Fauji Fertilizer Company Limited (FFC) reported consolidated earnings per share of PKR 58.44 for CY25, compared to earnings per share of PKR 66.30 in CY24. Furthermore, in 1QCY26, the company reported earnings per share of PKR 13.92, compared to earnings per share of PKR 12.23 in the same period last year (SPLY). FFC continues to sell urea at a significant discount to international prices.
While global urea prices have risen sharply to approximately PKR 14,000 per bag, FFC is currently selling at around PKR 4,400 per bag, effectively passing on a benefit of approximately USD 300 million to local farmers. The company has expanded its Sona Centers network from 100 to 246 outlets to ensure the availability of urea and DAP at prescribed prices, while also offering value added services such as soil and water testing to farmers.
The closure of the Strait of Hormuz has significantly disrupted the availability of key raw materials, particularly sulfur, which is a critical input in the production of phosphoric acid. Sulfur prices have surged sharply, and management is in close coordination with suppliers in Morocco to ensure continued availability. Management expects further increases in raw material, packaging, and freight costs due to ongoing inflationary pressures. During the first quarter, management confirmed receipt of PKR 5 bn in dividend income from Thar Energy Limited.
The PKR 1.06 billion in discounts recorded in 1Q were related to pending orders carried forward from December of the previous year. Regarding the consortium led by Arif Habib exercising a call option for a 25% stake, management clarified that FFC’s shareholding will remain unchanged at 34%.
Management has scheduled a turnaround for one of its urea plants in the third quarter, which is expected to last approximately 15 days. Regarding the pass through of higher diesel costs and inflation to farmers, management stated that the full impact has not yet been passed on, as the company remains cautious and is closely monitoring affordability conditions.
Management estimated that gas suspensions of over 1.5 months at FFBL’s plant resulted in a production loss of approximately 50,000 tons. FFC’s relatively high inventory levels are expected to mitigate the impact of these production disruptions. The fertilizer industry is undergoing a transition toward gas supply from Mari, with ongoing arrangements to ensure stable supply across plants. However, management indicated that this transition process will take time before reaching full stability.
Important Disclosures
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