– FFBL announced its result for 2QCY20 earlier today, posting a loss of PKR 1,160mn (EPS: PKR -1.24) compared with a loss of PKR 84mn (EPS: PKR -0.09) recorded during 2QCY19. Cumulative loss for 1HCY20 stood at PKR 4,207mn (EPS: PKR -4.50) against a loss of PKR 1,951mn (EPS: PKR -2.09) posted during 1HCY19.

– FFBL’s revenues grew by 59% QoQ to PKR 15,224mn during 2QCY20 primarily on account of a 2.5x QoQ increase in urea off-take and a 31% QoQ increase in DAP off-take. Potential increase in revenues, however, was limited by the ~PKR 300/bag decline in urea prices post the removal of GIDC.

– FFBL’s gross margins grew to 13% during 2QCY20 compared with -6% the preceding quarter largely due to recovering off-take. Moreover, the removal of GIDC from its gas supply likely supported margins on the company’s DAP sales during the period.

– The company’s financial charges eased by 20% QoQ to PKR 1,208mn primarily due to lower interest rates, which had declined to 7% by the end of 2QCY20.

– FFBL’s other income surged by 4.3x QoQ to PKR 1,372mn during 2QCY20 largely on account of an expected increase in dividend income from its subsidiaries, particularly PMP.

– Other expenses for FFBL ballooned by 7.2x QoQ to PKR 1,391 during 2QCY20 likely due to impairment charges on its investments. Note that based on the financials provided by the company via its notice, long-term investments have been impaired down to PKR 24.96bn, a decline of PKR 1.22bn. In addition, the company may likely have incurred exchange losses on it foreign-denominated payables, further contributing towards the increase.

Please find attached the detailed report.


Regards,
Kasb Research
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