Press Release

VIS Reaffirms Entity Ratings of Fatima Fertilizer Company Limited

Karachi, August 11, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Fatima Fertilizer Company Limited (‘FATIMA’ or ‘the Company’) at ‘AA+/A1+’ (Double A Plus/A One Plus). The medium to long-term rating of ‘AA+’ denotes high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. The short-term rating of ‘A1+’ signifies strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned rating is Stable. The previous rating action was announced on September 03, 2024.

Established in 2003 as a joint venture between Fatima Group and Arif Habib Group, FATIMA is a public listed company and a leading producer of fertilizers. Headquartered in Lahore, it manufactures, sells, imports, and exports fertilizers and chemicals. The combined capacity of the its plants located at Sadiqabad, Sheikhupura, and Multan stands at 2.57 million metric tons per annum, and the product range include Urea, CAN and NP fertilizers.

The assigned ratings reflect the Company's strong position in Pakistan's fertilizer sector, supported by significant operating capacity and a nationwide distribution network. Despite a decrease in overall sales volume, FATIMA’s revenue witnessed growth in CY24 driven by higher product prices. However, net sales declined in 1QCY25 due to a delayed Kharif season. Nevertheless, profit margins improved significantly during the review period, emanating primarily from higher product prices. Meanwhile, debt servicing coverage ratios, though sound overall, decreased in 1QCY25 on account of higher incidence of taxation and debt repayments. To support higher working capital requirements and fund investments, borrowings increased, leading to slightly elevated leverage ratios. However, a robust portfolio of liquid assets provided substantial cover against these borrowings, largely mitigating financial risk. Looking ahead, the ratings will hinge on maintaining operational efficiencies, improving market presence, recovery in sales volumes, while maintaining sound coverages and a conservative balance sheet.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright August 11, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.