Fertilizer Sector Profit in 2025 Rises 10% to Rs141bn

Pakistan’s listed fertilizer sector recorded the profitability of Rs141.1bn, up by 10% YoY. The YoY increase is primarily led by 1) higher urea offtakes, 2) higher other income, and 3) lower other charges. In 4Q2025, the profits reached Rs38.1bn, down by 2% YoY and up 3% QoQ.

The net sales of the sector clocked in at Rs981.6bn in 2025, up by 7% YoY amid higher Urea and DAP offtakes. In 4Q2025, the revenue surged by 8% YoY and 41% QoQ to Rs361.0bn.

During 2025, Urea offtakes soared by 2% YoY to 6.7mn tons, whereas DAP offtakes decreased by 18% YoY to 1.34mn tons during the period. Similarly, in 4Q2025, Urea offtakes soared by 26% YoY and 36% QoQ to 2.5mn tons.

Read More: Govt Imposes Levy on Fertilizer Captive Plants

The gross margins of the sector slightly declined to 31% in 2025 mainly due to discounts offered by companies. Similarly, the margins fell to 27% in 4Q2025 as compared to 29% in 4Q2024 and 32% in 3Q2024. To highlight, EFERT offered a discount range between Rs300-400/bag and FFC offered between Rs100-200/bag in 4Q2025.

Other income was up by 20% YoY, reaching Rs24.8bn in 2025. The YoY increase in other income is primarily due to FFC’s higher dividend income of Rs9bn from Energy Businesses, and Rs7bn from PMP. While on a quarterly basis, other income reduced by 32% YoY and 23% QoQ to Rs10.7bn in 4Q2025.

The other charges decreased by 32% YoY to Rs21.7bn in 2025. Similarly, the charges were down by 40% YoY but up 18% QoQ to Rs6.6bn in 4Q2025. The reduction in charges was primarily due to the absence of FFC’s impairment booked on investment and subsidy receivables in 4Q2024.

The finance cost of the sector surged by 9% YoY, reaching Rs24.8bn in 2025. However, the cost declined by 8% YoY but remained up 16% QoQ to Rs6.8bn in 4Q2025.

Moreover, the fertilizer sector companies disbursed Rs111.8bn, up 72% YoY to its shareholders in the form of dividends during the year 2025.

For the purpose of analysis, we have considered FFC on an unconsolidated basis, while EFERT and FATIMA are taken on a consolidated basis to consider fertilizer operations.

FFC: Company sales increased by 16% YoY, reaching Rs432.4bn in 2025. However, during 4Q2025, sales remained flat YoY but rose 18% QoQ, totalling Rs149.7bn. Gross margins squeezed to 30% in 2025, as FFC recorded a provision of Rs14.13bn against sales tax receivables. In 4Q2025, gross margins stood at 25% vs 31% in 3Q2025 and 26% in 4Q2024.

FFC reported profits of Rs73.5bn (EPS: Rs51.12) in 2025, representing a 14% YoY increase driven by higher dividend income from energy business, resulting in 13% YoY increase in other income. In 4Q2025, profits reached Rs15.9bn (EPS: Rs11.07), up 12% YoY but down 17% QoQ due to one-off expense of sales tax provision.

EFERT: EFERT sales fell to Rs237.1bn, down by 8% YoY in 2025. The quarterly sales soared by 20% YoY and 86% QoQ to Rs101.7bn. Similarly, the gross margins increased to 31% in 2025 as compared to 28% in 2024. However, in 4Q2025, the margins decreased to 28% vs 31% in 4Q2024 and 33% in 3Q2025. The decrease in margin during 4Q2025 is due to the higher discounts offered (Rs300-400/bag).

Company’s profit decreased by 20% YoY to Rs22.6bn (EPS: Rs16.95) in 2025 led by lower margins amid higher finance cost up by 49% YoY amid surge in total debt up 68% YoY. In 4Q2025, earnings clocked in at Rs8.4bn (EPS: Rs6.26), down 19% YoY and up 44% QoQ.

FATIMA: Company witnessed a surge of 7% YoY in sales reaching to Rs276.1bn in 2025. Similarly, in 4Q2025, the sales surged by 13% YoY and 55% QoQ to Rs97.3bn with higher Urea offtakes clocking at 185k tons. FATIMA gross margins reported at 34% in 2025 vs 36% in 2024. During 4Q2025, the margins recorded at 31% vs 35% in 3Q2025 and 32% in 4Q2024.

Similarly, FATIMA recorded 15% YoY increase in profits reaching Rs42.1bn (EPS: Rs20.03) mainly due to 49% YoY decrease in other charges amid absence of impairment losses. In 4Q2025, the profits reached to Rs13.1bn (EPS: Rs6.26), down 4% QoQ and up 10% YoY.

Outlook: We expect the industry to remain stable, supported by the strong Urea demand and seasonal agricultural activities. Similarly, the margins are expected to ease with the rollback of dealer discounts coupled with normalization in urea inventory levels,” Topline said.