Fatima Fertilizer retains entity rating of AA+

August 12, 2025 (MLN): VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Fatima Fertilizer Company Limited (PSX: FATIMA) at AA+/A1+ with a Stable outlook.

The previous rating action was stated on September 3, 2024.

The long-term rating of AA+ shows high credit quality, strong protection factors, and modest risk that may vary slightly with economic conditions.

The short-term rating of A1+ indicates the strongest likelihood of timely repayment of short-term obligations, supported by outstanding liquidity.

Established in 2003 as a joint venture between the Fatima Group and the Arif Habib Group, FATIMA is a publicly listed company and one of Pakistan’s leading fertilizer producers. Headquartered in Lahore, the company manufactures, markets, imports, and exports fertilizers and chemicals.

Its plants in Sadiqabad, Sheikhupura, and Multan have a combined annual capacity of 2.57 million metric tons, producing Urea, Calcium Ammonium Nitrate (CAN), and Nitro Phosphate (NP) fertilizers.

VIS noted that the ratings of FATIMA’s strong position in the domestic fertilizer sector, backed by significant operational capacity and an extensive nationwide distribution network.

While overall sales volumes declined, revenue grew in CY24 due to higher product prices. However, net sales fell in the first quarter of CY25 owing to a delayed Kharif season.

Despite this, profit margins improved significantly during the review period, primarily due to higher selling prices.

Debt servicing coverage remained sound, though it decreased in 1QCY25 because of higher taxation and debt repayments.

Borrowings increased to meet higher working capital needs and fund investments, resulting in slightly higher leverage. Nevertheless, a robust liquid asset portfolio provided substantial cover against borrowings, mitigating financial risk.

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