Fatima Fertilizer maintains entity rating

July 24, 2025 (MLN): The Pakistan Credit Rating Agency Ltd. (PACRA) has maintained the entity ratings of Fatima Fertilizer Company Limited (PSX:FATIMA) at “AA+” for the long term and “A1+” for the short term, with a stable outlook, according to the latest press release issued by the rating agency.

FATIMA continues to demonstrate its strategic importance in Pakistan’s fertilizer sector, operating within an oligopolistic market structure.

The ratings reflect the company’s solid business fundamentals, robust governance practices, and strong sponsor strength.

Over the past two decades, FATIMA  has sustained operational growth and enhanced efficiency through consistent capital investments and ongoing BMR (Balancing, Modernization, and Replacement) initiatives.

These efforts have been reinforced by a comprehensive governance framework, strong internal controls, and an experienced management team.

The company remains focused on market-driven strategies, adopting several measures to diversify its portfolio and expand its footprint.

Recent initiatives include joining the United Nations Development Programme’s SDG Impact Framework and advancing agricultural modernization projects such as the Sarsabz Agri Mart.

Operationally, FATIMA has undertaken significant restructuring steps, including the transfer of its Sheikhupura plant operations to Fatimafert Limited, a wholly owned subsidiary. This move is expected to streamline production capabilities and unlock synergies.

During CY24, FATIMA’s topline reached Rs238.42 billion, reflecting a modest growth of 2.4% compared to Rs232.75bn in CY23, primarily driven by firm product pricing throughout the period. The company operates with a total nameplate capacity of 2.57 million metric tons, with NP contributing 45% to total revenue, followed by Urea at 29%, CAN at 19%, and DAP at 6%.

In 1QCY25, revenue declined to Rs42.95bn (1QCY24: Rs65.25bn), mainly due to a contraction in fertilizer offtake continuing the downward trend observed in CY24. Inventory levels increased by the end of March; however, this buildup aligns with industry norms.

Despite softer volumes, FATIMA  sustained healthy margins and strong profitability, driven by efficient operational management, cost optimization initiatives, and improved product pricing.

The company has also advanced its renewable energy agenda by installing a 3MW solar power plant at its Sadiqabad facility and a 1.25MW plant at its Sheikhupura site.

FATIMA maintains a balanced capital structure, marked by healthy coverage ratios, adequate liquidity, and manageable leverage aligned with industry norms.

The company’s strategic alignment with both Fatima Group and Arif Habib Group enhances its financial flexibility and market positioning.

Looking ahead, FATIMA’s ability to sustain margins, optimize working capital, and execute its operational integration plan will be critical to maintaining its credit profile.

The stable outlook reflects confidence in the company’s resilience and its capacity to continue delivering steady performance within a competitive fertilizer market.

FATIMA is jointly owned by two prominent business conglomerates Fatima Group and Arif Habib Group. The company manufactures and markets a diversified portfolio of fertilizers, including CAN, NP, and DAP, as well as various specialty products.

Its integrated operations, experienced leadership, and strong sponsor support underpin its strategic role in meeting Pakistan’s agricultural input requirements.

Copyright Mettis Link News