Engro Fertilizers Limited (“EFert” or “the Company”) was incorporated in 2009 under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017). The Company is listed on the Pakistan Stock Exchange and has emerged as one of the leading players in Pakistan's fertilizer industry, supported by its extensive production capacity, diversified product portfolio, and well-established nationwide distribution network.

The Company traces its origin to the demerger of Engro Chemical Pakistan Limited, a move necessitated by the conglomerate's strategic restructuring and expansion into multiple sectors. The demerger was executed strategically to allow Engro Holdings to allocate capital more efficiently across its diversified portfolio—which now encompasses fertilizers, petrochemicals, energy, telecommunications infrastructure, and food and agriculture businesses. EFERT emerged as the flagship entity for the Group's fertilizer operations, assuming responsibility for manufacturing, marketing, and distribution of a comprehensive range of fertilizer products across Pakistan. This structure has enabled the Group to pursue independent strategic initiatives in each business while maintaining operational and financial synergies through a strong parent company framework.

EFert, a leading name in the country’s urea producers, is primarily in the business of manufacturing and marketing urea and other fertilizer products.The Company's product portfolio is comprehensive and strategically positioned across multiple segments; Urea products, Marketed under the "Engro Urea" brand, representing the largest revenue contributor and the core driver of the Company's market leadership position. Urea comprises approximately 75-80% of EFERT's revenue and reflects the Company's strategy to dominate the largest fertilizer segment; Complex NPK Fertilizer, Marketed as "Zarkhez," addressing the balanced nutrient requirements of modern agriculture and catering to farmers seeking comprehensive soil enrichment solutions; Phosphate-based Products, Including Diammonium Phosphate (DAP) sold under the "Engro DAP" brand and Monoammonium Phosphate (MAP) marketed as "Zorawar," catering to specialty crop requirements and commanding premium pricing and; Zinc-based Micronutrient Fertilizer, Marketed as "Zingro," addressing trace mineral deficiency in soil and reflecting the Company's commitment to comprehensive agricultural nutrition. The Company has three production facilities, out of which two are Urea plants located in Daharki (Base and Enven Plant) and one is an NPK plant in Port Qasim, Karachi. The total designed capacity of EFert’s urea plants, base plant: 975,000 MT per annum and Enven: 1,300,000 MT per annum. NPK has a total capacity of 100,000 MT. DAP is imported. DAP is sourced through imports. The Company has cultivated a robust countrywide distribution network, supported by extensive dealer relationships, professional sales teams, and integrated logistics infrastructure. This distribution advantage has been instrumental in EFERT's ability to achieve higher urea offtake volumes and maintain strong dealer relationships even during periods of demand softness.

EFERT is majority-owned by Engro Holdings through Engro Corporation Limited, which holds approximately 56.3% of the Company's issued share capital. The remaining shareholding is distributed across the general public (approximately 20.90%), insurance companies (approximately 8.29%), mutual funds (approximately 2.20%), and financial institutions (approximately 1.81%). This ownership structure, with a dominant institutional sponsor and a broad public float, provides the Company with both strategic direction and market credibility while maintaining transparency through its listing on the Pakistan Stock Exchange. The concentration of ownership with Engro Holdings reflects the strategic importance of the fertilizer business to the overall Group portfolio, while the public float ensures market discipline and governance oversight through minority shareholder engagement.

The ownership structure is viewed as stable over the foreseeable future, given the unwavering commitment of Engro Holdings to its fertilizer operations. The Dawood Group, the principal shareholder through Engro Holdings, has a long-standing presence in Pakistan's industrial landscape spanning multiple decades, with a demonstrated track record of strategic stewardship and long-term value creation.

The Group's continued investment in EFERT's operational capacity, evidenced by capex program including the PEF project and sustained capital allocation underscore its commitment to the business. The strategic importance of fertilizers to Pakistan's agricultural economy, combined with EFERT's market leadership position, provides comfort to support the business through commodity cycles and macroeconomic fluctuations.

The Company's financial strength remains robust, underpinned by a strong equity base of PKR ~42.7bln as at Mar-26 (CY25: PKR ~44.7bln, CY24: PKR ~47.4) and a sizeable asset base of PKR ~204.7bln as at Mar-26 (CY25: PKR ~199.1bln, CY24: PKR ~170.6bln). The expansion in the asset base is primarily attributable to higher inventory levels and increased capital expenditure associated with the Production Enhancement Facility (PEF) project, supported through additional long-term borrowings. The Company's strong capitalization, healthy cash flow generation, and access to diversified funding sources continue to provide financial flexibility to support ongoing growth initiatives while maintaining a comfortable financial risk profile.

The Company's Board of Directors comprises eight members, providing a balanced governance structure designed to ensure effective oversight and strategic direction. The Board composition includes four Non-Executive Directors, one Executive Director, and three Independent Directors, including one female director, enhancing diversity and providing independent scrutiny of management decisions. This composition reflects contemporary governance best practices and ensures a healthy balance between executive leadership and independent oversight.

The Board is chaired by Mr. Ahsan Zafar Syed, the Chief Executive Officer of Engro Corporation Limited and a seasoned professional with an association spanning over three decades with the Engro Group. Mr. Syed has held several key leadership roles across the organization, including CEO of Engro Fertilizers and Engro Energy, and has been instrumental in spearheading major strategic initiatives such as the development of the EnVen fertilizer plant and the Thar coal power project. His appointment as Board Chair of EFERT underscores the strategic importance of the fertilizer business to the overall Group. Other Board members include Mr. Asad Said Jafar, a Non-Executive Director with extensive corporate leadership experience (former CEO and Board Chairman of Philips Pakistan Limited) and over three decades of professional experience. The Independent Directors bring diverse expertise and contribute to robust governance oversight.

The Board is supported by two principal committees: the Audit Committee and the People Committee, both chaired by Independent Directors. These committees meet on a quarterly basis, with comprehensive documentation of minutes and deliberations maintained for audit and regulatory purposes. The quarterly meeting schedule ensures timely deliberation of material matters and enables the Board to respond proactively to emerging risks and opportunities. The comprehensive documentation of committee deliberations provides transparency and accountability to external stakeholders.

A.F. Ferguson & Co., Chartered Accountants, a QCR-rated audit firm on the State Bank of Pakistan's "A" category panel, has issued an unqualified opinion on the Company's financial statements for CY25. The audit firm's high rating and SBP panel status provide confidence in the reliability and integrity of the financial reporting framework.

The Company has a well-defined organizational structure that is divided into fourteen main departments; (i) Marketing, (ii) Manufacturing, (iii) People Division, (iv) Digital Transformation, (v) Finance & Accounting, (vi) HSE, (vii) Information Technology, (viii) Engro Formulation, (ix) Public Affairs, (x) Central Procurement, (xi) Cenetral Treasury, (xii) Central Payables, (xiii) Operations and (xiv) Technical. Each departmental Head reports to the Chief Executive Officer (CEO), who then reports to the BoD. However, the Head of Internal Audit and HR reports administratively to the CEO and functionally to the respective BoD Committee. The Head of the Board Audit Committee has an indirect reporting line to the Head of Corporate Audit of Engro Holdings.

Mr. Imran Ahmed was appointed as Chief Executive Officer in May 2026, following the resignation of Mr. Ali Rathore, who had assumed the position in April 2024. Mr. Ahmed brings substantial experience from his tenure within the Engro Group, having held various management positions across the organization. He is responsible for executing the Board's strategic directives and overseeing the day-to-day operations of the Company, with particular focus on navigating the current working capital challenges and executing the strategic capex program. Mr. M. Imran Khalil serves as the Chief Financial Officer, bringing over a decade of association with the Engro Group and extensive expertise in large-scale digital transformation, risk management, and project management. He is responsible for all financial, treasury, and accounting functions, as well as coordination of financial strategy with the Board and senior management team. His experience in managing complex financial transformations and optimizing capital structures is critical during the current period of elevated leverage and working capital strain. The management team's long association with the Company and the Engro Group, barring few new positions, bodes well for overall growth and continuity. The depth of experience within the management team provides confidence in the Company's ability to navigate current challenges and execute the strategic capex program.

The management is assisted by four committees, i.e., Management Committee, Pricing Committee, Corporate HSE Committee, and Capex Committee. These committees are chaired by the CEO and meet on a periodic basis to ensure operational efficiency, strategic alignment, and compliance with internal policies and external regulations. The committee structure ensures that material decisions receive appropriate scrutiny and that implementation is monitored closely.

EFERT utilizes a fully integrated, real-time Enterprise Resource Planning (ERP) solution developed by SAP AG Malaysia, with technical support services provided by IBM Global Services. This enterprise system enables seamless integration across functional departments, ensuring efficient data flow and informed decision-making across the organization. The ERP system provides real-time visibility into production, inventory, sales, and financial positions, enabling management to respond quickly to market changes and operational challenges.

The review and accountability function runs through the entire organizational structure, with regular monitoring by the internal audit function, which reports to the Board Audit Committee. This comprehensive control framework provides confidence in the reliability of financial reporting and the effectiveness of risk management.

The Fertilizers industry is oligopolistic, now comprising four major players - Fauji (FFC, post the FFC-FFBL merger in Dec-24), Engro, Fatima, and Agritech. Urea and DAP remain the primary fertilizers by volume. Sector revenue grew ~10.1% YoY to ~PKR 846bln in CY25 (CY24: ~PKR 769bln), though its contribution to GDP held steady at ~0.8%. Fertilizer production eased slightly to ~9.3mln MT in CY25 (CY24: ~9.4mln MT), while offtake declined to ~9.3mln MT (CY24: ~10.0mln MT) amid softer phosphatic demand; imports fell sharply to ~0.5mln MT (CY24: ~1.2mln MT), and closing stocks rose to ~1.0mln MT (CY24: ~0.9mln MT). Urea's share of sector production moderated to ~65.6% (CY24: ~70.8%). While Pakistan remains self-sufficient in Urea, gas shortages had necessitated Urea imports in prior years; on a standalone basis, domestic urea production stood at ~6.6mln MT against offtake of ~6.7mln MT in CY25, leaving closing inventories of ~0.3mln MT and keeping reliance on imports (~0.06mln MT) minimal. Local urea prices eased ~2% YoY to ~PKR 4,448/bag (CY24: ~PKR 4,552/bag), even as import prices firmed to ~PKR 7,237/bag, preserving a wide local-import price gap. DAP remains largely import-dependent, with FFC the only major local manufacturer; ~56.5% of CY25 DAP availability was met through local production and ~36.3% through imports, with local DAP prices rising ~6% YoY to ~PKR 13,045/bag, tracking firmer international prices (~USD 701/MT, +26.8% YoY). Sector-wide working capital days stretched sharply to ~114 days (CY24: ~51 days) on a build-up in inventory (~117 days), while sector borrowings rose ~28.1% YoY to ~PKR 247bln, with the mix shifting toward long-term financing (~46.0% vs ~36.5% SPLY); interest coverage moderated to ~8.1x (CY24: ~11.9x) on the higher borrowing base. Overall, the sector's outlook remains stable, supported by recent government approval of indigenous gas allocation to select plants (FFC, Fatima, Agritech) and a planned ~USD 1.1bn coal-to-urea project in Thar (~0.7mln MT capacity), though a proposed cess on fertilizer companies remains a key regulatory risk.

EFert significantly strengthened its urea offtake position in CY25, achieving a share of ~34% (CY24: ~31%), translating into volumes of ~2,314mln MT against total industry urea offtake of ~6.7mln MT. EFert ranks as the second-largest urea player by offtake, though notably achieving the highest single-site throughput in the industry from its Daharki complex. In terms of urea production capacity, EFert holds ~31.9% (CY24: ~32.2%), behind FFC's ~45.4%, while Fatima accounts for the balance alongside Agritech. On an overall fertilizer basis (including DAP and other products, where EFert has no local manufacturing presence), EFert's share stood at ~20% on offtake and ~25% on production in CY25, positioning it as the second-largest player in the sector after FFC (~34% offtake, ~39% production), ahead of Fatima (~30% offtake, ~21% production) and Agritech (~5% each).

During CY25, EFERT reported revenue of PKR 193.2bln, representing growth of 3.5% year-on-year (CY24: PKR 186.7bln), supported by higher urea offtake volumes, the Company achieved market-leading urea offtake share of ~34% in CY25 (CY24: ~31%), translating into volumes of ~2.5mln MT. Gross margin improved to ~35.4% in CY25 (CY24: ~33.0%), reflecting better cost absorption on higher production volumes and stable feedstock gas pricing at PKR 580/MMBTU. However, net profit declined to ~PKR 23.8bln (CY24: ~PKR 30.2bln), compressing net margin to ~12.3% (CY24: ~16.2%). In 1QCY26, revenue stood at PKR 26.3bln (+8.2% YoY), but net profit further compressed to ~PKR 2.9bln (net margin: ~11.0%) compared to ~PKR 3.9bln in 1QCY25 (net margin: ~16.2%), reflecting elevated finance costs (up ~31% YoY in 1QCY26) on the higher borrowing base.

Gross margin improved to ~35.4% in CY25 (CY24: ~33.0%), reflecting better cost absorption on higher volumes. Net profit nonetheless reporting at ~PKR 23.8bln (CY24: ~PKR 30.2bln), with net margin easing to ~12.3% (CY24: ~16.2%) on a higher effective tax incidence and lower non-operating income. Reflecting the softer bottom line, the full-year cash dividend was reduced to PKR 15/share (CY24: PKR 21.5/share), a cut of ~30%. In 1QCY26, standalone net profit stood at ~PKR 2.9bln (1QCY25: ~PKR 3.9bln), with net margin at ~11.0% (1QCY25: ~16.2%), even as a dividend of PKR 2.0/share was declared (1QCY25: PKR 2.25/share).

The Company continues to explore new avenues, particularly in pesticides and agri-farming sectors, which are expected to yield positive results in the long run. On the gas front, EFert is executing a Pressure Enhancement Facility (PEF) project at its Daharki plants, part of a broader ~USD 300mln capex program to stabilize and enhance gas pressure from the Mari gas field; Phase 1 is expected to complete by CY26, with Phase 2 progressing alongside planned outlays of ~PKR 12bln in 1QCY26.

The gross working capital cycle elongated to 105 days during Mar-26 (41 days during CY25 & 25 days during CY24). Inventory kept building through CY25, reaching ~PKR 11.2bln by Dec-25. Following an exceptionally strong Dec-25 quarter, dealer inventories built up further, and by Mar-26 the Company's standalone inventory stood at ~PKR 24.2bln, reporting the average inventory days at 61 days during Mar-26 (CY25: 22 days, CY24: 17 days). Correspondingly, standalone cash and short-term investments declined to ~PKR 17bln by Mar-26 (Dec-25: ~PKR 23bln), underscoring the continued strain on the borrowing cushion. However, trade payable days remained stable at 5 days during Mar-26 (CY25: 3 days, CY24: 3 days). Resultantly, net working capital days stood at 99 days during Mar-26 (39 days during the full year as compared to 22 days in the previous year).

As of CY25, the Company reported FCFO of ~PKR 32bln (CY24: ~PKR 12bln). Consequently, FCFO/Finance Cost cover is reported at ~5.2x (CY24: ~3.0x). Finance costs rose further through CY25 and into 1QCY26 (up ~40% YoY in 4QCY25 and ~31% YoY in 1QCY26) on the back of higher borrowings, which is likely to have kept coverage metrics under some pressure; nonetheless, the Company's operating cash generation continues to provide reasonable headroom over debt servicing obligations.

EFert has a moderately-to-higher leveraged capital structure with a leveraging ratio of ~64.5% in Mar-26 (CY25: ~60% & CY24: ~42.2%) due to a significant increase in borrowings. Borrowings rose further to ~PKR 67bln by Dec-25 (CY24: ~PKR 34bln), an increase of ~97% YoY, largely to fund the elevated inventory position and ongoing capex, including the PEF project. Total standalone borrowings increased a further ~15% QoQ to ~PKR 77bln by Mar-26 (Dec-25: ~PKR 67bln), reflecting continued reliance on short-term debt to manage the seasonal inventory build. While the Company's long-term leverage remains comparatively higher, prudent management of short-term debt continues to be essential.