Fauji Fertilizer Company Limited (PSX: FFC) has reported a strong financial performance for the first half of CY2026, posting a net profit of Rs. 41.8 billion with earnings per share (EPS) of Rs. 29.10, driven by higher fertilizer sales, stronger margins, and increased investment income.
The company also announced a cash dividend of Rs. 14.50 per share for the second quarter of 2026, significantly higher than the Rs. 8.50 per share declared in the previous quarter, reflecting confidence in its financial position and future outlook.
Quarterly Profit Jumps 39%
For the second quarter of CY2026, FFC recorded a net profit of Rs. 24.4 billion, translating into EPS of Rs. 16.93. This represents a 39 percent year-on-year (YoY) increase compared to the corresponding period last year.
The impressive earnings growth was fueled by stronger fertilizer sales, improved pricing, higher investment returns, and better margins across key product segments.
Sales Cross Rs. 104 Billion
FFC’s quarterly net sales climbed 14 percent YoY to Rs. 104.3 billion.
According to Arif Habib Limited, the increase was mainly supported by a 42 percent rise in prilled urea sales and a 17 percent increase in granular urea volumes.
However, overall sales growth was partially offset by a 35 percent decline in Sona DAP offtake, as elevated DAP prices reduced market demand.
The company also strengthened its position in Pakistan’s fertilizer market, with its average urea market share increasing to 55 percent in June 2026, compared to 47 percent during the same month last year. Analysts attributed this gain largely to relatively weaker sales by competing fertilizer manufacturer EFERT.
Higher Urea Prices Boost Earnings
FFC further enhanced profitability by increasing the price of Sona Urea by Rs. 100 per bag in April after ending promotional discounts offered earlier in the year.
At the same time, international fertilizer market conditions remained favorable.
The company’s DAP-phosphoric acid margins expanded sharply to $279 per ton, compared to $96 per ton during the previous quarter.
Additionally, international DAP prices rose 26 percent quarter-on-quarter (QoQ), providing another boost to overall profitability.
Healthy Profit Margins Maintained
FFC maintained strong operating efficiency during the quarter.
Its gross profit margin stood at 33.1 percent, slightly lower than 33.7 percent recorded during the same quarter last year but notably higher than the 30.6 percent reported in the previous quarter.
The improvement reflects stronger pricing, improved product mix, and continued cost management despite market volatility.
Investment Income Strengthens Bottom Line
One of the biggest contributors to FFC’s earnings was a sharp increase in other income, which surged to Rs. 17.6 billion during the quarter.
The company received approximately Rs. 4.4 billion from its investment in Askari Bank Limited (AKBL), including a Rs. 1.9 billion dividend.
Meanwhile, another Rs. 11.3 billion came from investments in TEL, FPCL, power assets, and PMP, significantly strengthening overall profitability.
Finance Costs Also Increase
Despite the strong financial results, FFC’s finance costs increased by 24 percent YoY to Rs. 2.1 billion.
The rise was primarily due to higher borrowing levels.
The company’s borrowings reached Rs. 104 billion, compared to Rs. 61 billion a year earlier.
According to the company, the additional financing was mainly used to fund investments in Pakistan International Airlines (PIA) and Pakistan Engineering Company (PEF).
Outlook
FFC’s latest financial results highlight the company’s continued resilience despite changing market conditions. Higher fertilizer demand, improved pricing, expanding margins, and strong investment income helped deliver another profitable quarter while enabling the company to reward shareholders with a significantly higher dividend.
Analysts believe fertilizer demand, international commodity prices, and market competition will remain key factors influencing FFC’s performance during the second half of 2026.
Also read: FFC Announces financial results of First Quarter 2026
