FFBL to book exchange loss on Rs24 Billion overdue to Pakistan Maroc Phosphore

Islamabad 30, March 2022: Fauji Fertilizer Bin Qasim Limited will book exchange loss of above Rs500 million on its balance payable to Pakistan Maroc Phosphore which is related party of the company and company has with led Rs24 billion balance of the company due to 75 days credit offered by is phosphoric acid supplier.
At the end of December 2021 State Bank of Pakistan reported USD/PKR exchange rate of PKR178.16/USD which is now above PKR182/USD in interbank. In 2021 company booked exchange loss of PKR 1.5 Billion as Pak Rupee continued to depreciate against USD throughout the year.
In 2021 the Company ramped up its production and achieved DAP production at 790 KT representing 7% increase to previous year. On the other hand, Urea production being highly dependent on natural gas supply/ availability, reduced by 10% to 501 KT. Natural gas supplies during the year observed 9 % reduction from 19,507 MMSCF to 17,905 MMSCF.
Meanwhile, the plant successfully achieved 22.48 Million Safe Man-Hours without any Loss Time Injury (LTI) as Company remains committed to Healthy and Safe work environment.
Domestic DAP market is estimated at 1,885 KT with 14% decline as compared to previous year, whereas the Company successfully increased its DAP market share by 1% to 42%. Domestic Urea market is estimated at 6,343 KT with a slight increase of 5 % as compared to previous year. The Company’s market share in Urea market observed slight reduction of 1% to 8% as production decreased due to lesser natural gas supplies during the year.
FFBL successfully completed sale of its equity investment in Foundation Wind Energy-I Limited and Foundation Wind Energy-II Limited to Fauji Fertilizer Company Limited at a gain of PKR 2.8 Billion realizing proceeds of PKR 5.3 Billion. FFBL also restructured its investment in Fauji Foods Limited through conversion of loan into equity. Moreover, FFBL Foods Limited was successfully merged in FFBL. Accordingly, all assets and liabilities of FFBL Foods Limited were vested into FFBL effective 01 October 2021.
Amid surging fertilizer prices in domestic market, especially that of DAP, the Company managed to achieve revenue of PKR 110 Billion. Whereas, operational excellence coupled with reduction in finance cost and better returns from investments resulted in achieving net- profit of PKR 6.4 Billion (2020: PKR 2.2 Billion).
On the back drop of healthy cash generation and efficient working capital management, the Company significantly improved its capital structure. Moreover, the long-term credit rating of the Company was upgraded from A+ (single A plus) to AA- (double A minus), which signifies high credit quality and strong protection factors. FFBL’s short-term rating is A-1 (A minus one), which denotes high certainty of timely payments, excellent liquidity factors supported by good fundamental protection factors.
In the meantime, receivables from the Government continue to surge and stood at PKR 16 Billion comprising GST refundable at PKR 13 Billion and subsidy receivable at PKR 3 Billion since 2016.
Our subsidiaries also performed well and delivered better results. FFBL Power Company Limited delivered steady profits of PKR 3.63 Billion (2020: 3.80 Billion). Fauji Foods Limited posted a topline growth of 16.45 % i.e. revenue increase from PKR 7.37 Billion to PKR 8.59 Billion in 2021, and managed to achieve PKR0.921 billion of gross profit (2020: PKR 0.062 billion) and posted significantly reduced net loss of PKR 1.29 Billion (2020: 3.06 Billion).
FML reported a loss of PKR 1 Billion (2020: PKR 1.5 Billion), representing a 33% reduction due to extensive optimization in operations. Pakistan Maroc Phosphor, S.A. , our associated Company, reported profit of USD 62 Million during nine months period ended September 2021 (2020: USD 18 Million).
FFBL is a purpose-oriented organization whose mission resonates with its people, intellectually and emotionally. Our people feel privileged and take pride in being associated with an organization which is leading in meeting the nutrition demands of our communities. In today’s transformed business environment where access to other resources is relatively easy, the scarcest form of capital is the human capital. Therefore, in order to ensure diverse, inclusive, energizing and thriving environment, we have embarked on a journey to transform our Human Capital function and are monitoring the developments with the rigor of no less than any other strategy.
Looking ahead, with Government focused on development of agriculture sector, increasing demand of agriculture produce and improving farm economics, we believe that FFBL is best positioned to continue feeding our communities and capitalize on opportunities.