Fauji Fertilizer Company posts record Rs25.2bn quarterly profit

KARACHI: Fauji Fertilizer Company (FFC) reported its highest-ever quarterly unconsolidated profit of Rs25.2 billion (earnings per share (ESP): Rs17.7) for the second quarter of 2025 (2Q2025), showing a 62 per cent increase year-on-year (YoY) and a 90 per cent increase quarter-on-quarter (QoQ).

The company’s profit for the first half of 2025 (1H2025) rose to Rs38.5 billion (EPS: Rs27.02), up 47 per cent YoY, according to a report by Topline Securities issued on Tuesday.

The result surpassed market expectations, primarily due to significantly higher-than-anticipated other income.

Other income for 2Q2025 came in at Rs20.7 billion — well above Topline’s estimate of Rs14 billion.

According to the report, the company received Rs9 billion in dividend income from its energy businesses and Rs7 billion from PMP, while the remaining amount comprised interest income on cash and cash equivalents.

Net sales surged to Rs92 billion in 2Q2025, showing a 61 per cent increase YoY and 44 per cent increase QoQ. This rise was attributed to higher offtakes of Urea and DAP, along with stronger pricing.

Gross margins stood at 33.7 per cent in 2Q2025, compared to 54.5 per cent in 2Q2024 and 35.6 per cent in 1Q2025. Topline had estimated gross margins at 33.6 per cent for the quarter.

Distribution expenses dropped to Rs8.7 billion — a 57 per cent decline YoY and 43 per cent decline QoQ — due to increased offtake volumes and easing inflationary pressures.

Finance costs rose to Rs1.7 billion, reflecting an increase of 24 per cent YoY and 1 per cent QoQ, mainly on account of higher borrowings.

Tax expenses were reported at Rs13.2 billion in 2Q2025, translating to an effective tax rate of 34 per cent, compared to Rs11.6 billion and a 42.7 per cent effective rate in the same period last year.

Alongside the financial results, the company declared a second interim cash dividend of Rs12 per share — higher than both market and analyst expectations.

This brings the total dividend payout for 1H2025 to Rs19 per share, with a payout ratio of 70 per cent.