• Fatima Fertilizer Company Limited posted CY14 earnings of PkR9.258bn (EPS PkR4.41), up 15%YoY from PkR8.02bn (EPS PkR3.82) in CY13. The earnings came in line with our expectation of EPS PkR4.35.
  • The announcement was accompanied by a cash dividend of PkR2.75/share which was below our expectation of PkR3/sh.
  • Stable sales volume along with slight uptick in CAN and UREA prices has culminated into 8%YoY increase in company’s topline.
  • Besides, Fatima remained shielded from GIDC on its feedstock which helped keep the costs in check. Furthermore, reducing phosphoric rock prices served to augment the margins as its gross profitability rose 9%YoY to PkR21.4bn. Consequently, the gross margins of the company remained stable at 59%.
  • Other income of the company showed a significant rise of 2.12x times on account of higher cash balance.
  • During 4QCY14, earnings stood at PkR2.82bn (EPS: PkR1.34) compared to PkR2.22bn (EPS: 1.06) recorded in 4QCY13, up 27%YoY.
  • At current levels, we maintain “Hold” on Fatima with TP of PkR40/sh.