Fatima Fertilizer sees rebound in urea sales, strong outlook for 2026

Fatima Fertilizer Company Limited has expressed optimism about a pickup in urea sales in December and expects 2026 to be a strong year for Pakistan’s fertilizer sector, driven by supportive government policies and improving demand dynamics, company management said during a recent corporate briefing.

The management noted that the government’s initiative to set the wheat support price at PKR 3,500 per 40kg is expected to boost farm economics, which in turn should support fertilizer offtake in the coming year. The company remains hopeful of strong performance in December, with industry-wide urea inventories projected to decline further.

During the briefing, the management highlighted that the company has significantly increased its market share despite a challenging demand environment. Fatima Fertilizer’s nitrogen market share rose to 26.9% from 22.3%, while phosphate market share increased to 40.9% from 36.7%. Although demand across both categories declined during the first nine months of 2025 due to reduced agricultural activity in the Kharif season, management expects a recovery by year-end.

The company attributed lower fertilizer offtakes earlier in the year to subdued Kharif activity, which led to elevated industry urea inventories of around 1.14 million tons in November.

However, the management expects inventories to fall sharply in December, with year-end estimates of approximately 700,000 tons for urea and 200,000 tons for DAP.

On the operational front, the management confirmed that the Sadiqabad plant is scheduled for a turnaround in 2026, while the Multan and Sheikhupura plants will not undergo any turnaround in the upcoming year.

Regarding the Mari Pressure Enhancement Facilities (PEF) project, the company said it values the initiative and is fully prepared to maximize production, hoping for a consistent gas supply to all plants for at least the next 10 years.

Fatima Fertilizer also shared updates on diversification plans beyond its core fertilizer business.

The management said the company is exploring opportunities in corporate farming, agri-business, mining, fintech, and real estate investment trusts (REITs). However, none of these ventures are currently material enough to require immediate disclosure.

On the mining side, management noted that initial exploration is expected to take three to four years before moving to the next phase.

Regarding Pakistan International Airlines (PIA) privatization, the management stated that it is premature to comment, adding that the shareholding structure is not finalized and will require time for clarity.

On the financial side, the company reported consolidated earnings of PKR 28.9 billion (EPS: PKR 13.7) for 9MCY25, compared to PKR 22.7 billion (EPS: PKR 10.8) in the same period last year, reflecting a 27% year-on-year increase. The growth was driven by higher offtakes and increased other income.

The Management also shared that around 50% of the company’s short-term investments are allocated to listed equities, with the remainder invested in mutual funds and sukuks.

Looking ahead, the company expects DAP prices to remain within the current range next year, with NP prices also likely to stay stable as they generally track DAP prices.

Overall, the management reiterated its confidence in the fertilizer sector’s outlook for 2026 and said it sees no need for urea exports, given expectations of strong domestic demand supported by favorable policy measures.