Karachi: Fauji Fertilizer Company (FFC) held a Corporate Briefing Session to discuss its financial performance and future outlook for the first quarter of 2026, highlighting significant growth in market share despite challenges in exports. The company reported a rise in urea and DAP sales, while also addressing impacts from the closure of the Strait of Hormuz and gas supply disruptions.
According to JS Global, FFC noted a substantial decrease in sulphur and urea exports by 50% and 34% respectively due to the closure of the Strait of Hormuz, a critical passage for Middle East fertilizer exports. Despite a reported production loss of 100,000 tons of fertilizers due to disrupted gas supplies, initial high inventory levels mitigated the impact. Operations have mostly resumed with limited gas supply, and efforts to shift towards the Mari gas network are ongoing.
In financial developments, FFC plans to borrow funds to finance a deal involving Pakistan International Airlines, maintaining a 34% shareholding in the consortium. The company received dividends totaling Rs7 billion from Thar Energy and Askari Bank and anticipates continued strength in these areas. FFC also withdrew trade discounts in the first quarter, projecting no discounts in future periods.
The overall urea market contracted by 6%, yet FFC increased its market share from 49% to 58%, with urea sales growing 12% year-on-year. The company’s DAP market share also improved, doubling sales to 181,000 tons. Farmer engagement through the Sona Centre network expanded, with registered farmers now covering approximately 1.95 million acres of farmland.
FFC's core net profit for the quarter was Rs17.4 billion, with a significant portion derived from core fertilizer operations. The company declared a first interim cash dividend of Rs8.5 per share. Investors are advised to maintain a buy stance on FFC, which is trading at an estimated 2026 P/E of 8.6x and offers a dividend yield of 8%.
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