Karachi: Fatima Fertilizer Company Limited has reported a 21% decline in consolidated sales revenue for the first quarter of 2025, reflecting significant challenges in the local fertilizer market. The sales revenue dropped to Rs 51.96 billion from Rs 66.04 billion during the same period last year. The company's gross profit also saw a decline, closing at Rs 20.97 billion compared to Rs 27.44 billion in the previous year.
The company's operational report highlights the broader economic context of Pakistan, where fiscal and external stability has been observed, supported by factors such as reduced energy prices and fiscal consolidation measures. These factors have contributed to a primary surplus and a narrowed fiscal deficit, bolstering the external sector with a current account surplus, export growth, and increased foreign investment. According to information available from the Pakistan Stock Exchange (PSX), investor confidence remains strong, as evidenced by the bullish performance of the stock market.
Internationally, phosphate prices have been on the rise due to increased production costs, while urea prices exhibited a volatile trend, firming by approximately 20% before dropping by mid-February 2025. Ammonia prices decreased by 24% due to an oversupply in the market. Locally, the fertilizer market has seen a substantial decline of 38% in the first quarter compared to the same period last year, with total offtake falling from 2,543k MT to 1,557k MT. The decline is attributed to adverse climatic conditions affecting cotton production and the lingering effects of the previous year's wheat crisis, which have collectively impacted farmer economics.
Despite the challenging market environment, Fatima Fertilizer Company Limited maintained a strong market presence, achieving a 34% market share, up from 27% in the previous year. The consolidated sales volume for the period reached 529k MT. Selling and distribution costs rose by 19% due to increased transportation and storage expenses, while administrative expenses decreased by 3%.
The company reported a consolidated profit before tax of Rs 13.62 billion, down from Rs 16.30 billion in the previous year. However, a reduction in the effective tax rate allowed the company to post a consolidated profit after tax of Rs 8.37 billion, only slightly lower than the Rs 8.39 billion recorded last year. The financial results include the performance of subsidiaries such as Fatimafert Limited and Pakarab Fertilizers Limited.
Looking ahead, the company anticipates an increase in fertilizer offtake during the upcoming Kharif Season, expecting continued strong financial results. Fatima Fertilizer Company Limited is also exploring new investment opportunities in sectors like large-scale mining and corporate farming to further diversify its portfolio and strengthen financial returns for stakeholders. The company's involvement in the discovery of significant copper-gold mineralization in Balochistan underscores its commitment to exploring the mineral sector's potential.