Fatima Fertilizer posts record performance in first half of 2024

Fatima Fertilizer Company Ltd. (FATIMA), one of Pakistan’s leading fertilizer producers, has reported its highest-ever production volumes for the first half of 2024, with consolidated earnings reaching PKR 13.58 billion ($48.74 million). This marks a substantial 159.65% year-over-year increase from PKR 5.23 billion ($18.77 million) during the same period in 2023. The company attributes this performance to enhanced production volumes, improved gross margins, increased other income, and the absence of a super tax impact compared to the previous year.

The company’s production rose by 29% over the prior year, primarily due to the resolution of operational challenges such as the partial shutdowns at its Multan and Sheikhupura plants. This period also highlighted Fatima Fertilizer’s commitment to safety, recording 127.61 Safe Million Man-Hours and maintaining a zero Total Recordable Incidence Rate.

Despite a 2.5% contraction in the Pakistani fertilizer market amid economic pressures from the wheat crisis, Fatima Fertilizer’s market share saw only a slight decline. The sales volumes of manufactured fertilizers (NP, CAN, and urea) remained substantial at 1.03 million metric tonnes. The company also distributed 38,000 metric tonnes of urea imported by the National Fertilizer Marketing Limited.

Financial insights from the company for the first half of 2024 highlight a 28% increase in fertilizer sales revenues, reaching PKR 107.08 billion. Improved plant efficiency and various cost optimization measures helped contain the rise in production costs, which were driven by higher input costs and inflation, to 16%. Administrative and distribution expenses rose due to inflationary trends but were offset by a 45% reduction in finance costs, thanks to effective financial management and robust cashflows. Additionally, other income increased by 274%, largely from returns on various investments.

Looking ahead, the agriculture sector in Pakistan has shown promising growth, increasing by 6.25% last fiscal year, bolstering exports. However, for sustainable growth, consistent governmental policies are crucial to ensure the availability of farm inputs at affordable prices, support for farm produce sales, and effective climate control measures.

Fatima Fertilizer, operating three plants in Sadiqabad, Multan, and Sheikhupura with a combined capacity of 2.57 million metric tonnes annually, continues to play a vital role in supporting Pakistan’s agricultural sector. The company emphasizes the need for a stable gas supply to maintain uninterrupted fertilizer production and affordable urea availability for farmers, calling on the government to establish a reliable supply mechanism.