Press Release

VIS Reaffirms Entity Ratings of Fatima Fertilizer Company Limited

Karachi, July 20, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Fatima Fertilizer Company Limited (‘FATIMA’ or ‘the Company’) at ‘AA+/A-1+’ (Double A Plus /A-One Plus). The medium to long-term rating of ‘AA+’ denotes high credit quality coupled with strong protection factors. Moreover, risk factors may vary slightly with possible changes in the economy. The short-term rating of ‘A-1+’ denotes highest certainty of timely payment, short-term liquidity including internal operating factors and/or access to alternative sources of funds, is outstanding and safety is just below risk-free GoP’s short term obligations. Outlook on the assigned rating is Stable. The previous rating action was announced on May 31, 2022.

The ratings assigned to FATIMA take into account low business risk profile of the fertilizer sector owing to non-cyclical nature of the industry, increasing significance of food security amidst developing economic situation across the world and consequent enhancement in the strategic importance of the fertilizer sector for the Country. On the other hand, business risk incorporates sensitivity of margins to gas & phosphate pricing and devaluation of local currency. In addition, ratings also factor in the Company’s strategic positioning as the leading player of the fertilizer sector in the domestic market. The ratings reflect sound financial risk profile of the Company marked by positive momentum in revenues, sizable margins and profitability indicators, sound liquidity profile and substantial debt-service coverages. Further, the ratings are underpinned by conservative capital structure with limited reliance on long-term borrowings. Despite procurement of incremental long-term to fund capex, gearing remained on a lower side and well aligned with the assigned ratings. Moreover, given there are no expansion plans in perspective with only normal BMR to be carried out, the leverage indicators are projected to improve during the rating horizon. Ratings will remain contingent upon retention and improvement in market share, capitalization and liquidity indicators, going forward.

For further information on this rating announcement, please contact the undersigned at 35311861-70 (Ext: 201) or Ms. Maham Qasim (Ext: 216) at 042-35723411-13 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Issue/Issuer Rating Scale

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