauji Fertilizer Bin Qasim reports strong financial recovery in first half of 2024

Fauji Fertilizer Bin Qasim Limited, a leader in urea and DAP fertilizer production in Pakistan, has declared a profit after tax (PAT) of PKR 10.6 billion ($38.09 million) for January to June 2024. This result marks a substantial rebound from a PKR 4.9 billion ($17.6 million) loss recorded in the same period the previous year.

The turnaround, according to Brig (Retd) Khurram Shahzada, Company Secretary of FFBL, is attributed to economic stability, favorable foreign exchange rates, and increased international DAP margins. Notably, the company also benefited from improved gas supply and enhanced plant efficiency, particularly in the second quarter.

FFBL’s DAP sales surged to 351,000 metric tonnes, up from 274,000 metric tonnes in the previous year, while urea sales climbed to 216,000 metric tonnes from 180,000 metric tonnes. These increases have significantly influenced the company’s financial outcomes.

The management has lauded the government’s role in ensuring a more stable gas supply, which increased to 74% of the allocated volume during the reviewed period, up from 53% the year before. This support was crucial for boosting urea and DAP production.

Additionally, FFBL’s proactive capital management strategies led to a reduction in finance costs to PKR 2.1 billion ($7.54 million). However, selling and distribution expenses saw a 104% year-on-year increase to PKR 4.6 billion.

The company also commended the Government of Pakistan for continuing sales tax exemptions on urea and reducing the sales tax rate on DAP in the Finance Act 2024, actions that are expected to improve farm economics and promote balanced fertilizer usage. The sustainable future of the fertilizer sector hinges on a consistent gas supply, urging an optimization of indigenous gas allocation to maximize this critical natural resource, thereby enhancing food security and reducing the need for costly imports.

Fauji Fertilizer Bin Qasim continues to invest in its state-of-the-art granular urea and Di-Ammonium Phosphate (DAP) fertilizer manufacturing complex in Bin Qasim, Karachi, underscoring its commitment to innovation and growth in the sector.