LAHORE - With depressed urea offtake in the months of Aug-Sep due to the floods in the country, Fauji Fertilizer Company (FFC) posted lower than expected earnings of Rs7 billion in 9M2010, an increase of 6 percent annually. According to experts, higher urea prices along with increased dividend income from FFBL were major reasons for growth in the bottom line. FFC also announced a third interim dividend of Rs2 per share, taking the cumulative dividend per share for 2010 to Rs9.5. Despite lower offtake in the months of Aug-Sep and the ongoing gas curtailment issue, FFCs revenue grew by 11 percent to Rs28.5 billion in 9M2010. The jump in revenues is driven primarily by higher urea prices as urea offtake fell by 16 percent, coming in at 1.6mn tons compared to 1.9mn tons recorded in the same period last year. Average ex-factory urea prices in 9M2010 stood at Rs809 per bag as compared to Rs692 per bag in 9M2009, up 17 percent. Consequently, gross margins came in at 44.6 percent. Higher dividend income from FFBL of Rs1.9 billion (up 46 percent) helped the companys bottom line to sustain a growth despite rising distribution and other expenses. Distribution expenses stood at Rs2.9 billion, an increase of 24 percent from Rs2.3 billion last year, while increasing inflationary pressures caused other expenses to rise by 9 percentYoY to Rs975mn. As a result, FFC posted earnings of Rs7.0 billion (EPS: Rs10.35) compared to profits of Rs6.6 billion (EPS: Rs9.78) in 9M2009. Experts, now expect the company to post earnings of Rs9.7 billion (EPS: Rs14.27) compared to profits of Rs10.1 billion (EPS: Rs14.93) anticipated earlier.