VIS reaffirms Fatima Fertilizer’s long-term entity rating at AA+

October 19, 2026 (MLN): Fatima Fertilizer Company Limited (PSX:FATIMA) has had its entity ratings reaffirmed at ‘AA+/A1+’ with a stable outlook, according to VIS Credit Rating Company Limited (VIS).

The medium to long-term rating of ‘AA+’ reflects 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, backed by outstanding liquidity.

The previous rating action by VIS took place on August 11, 2025.

VIS said the ratings reflect FATIMA’s strong position in the domestic fertilizer sector, supported by a diversified product range and an established market presence, particularly in Calcium Ammonium Nitrate (CAN) and Nitro Phosphate (NP), along with its continued presence in Urea.

On the financial side, VIS said the risk profile remains conservative, supported by a sizeable equity base, lower debt at end-1HCY26 and adequate liquidity.

Profitability stayed resilient on a favorable product mix and pricing.

Although the funding mix has moved towards short-term borrowings, the company continues to hold substantial liquid assets relative to its debt obligations, while its diversified investment portfolio adds to financial flexibility.

VIS added that coverage metrics moderated following the change in operating perimeter and the associated earnings base.

The reduction in debt supported the financial risk profile, but lower funds from operations (FFO) weakened the FFO-to-total debt ratio.

Even so, the overall financial profile remains backed by a conservative capitalization profile and a strong asset base.

Looking ahead, VIS expects continued cash flow generation and a prudent debt profile to remain supportive of the ratings.

FATIMA is a joint venture between the Fatima Group and Arif Habib Group. Headquartered in Lahore, it is engaged in manufacturing, buying, selling, importing and exporting fertilizers and chemicals. It produces Ammonia and Nitric Acid as intermediate products, while its fertilizer products include Urea, CAN and NP.

Its marketed brands include Sarsabz Nitrophos, Sarsabz CAN, Sarsabz and Bubbershер Urea, and Sarsabz and Bubbershер DAP. The company runs three plants across Punjab with a combined nameplate capacity of around 2.57 million MT per annum.

The rating agency noted that the company’s operating perimeter changed after the Sheikhupura plant was transferred to Fatimafert Limited effective July 1, 2024, followed by the transfer of the Multan plant to Pakarab Fertilizers Limited effective January 1, 2025.

Both plants were moved from property, plant and equipment (PPE) to long-term investments as wholly owned subsidiaries.

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