Fatima Fertilizer Company Limited (“FFCL” or “the Company”) was incorporated in December 2003 as a public limited Company under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017). The Company was subsequently listed on the Pakistan Stock Exchange (PSX) in 2010.

Fatima Fertilizer Company Limited (Fatima) is a joint venture between two prominent business conglomerates in Pakistan: the Fatima Group and the Arif Habib Group. The Company’s first major project, a fully integrated fertilizer production facility, was launched in 2006 in Sadiqabad, Punjab, and commenced operations in 2011. In 2015, Fatima Fertilizer acquired DH Fertilizers Limited, which included a Urea production unit located in Sheikhupura, Punjab, with an annual capacity of 445,500 metric tons. The acquired entity was renamed FatimaFert Limited and operated as a wholly owned subsidiary of Fatima Fertilizer from 2015 until 2019. Fatimafert Limited (FFT) was incorporated in 2020. After receiving approval from the Lahore High Court, Fatima implemented the Scheme of Compromises, Arrangements and Reconstruction to carveout the net assets related of Sheikhupura plant to FFT, from July 01, 2024. Pakarab Fertilizers Limited (PFL) was incorporated in 2024. After receiving approval from the Lahore High Court, Fatima implemented the Scheme of Compromises, Arrangements and Reconstruction to carveout the net assets related of Multan plant to PFL, with effect from January 01, 2025.

The Company is primarily engaged in the manufacturing and sale of various types of fertilizers and chemicals. Its head office is located in Lahore. The Company has three operating units situated across the province of Punjab at three different strategic locations: Mukhtar Garh, Sadiqabad (Sadiqabad Plant), Khanewal Road, Multan (Pakarab Fertilizers Limited) and 28–KM Sheikhupura Road, Chichoki Mallian (Fatimafert Limited). The Company primarily produces Urea, Calcium Ammonium Nitrate (CAN), and Nitro Phosphate (NP), utilizing Ammonia and Nitric Acid as key intermediary products, while Diammonium Phosphate (DAP) is imported. FFCL is widely recognized for its flagship brands, ‘Sarsabz’ and ‘Bubbersher’. The Company operates its three plants in Sadiqabad, Multan, and Sheikhupura.

The shareholding structure is primarily concentrated between the Fatima Group and the Arif Habib Group. The Fatima Group holds approximately 58.88% of the Company's equity, comprising 25.21% through associated companies (Farrukh Trading Company Limited, Fatima Management Company Limited, and Fatima Trading Company (Pvt.) Limited) and 33.67% through individual holdings. Arif Habib Group owns approximately 31.53%, including 15.19% held through Arif Habib Corporation Limited and 16.34% through individual holdings. The remaining 9.59% of the shareholding is held by the general public.

The ownership structure of the Company has remained stable since its inception, supported by two prominent business conglomerates. This stability is expected to continue in the foreseeable future. Additionally, members of the second generation have now been inducted into the business, ensuring continuity of leadership and strategic vision.

The Fatima Group is one of Pakistan’s leading corporate conglomerates, with diversified operations spanning commodity trading, fertilizer manufacturing, textiles, sugar, mining, and energy. Its key group companies include Fatima Fertilizer Company Limited, Pakarab Fertilizers Limited, Reliance Weaving Mills Limited, Fazal Cloth Mills Limited, Fatima Sugar Mills Limited, Reliance Commodities (Private) Limited, Fatima Energy Limited, Fatima Packaging Limited, Fatimafert Limited, Fatima Capital Limited and Fatima Holding Limited. The Arif Habib Group, meanwhile, ranks among the country’s most prominent financial services groups, with interests in securities brokerage, investment and financial advisory, asset management, commercial banking, commodities, private equity, cement, and fertilizers. The diversified business exposure and consistent performance of both groups reflect the strong business acumen and strategic foresight of their sponsors.

The Company’s financial strength is underpinned by the Company's Holdco status, with a consolidated annual turnover of PKR 276.17bln and a consolidated asset base of PKR 360.89bln as of CY25. This is further supplemented by the sponsor's robust financial capacity to support the Company, if needed.

The Board comprises seven members, including the Chairman and the Chief Executive Officer (CEO). The presence of two independent directors reflects the Company's commitment to strong corporate governance practices.

Mr. Arif Habib is the Chairman of the Board and also serves as the Chief Executive Officer of Arif Habib Corporation Limited. He chairs several prominent companies, including Aisha Steel Mills Limited, Power Cement Limited, Javedan Corporation Limited, Pakarab Fertilizers Limited, Fatimafert Limited, and Sachal Energy Development (Pvt.) Limited. Mr. Habib has held several prestigious public sector positions, including President/Chairman of the Karachi Stock Exchange (six terms), Founding Chairman of the Central Depository Company of Pakistan Limited, and member of various government advisory bodies, including the Prime Minister's Economic Advisory Council and committees on privatization, investment, tariff reforms, COVID-19 economic response, and foreign direct investment.

Mr. Fawad Ahmed Mukhtar, the Chief Executive Officer, possesses over 35 years of experience in manufacturing, industrial management, and business leadership. He has played a pivotal role in transforming the Fatima Group into a diversified business conglomerate. Alongside his corporate responsibilities, he actively leads several philanthropic initiatives through the Fatima Fertilizer Trust and Welfare Hospital, Fatima Fertilizer Education Society and School, and the Mukhtar A. Sheikh Welfare Trust. He also serves as Chairman and Chief Executive Officer of several Group companies across the fertilizer, cement, textile, trading, and energy sectors and is a member of the Board of Directors of the National Management Foundation, the sponsoring body of the Lahore University of Management Sciences (LUMS).

Mr. Fazal Ahmed Sheikh is a Director of the Company. He holds a degree in Economics from the University of Michigan, Ann Arbor, USA. He has played a strategic role in Fatima Group’s expansion and success. He is the CEO of Fatima Energy Limited, Pakarab Energy Limited, Fatima Electric Company Limited, Fatima Management Company Limited and Air One (Private) Limited. He is also a member of the Board of Directors at Fatimafert Limited, Pakarab Fertilizers Limited, PIA Equity Limited, Fatima Sugar Mills Limited, Fatima Holding Limited, Fatima Cement Limited, Fatima Fibres Limited, Reliance Fabrics Limited and Reliance Commodities (Pvt.) Limited.

Mr. Faisal Ahmed Mukhtar is a Director of the Company. He is the former City District Nazim of Multan, and continues to lead welfare efforts in the city. He is the Chief Executive Officer of Reliance Weaving Mills Limited, Fatima Sugar Mills Limited, Farrukh Trading Company Limited, Fatima Holding Limited. He is a member of the Board of Directors at Fatimafert Limited, Pakarab Fertilizers Limited, Fatima Cement Limited, Fazal Cloth Mills Limited, Fatima Electric Company Limited, Pakarab Energy Limited, Fatima Fibres Limited, Reliance Fabrics Limited, Reliance Commodities (Pvt.) Limited and Air One (Private) Limited. Additionally, he was also a member in the Provincial Finance Commission (Punjab), Steering Committee of Southern Punjab Development Project and Decentralization Support Program. Mr. Mukhtar has also served as the Chairman of Multan Development Authority and was also a member of a syndicate of Bahauddin Zakariya University, Multan.

Mr. Muhammad Kashif Habib is a Director of the Company. He is also the Chief Executive of Power Cement Limited. As a member of the Institute of Chartered Accountants of Pakistan (ICAP) he completed his articleship from A.F. Ferguson & Co. (a member firm of Price Waterhouse Coopers) gaining invaluable insight across sectors, catering to clients across the Financial, Manufacturing, and Services industries. He began his career at Arif Habib Corporation Limited, gaining valuable experience, and has since served for over a decade as an Executive Director in the Group’s cement and fertilizer companies. This exposure not only enriched his understanding of diverse corporate dynamics but also enabled him to refine his strategic decision-making capabilities. Kashif is deeply committed to enhancing the country’s energy landscape. He remains engaged with experts to establish renewable energy as a viable and readily available solution, benefiting not only industries but also the public at large. He is also the member of Board of Directors of Arif Habib Corporation Limited, Aisha Steel Mills Limited, Javedan Corporation Limited, Arif Habib Equity (Pvt.) Limited, Arif Habib Foundation, Arif Habib Development and Engineering Consultants (Pvt.) Limited, Black Gold Power Limited, Essa Textile and Commodities (Pvt.) Limited, Fatimafert Limited, Fatima Cement Limited, Fatima Packaging Limited, Nooriabad Spinning Mills (Pvt.) Limited, Pakistan Opportunities Limited, Rotocast Engineering Company (Pvt.) Limited, Safemix Concrete Limited, Sachal Energy Development (Pvt) Limited, BioMasdar Pakistan Limited, All Pakistan Cement Manufacturer Association, Siddiqsons Energy Limited, Pakarab Fertilizers Limited, Prime AGTech Solutions (Pvt) Limited, Naya Nazimabad IT Park Limited, Fatima Petroleum Company Limited, Fatima Capital Limited and Fatima Mining Limited.

The Company's Board also includes two Independent Directors. Mrs. Julie Jannerup is a seasoned professional holding a Master's degree in Chemical Engineering with extensive experience. Her journey began in 2007 at Topsoe, where she swiftly established herself as an adept leader. Mr. Tariq Jamali is the former Senior Executive Vice President and Group Chief of the Centralized Operations & Administration Group at the National Bank of Pakistan (NBP) and has also served as the Acting President of NBP.

The effectiveness of the Board is ensured through the establishment of three sub-committees: the Audit Committee, chaired by Mr. Tariq Jamali; the Human Resource and Remuneration Committee, chaired by Mrs. Julie Jannerup; and the Nomination & Risk Management Committee, chaired by Mr. Fazal Ahmed Sheikh. During the year under review, five meetings of the Board of Directors, four meetings of the Audit Committee, and one meeting of the HR Committee were held. The meeting minutes have been formally documented. 

To maintain high standards of transparency, the Company has appointed M/s Yousuf Adil, Chartered Accountants, as its external auditors. They are rated in ‘Category A’ by the State Bank of Pakistan (SBP) panel of auditors. The auditors have issued an unqualified opinion on the financial statements of the Company for the period ended December 31, 2025.

The Company has implemented a structured and well-defined organizational hierarchy to efficiently manage its multifaceted operations. Key operational heads—Director Sales & Marketing, Director Legal & Company Secretary, Director Business Development, Head of Supply Chain, Head of Lean Six Sigma, and Head of Administration—report to the Chief Operating Officer (COO). In contrast, Director Technology, Chief Manufacturing Officer, Director Human Resources, Advisor Projects, Chief Information Officer, Director Strategy, Chief Financial Officer, and the Chief Operating Officer report directly to the Chief Executive Officer (CEO). The Head of Internal Audit, however, reports independently to the Board Audit Committee.

Mr. Fawad Ahmed Mukhtar, the Chief Executive Officer & Director, possesses over 35 years of experience in manufacturing, industrial management, and business leadership. He has played a pivotal role in transforming the Fatima Group into a diversified business conglomerate. Alongside his corporate responsibilities, he actively leads several philanthropic initiatives through the Fatima Fertilizer Trust and Welfare Hospital, Fatima Fertilizer Education Society and School, and the Mukhtar A. Sheikh Welfare Trust. He also serves as Chairman and Chief Executive Officer of several Group companies across the fertilizer, cement, textile, trading, and energy sectors and is a member of the Board of Directors of the National Management Foundation, the sponsoring body of the Lahore University of Management Sciences (LUMS).

Mr. Asad Murad, the Chief Operating Officer, is a Fellow Member of the Institute of Chartered Accountants of Pakistan (ICAP) with over 30 years of experience in financial management, strategic planning, risk management, and corporate compliance. He joined the Fatima Group in 2010 as Group Head of Internal Audit and served as the Company's Chief Financial Officer from March 2014 to February 2021 and again from June 2022 to January 2025. During his tenure, he also held additional responsibilities as Head of Marketing & Sales and Director Finance, while playing a key role in government relations. His notable contributions include the consolidation of the Group's three fertilizer plants and the successful revival of the Multan plant through the restoration of sustainable gas supply from Mari Gas. Prior to joining the Group, he served as Chief Financial Officer of Honda Atlas Cars (Pakistan) Limited.

Dr. Syed Hyder Hasan, the Group Chief Financial Officer, is an accomplished finance professional with extensive international leadership experience across finance, business strategy, and value creation. Before joining the Fatima Group, he held senior global, regional, and country leadership positions with Unilever, Ingredion, and Indorama Corporation, with professional experience spanning Singapore, Malaysia, Thailand, and the Philippines. He has a proven track record of transforming finance functions into strategic business partners, strengthening financial governance, enhancing operational efficiency, and driving sustainable growth and profitability. Dr. Hyder was recognized among the Top 10 CFOs in Malaysia (2023) and the 100 Power Leaders in Finance (2022). He is a Fellow Member of the Institute of Cost and Management Accountants of Pakistan (FCMA) and holds an Honorary Professional Doctorate in Finance from the European International University. His extensive expertise continues to support the Fatima Group's strategic objectives and long-term value creation.

To ensure efficient and smooth flow of operations, the Company has established five management-level committees: the Executive Committee, which oversees daily operations and strategic planning; the Project Review Committee, which monitors project execution; the Enterprise Risk Management (ERM) Committee, which manages business risks; the Ethics Committee, which promotes integrity and compliance; and other specialized management committees that support operational and regulatory functions.

The Company has implemented Oracle Analytics Server (OAS) to enhance system performance, security, and scalability. This transition unlocked advanced machine learning capabilities, improved data visualizations, and enabled faster reporting and seamless IT integration. As a result, financial planning, budgeting, and forecasting processes have become more accurate and efficient. During the period under review, Targeted AI capability-building programs were conducted to upskill technical teams and empower business users, strengthening enterprise-wide digital maturity. Multiple AI use cases were deployed across finance, HR, procurement, and operations, delivering measurable efficiency gains, improved decision-making, and enhanced transparency. The organization’s leadership in AI innovation was powerfully affirmed when its AI application was selected and recognized at Google AI leaders fellowship program. An internally developed AI Governance Framework is being refined to align with global standards.

The Company has established a robust and proactive control environment, demonstrated by its strong commitment to health, safety, environmental stewardship, and quality management. This commitment has been recognized through numerous national and international awards and certifications, including the British Safety Council International Safety Awards, RoSPA Gold Award, ISO 45001 (Occupational Health and Safety Management System), ISO 9001 (Quality Management System), ISO 14001 (Environmental Management System), WWF Green Office Diploma, The Professionals Network 10th International EHS Award 2024, NFEH Fire Safety Awards (2024 & 2025), NFEH Annual Environment Excellence Awards (2024 & 2025), NFEH Best Tree Plantation Award 2025, Pakistan Safety Council Awards for Best HSE Initiative, Environmental Excellence, Management Road Safety, and Excellence in CSR, NSC Safety Leadership, Perfect Record, and Hazard Recognition Awards, and the Global 5S Housekeeping Certification. Additionally, the Company has enhanced workplace safety through the implementation of an Incident Reporting System within Sarsabz Connect, enabling real-time hazard identification and proactive risk mitigation. The Company has also strengthened its business continuity framework by transitioning from an outsourced disaster recovery (DR) site to a secure in-house DR facility, the effectiveness of which has been validated through comprehensive disaster recovery drills.

The fertilizer industry continues to benefit from its strategic importance in ensuring food security and sustaining agricultural productivity. Demand fundamentals remain supportive, although the sector remains exposed to fluctuations in farm economics, crop prices, government subsidy policies, and volatility in global commodity and gas prices. Despite these challenges, established manufacturers with integrated operations and diversified product portfolios are expected to maintain competitive positions owing to strong distribution networks and operational efficiencies.

Fatima Fertilizer Company Limited (FFCL) holds a notable production-based market share within the fertilizer industry. The Company has established a strong market presence, primarily driven by its widely recognized and trusted flagship brands, ‘Sarsabz’ and ‘Bubbersher’.

During 1QCY26, the Company's topline stood at PKR 27.9bln (1QCY25: PKR 42.1bln), reflecing the results of operations of its Sadiqabad Plant only. This was followed by the carveout of Multan Plant of the Company to its wholly owned subsidiary Pakarab Fertilizers Limited with effect from January 01, 2025. T he Company continues to benefit from diversified product mix. Over the longer horizon, the Company's earnings profile remains supported by its established production base and extensive market outreach.

In 1QCY26, the Company's profitability profile remained resilient despite a decline in revenue, primarily attributable to the carve-out of the Multan plant operations to the wholly owned subsidiary, Pakarab Fertilizers Limited. Gross profit amounted to PKR 13.0bln (1QCY25: PKR 18.5bln), translating into an improved gross margin of 46.7% (1QCY25: 43.9%). Operating profit stood at PKR 7.8bln, while the operating margin remained strong, clocking at 28.1%. A healthy contribution of income from the investment portfolio augmented the bottom line. The Company reported a PAT of  PKR 4.1bln (1QCY25: PKR 8.0bln) with a net profit margin of 15.0% (1QCY25: 19.1%).

The Company continues to broaden its business profile through a series of strategic investments and diversification initiatives across complementary sectors. As part of its sustainability and funding strategy, FFCL entered into a strategic partnership with the International Finance Corporation (IFC) to establish a US dollar-denominated renewable liquidity facility. The Company has also expanded into the mining and minerals sector through its investment in Globacore Minerals, in collaboration with Mari Minerals. Furthermore, FFCL has ventured into the exploration and production (E&P) sector through its wholly owned subsidiary, Fatima Petroleum Company Limited (FPCL), which has executed farm-out agreements with Mari Energies, Orient Petroleum Inc., Hycarbex American Energy Inc., and Turkish Petroleum Overseas Company (TPOC) covering four onshore and two offshore exploration blocks. In addition, the Company is part of the successful consortium for the acquisition of a majority equity stake in Pakistan International Airlines Corporation Limited (PIACL).

The Company continues to finance its working capital requirements primarily through internally generated cash flows and short-term borrowings. During 1QCY26, the Company's working capital profile remained adequate, although inventory levels exhibited an upward trend, resulting in a stretch in the net working capital cycle to 188 days (CY25: 90 days). Nevertheless, the liquidity profile remained strong, underpinned by healthy cash flow generation, adequate liquid resources, and sufficient available borrowing lines, providing the Company with ample financial flexibility to meet its operational and funding requirements.

During 1QCY26, the Company's cash flow generation remained satisfactory. EBITDA stood at PKR 9.8bln, while Free Cash Flow from Operations (FCFO) amounted to PKR 4.1bln. Consequently, the Company's EBITDA-to-finance cost coverage remained comfortably positioned at 7.3x. Core operating cash flow coverage strengthened, primarily driven by the decline in finance costs following the monetary easing cycle. The debt payback period improved to 1.0 year compared to 1.5 years in CY25.

The Company's capital structure remains low leveraged and adequately capitalized. During 1QCY26, the total borrowings stood at PKR 36.7bln, resulting in a leverage ratio of 20.2%, which improved from 32.1% in CY25. Shareholders' equity strengthened to PKR 160.1bln, primarily supported by retained earnings. However, the borrowing profile remained concentrated toward short-term financing, with 72.7% of total borrowings comprising short-term facilities, mainly utilized for working capital requirements.