KARACHI: Fauji Fertilizer Company reported an unconsolidated profit of Rs15.9 billion for the fourth quarter of 2025, translating into earnings per share of Rs11.2, up 12 per cent year-on-year (YoY) but down 17 per cent quarter-on-quarter (QoQ), with results falling short of industry expectations. According to Topline Securities, weaker-than-expected gross margins weighed on quarterly performance.
Gross margins stood at 25.2 per cent in the fourth quarter, compared with 25.9 per cent a year earlier and 30.8 per cent in the previous quarter. The brokerage attributed the decline to an estimated Rs8-9 billion impairment booked on sales tax receivables.
Other income fell 21 per cent YoY and 14 per cent QoQ to Rs5.4 billion, largely due to the absence of dividend income from energy businesses. For the full year, other income rose 13 per cent to Rs39.8 billion.
Quarterly net sales increased 18 per cent from the previous quarter and remained flat year on year at Rs149.7 billion, supported by higher fertiliser offtake as urea recorded an all-time monthly sales high in December. Full-year sales reached Rs432 billion, up 16 per cent from 2024.
Distribution expenses declined 14 per cent YoY but edged up 4.0 per cent QoQ to Rs8.9 billion. Finance costs remained steady at Rs1.6 billion during the quarter, taking the full-year figure to Rs6.5 billion. Tax expense stood at Rs13.8 billion, translating into an effective tax rate of 47 per cent.
For the full year 2025, the company posted earnings of Rs73.5 billion, or Rs51.69 per share, up 14 per cent year on year. FFC announced an annual cash dividend of Rs8.50 per share, bringing total 2025 payouts to Rs 37 per share, with a payout ratio of 72 per cent, lower than last year’s 80 per cent. The stock is currently trading at a 2026 estimated price-to-earnings ratio of 10.8 times with a dividend yield of 7.0 per cent.
