KARACHI: Fatima Fertilizer Company Limited (PSX: FATIMA) reported a slight dip of 0.23% in net profit to Rs8.37 billion for the quarter ended March 31, 2025, compared to Rs8.39bn in the same period last year, despite a significant decline in sales and operating profit. Earnings per share (EPS) came in at Rs3.99 versus Rs4.00 in the same quarter last year. The company’s stock, after the announcement, went up by 1.8%, despite drop in profit.
Sales revenue plunged by 21.32% year-on-year to Rs51.96bn, reflecting reduced offtake and possible price adjustments in the urea and DAP segments. Cost of sales also dropped, though at a slower pace of 19.71%, to Rs30.99bn, resulting in a 23.58% decline in gross profit to Rs20.97bn.
Selling and distribution expenses surged 18.69% to Rs4.05bn, likely on account of higher logistics and marketing costs. Administrative expenses, however, dipped slightly by 3.34% to Rs2.55bn. Consequently, operating profit slumped by 32.82% to Rs14.37bn.
Finance costs more than doubled—rising 131.37% to Rs1.90bn—driven by elevated interest rates and higher borrowing levels. Still, a sharp 81.88% reduction in other operating expenses to Rs1.07bn provided some cushion.
Profit before other income fell 22.23% to Rs11.4bn. Other income saw a mild dip of 3.78% to Rs2.22bn, but the absence of losses—compared to Rs660 million in the same period last year—helped contain the decline.
Profit before tax came in at Rs13.62bn, down 16.47% year-on-year. However, a steep 33.72% reduction in taxation to Rs5.24bn allowed the bottom line to remain nearly flat.
Industry Insight:
While top-line pressures are evident across Pakistan’s fertilizer sector amid soft demand and input cost volatility, FATIMA’s resilience lies in expense discipline and an easing tax burden. The modest decline in profit, despite a dramatic sales contraction, reflects strategic cost controls and a more favorable tax regime—though sustained pressure on margins may persist if sales fail to rebound.
