Karachi: Fauji Fertilizer Company Ltd. (FFC) announced its fourth quarter financial results for the calendar year 2025, revealing earnings that fell short of expectations due to increased costs of goods sold and higher taxation. The company reported standalone earnings of 15.9 billion Pakistani Rupees (EPS: PkR11.2), marking a 15 percent year-over-year increase from 13.8 billion Pakistani Rupees (EPS: PkR9.7) in the same period last year. FFC also declared a cash dividend of PkR8.5 per share.
According to AKD Securities Limited, the company's revenue remained steady at 149 billion Pakistani Rupees year-over-year, as an increase in urea volumes was counterbalanced by a decline in DAP sales and discounts on urea. Gross margins contracted slightly to 25.2 percent from 25.7 percent in the same period last year, potentially due to heightened repair and maintenance costs associated with annual turnarounds at Port Qasim and Plant-II.
Distribution expenses decreased by 14 percent year-over-year to 8.9 billion Pakistani Rupees, primarily due to a decline in DAP sales volume. Other income fell by 20 percent year-over-year, influenced by lower interest rates and reduced short-term investments. Finance costs marginally decreased by 1 percent year-over-year to 1.6 billion Pakistani Rupees, despite an increase in outstanding debt, thanks to a lower policy rate.
For the full calendar year 2025, the company's earnings rose to 73.6 billion Pakistani Rupees, a 14 percent year-over-year increase, largely driven by higher sales and dividend income. AKD Securities Limited maintains a 'BUY' stance on FFC with a target price of 801 Pakistani Rupees per share for December 2026. This positive outlook is based on factors such as reduced gas costs supporting robust margins, a recovery in nutrient offtakes amid improving farm economics, consistent dividend income from power and banking subsidiaries, and enhanced performance in the food business through increased market penetration and cost efficiencies.
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