Full transcript of “FFC Fundamental Analysis 2025 | FFC psx”. Click a timestamp to open the video at that moment. Need another video? Use the YouTube transcript generator.
0:00 Hello ji this is and welcome back to Trade Vi YouTube channel. Today specifically we will be discussing 4G fertilizer company and looking at its financial report, whether that report is good or bad, has there been any improvement in it, has there been no improvement in it, are there declining things in it, is its cash flow better, is its EPS better, have its margins increased and what is the future outlook of FFC, we will be discussing these things today. Apart from this, we will be discussing its technicalities. Plus we will also be discussing to what extent the news about Sharia compliance of FFC is valid and by when will it become Sharia compliant. Well, now let us discuss its
0:47 performance. So FFC has published its financial result of quarter ended June 30th today and today is 29th of July. The first question of any person who invests in FFC is, how much dividend did it give? So it has given a dividend of ₹ 12 which is 120% of its par value. Majeed, if we add the previous dividend of ₹7 to this, then it has given a total dividend of ₹19 till now. Next, let's talk about its operational performance. Then we will read its consolidated statements. Talking about the operational performance, the first thing it has mentioned is
1:34 that due to urea off take by the industry, there has been a decline of 23% in urea. But Depp's sales have decreased by 18%. Apart from this FFC achieves 43% of the total urea production by the industry. SSC has achieved 43% of the total urea production in the industry. Which is a good thing that its market share is increasing. But held only 26% of the inventory at the close period. And since the offtake of fertilizers is going on, it is obvious that the biggest risk in offtake is
2:20 how much inventory is left in the company which is producing fertilizers etc. and it is obvious that if that entry remains for a long time then it will become wasted. So they have mentioned here that 26% inventory is left at the close of the period due to its strong market outreach, which proves that our market outreach is growing and is strong. Apart from this, he also mentioned here that deep production by the company was registered 57% of the total production by the industry. Its DAP production is 57% and here he has mentioned that its urea production is 43% of the market. This means that Depp has a higher market share. Further, it mentioned that
3:06 while closing stock stood at 40% depth of take was 288,000 tonnes with the market share of 64%. Here he has mentioned that the inventory that he still has is 40%. After this, if we talk about the financial performance, they have presented some reasons here and by the way, when we look at EPS etc., we will see it better. But still let me tell you here. Here he mentioned that FFC attends an aggregate revenue of 155 billion compared to PKR 16 billion during the same period last year. If compared to last year, its revenue has increased and it closed at 155 billion
3:51 and last year it was 166 billion. The Increase in Attributable. The increase is attributable to the integration of revenues from marketing of Sona Dep and Sona Urea Granular. The revenue that they have earned from marketing is obvious, if the marketing happens then the sales increase. When sales increase, then revenue is generated and if we look at the turnover of this, which is the top line, then the sales increase is evidently seen in this. Well here he has said that the sales increase has happened in his Sona Dap and Urea Granular on which we had done marketing. However higher input costs at Port Qasim plants compress the
4:38 gross margin to 34% from 42% of the last year. If gross margins are computed in comparison to last year, their gross margin and gross profit have decreased. You can also see the decrees here. And the main reason given by him for this is that where is their costing done? These gross margins have decreased due to the costing imposed on the Port Qasim plants. Now here he has not mentioned specifically what the costing is for. We have read in fertilizers that whenever fertilizer is made, some things are used in it. The type of natural gas phosphate rock is used. Then you have potassium ores to use. Sulfur is used. Electricity is used. Fuel is used. There will
5:24 be some labour and maintenance will be done. Then there will be transportation. All these things are used here. But he did not mention here that what is the costing of this thing, we will get to know it better from its transmission report. After this he mentioned that their EPS has increased due to improved investment income of PKR 28 billion. Registered a significant increase which enabled the Company to earn a high net profitability of PKR 38.5 Billion which is an increase as compared to the PKR 26 Billion last year with an earnings per share EPS of ₹27.02. Now he has mentioned here that his other incomes have increased significantly by almost four times.
6:11 Due to which significant increase has been seen in its EPS here as well. So this is the main reason for their EPS increase. Apart from this, it is written here that when will this dividend be paid to you? It is written here that the names of the shareholders will be paid whose names will appear in the register of members on August 10, 2025 and your books will remain closed from 11th to 13th, which means that your declaration date, the dividend declaration date, is 10th of this August and the business day one day prior to that, so on 10th of
6:57 August you have a declaration date, the first business day after Friday, which is 8, becomes your record date and the Thursday before the record date becomes your ex-date and the day before the ex-date becomes your date of buying. So, if you want to pay dividend then you will have to buy its shares at least by 6th of August. So these things are mentioned here. Now let us go a little bit to its consolidated statement. A sorry to unconsolidated this is unconsolidated. Consolidated below. I would be looking at Unconsolidated rather than
7:43 Consolidated. Ok? Now in unconsolidated, I will only know about the company as to how it is performing. Ok? So here the top line has increased which we have also read above. What is the reason for its increase? He has told that your urea, your Sona Dep, here it is written Sona Dep and Urea Granular, Sona Urea Urea Granular, its top line has increased from the marketing done there, which is also showing to us. Now obviously when the top line increases, its distribution cost also increases. This is totally normal. But the thing which is not normal is the same thing which is not normal costing. That now your top line has not increased even two times but your costing has increased almost three
8:30 times. How is this possible? The reason for this has been given above, that whatever facilities they have in Port Qasim, have high costing. And even though I told you guys about it a while ago. He did not mention where it was installed. Or it is burning in natural gas. Which of your costs has increased? It is about your raw materials, phosphate raw , sulphur etc. Has costing been done ? Well, we will see when the report comes. Eventually here you can see all the other things like finance cost etc. from here. The main thing in other income is that other income has increased four times. Because of which its eventual EPS has come out to be positive. Meaning, it has turned out better than the previous one.
9:15 Ok. So we have found out the major reason for its increase. Currently offtake is going on in the market. So because of offtake, inventory is getting built up and the inventory is lying there. But rather than this fact its results are still very good. Now if we talk a little about cash flow, one disappointing thing in cash flow is that their operating cash flow is decreasing. Its operating cash flow was positive last year. Its operating cash flow is negative this year. Even here he did not mention anything as to why his cash flow is negative. Again, for this we will have to go into the details in note number 15 of its transmission report and
10:00 we will be able to do that only when its transmission report will be published. So, till the end of the year last year, there was this much cash lying around. But why was it not transferred to the next year? As far as this thing is concerned, even if it has been transferred to the next year, we do not have the data on where it has been used. Well take it all out here and eventually your major upper cash is the negative of the operations. So everything else has to be negative. So this is the negative you have. Cash row investing activities you have are positive and was not negative last year. Your contribution in this is that they have disposed of some plant equipment etc. Some income has come from there and the major income has come through dividends. The
10:46 dividends that they have received have come from their subsidiaries and also through some other investments that they have made. This dividend has been received. So again it is positive and a good sign. Talking about cash flow for financing activities, the major expenses are your repayments , loan repayments and dividend payers. Dividend is very good for share holders. So we will consider this positively and we will also consider the repayments positively. So eventually you have got positive cash savings from financing activities as well. Sorry it has come out negative. Which is fine in this case. You still have positive net cash, which is a sign that your company is managing its cash
11:35 properly and is not letting the cash go out of its reach. There is also more cash lying in the banks as compared to last year. Which again is a good thing. Eventually the only concern I have is where your operating cash flow has gone. Now let's look a little bit at FFC technically. The FFC that we have closed today closed at 466. And right now, do we feel our potential in this or not? I had also made a video a day or two ago that we will not make a new entry until FFC crosses 482. Either it should cross 482 or again it should
12:22 come in the zone of 427 to 4450 then we can buy it and then we can keep its targets which have defined its recent high which is 485 and then you can take its targets of 500 plus. Simple thing is that no bullish or bearish divergences are seen in it and we have also seen good volumes in the past few days. Now it should not be like this that volumes should not increase and prices should not decrease. Otherwise you will see bearish volume divergence. So this was pretty much about today's video. Do tell us in the description how you liked the video and if you like such videos then do mention it in the comments. Insha Allah we will make such videos on different scripts also. Please give brother permission for next time. Remember me in your prayers. We have two free
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