Fatima Fertilizer Company Limited’s (FATIMA) April–June 2025 Results: Profits Up, Margins Down

Fatima Fertilizer Company Limited (FATIMA) has announced its results for April–June 2025, showing strong profit growth compared to last year, but also facing pressure from thinner margins and higher costs. Let’s break it down in simple terms.

Key results

• Profit After Tax (PAT): PKR 8.6 billion (+65% YoY)
• Earnings Per Share (EPS): PKR 4.1
• Dividend: PKR 3.5 per share (43% payout ratio)

For the first half of 2025, FATIMA’s total profit stands at PKR 16.9 billion, up 25% YoY.

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Sales are growing fast

FATIMA’s revenue jumped 51% YoY to PKR 63.9 billion this quarter, mainly because of higher sales volumes:

• Urea: 2.1x higher than last year
• Calcium Ammonium Nitrate (CAN): +57% YoY
• NP (Nitrophosphate): +27% YoY

This shows strong demand for fertilizers in the local market.

Margins under pressure

Despite higher sales, gross margins fell to 32.8% (down from 38.2% last year). The main reasons were:

• More discounts are offered to customers
• Lower contribution from urea sales at the base plant, which benefits from cheaper gas pricing

Other factors

• Other Income: PKR 3.5 billion (+65% YoY), boosted by higher cash and short-term investments.
• Finance Cost: PKR 2.0 billion (+2.5x YoY) due to higher borrowings, though partly offset by lower interest rates.
• Taxes: The Effective tax rate was 39%, lower than last year’s 49%.

Summary

Fatima Fertilizer delivered strong profit growth in April–June 2025, supported by higher sales volumes and improved investment income. However, rising borrowings, discount-driven lower margins, and higher expenses weighed on overall performance.

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For investors, FATIMA continues to be profitable and rewarding (with a healthy dividend), but the challenge will be managing margins in a competitive market.

Source: AKD Securities

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →