Fatima Fertilizer Company Limited’s financial results for the half year ended June 30, 2011

Karachi: We have to inform you that the Board of Directors of our Company in their meeting held on August 23, 2011 at 09:00 a.m. at E-110, Khayaban-e-.Jinnah, Lahore Cantt., recommended the following:

(i)  Cash Dividend

An Interim Cash Dividend for the half year ended June 30, 2011 at Rs. Nil per share i.e. Nil %. This is in addition to interim Dividend already paid at Rs. Nil per share i.e. Nil %.

(ii) Bonus Shares

It has been recommended by the Board of Directors to issue Interim Bonus Shares in the proportion of Nil shares for every Nil shares held i.e. Nil %. This is in addition to the interim Bonus Shares already issued @ Nil %.

(iii) Right Shares

The Board has recommended to issue Nil % Right Shares at par/at a discount /premium of Rs. Nil per share in proportion of Nil share for every Nil share.

(iv) Financial Results

The Financial Results and Directors Report of the Company for the half year ended June 301

2011 are enclosed.

Fatima Fertilizer Company Limited

Condensed Interim and Loss Account (Un-audited)

For the Half Year Ended June 30, 2011


Quarter Ended

Half Year Ended

June 30


June 30


June 30


June 30


Rupees in thousand

Rupees in thousand

Administrative expenses (43,534)  (34,458)  (80,642) (60,856)
Finance cost  (427) (6,073) (3,343)  (6,623)
Other income 11,823 260 14,536  260
 ——  —— —— ——
Loss before taxation  (32,138) (40,271)  (69,449) (67,219)
Taxation (42,301) (6,357) (83,267)  (6,357)
——  —— ——  ——
Loss for the period (74,439) (46,628) (152,716)  (73,576)
 —— —— —— ——
Loss per share basic (rupees)  (0.04)  (0.02) (0.08)  (0.04)
 ——  —— —— ——
diluted (rupees) (0.03)  (0.02) (0.06)  (0.03)


Fatima Fertilizer Company Limited

Directors’ report

For the Half Year ended June 30, 2011

Dear Shareholders,

On behalf of Board of Directors of Fatima Fertilizer Company Limited, I am pleased to present the six monthly report together with the un-audited financial statements of the Company for the half year ended June 30, 2011.

It gives me great pleasure to inform you that Alhamdolillah the Company has commenced commercial production from July 01, 2011 after successful completion of trial run. The Board records its appreciation for the contribution of all stakeholders including Shareholders, Lenders, Government of Pakistan, Business Associates and all employees of the Company for achieving an important milestone in the life of the Fatima Fertilizer Company Limited.

The product-wise trial production during the period ended June 30, 2011 is as under:


Product  Production Tons
Ammonia 177,710
Urea 205,875
Nitric Acid 112,187
CAN 161,506
NP 10,011


The market demand for Urea and CAN continued to be strong during the Rabi season, which resulted in high sales volume Increase in the fertilizers prices has also contributed to improved margins. Urea and CAN sales during six months period were PKR 8 billion and the trial run gain was PKR 4,123 M. The formal profit and loss account reflects Loss after tax of PKR 152 M which primarily represents administration related costs and minimum tax liability for the six months period.

The liquidity position of the Company has improved following the NP plant becoming operational and todate all financial obligations of the Company have been met from Cash generated from operations.

In order to optimize the capacity utilization of Ammonia Plant Natural gas compressors have been installed at Man Gas site to increase gas pressure. It has resulted in increase of Ammonia plant production level to 90%. However some initial technical matters still being addressed to help operate the plant at 100% capacity.

Your Company has entered into an agreement with N. Serve Environmental Services GmbH, a German Limited Liability Company, for development and implementation of a Clean Development Mechanism (CDM) project under the provision of the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. CDM Project will generate and issue CERs or other abatement benefits resulting in revenue generation for the company in foreign currency which is expected to start production by end of 2011.

Your company continues to conduct international road shows in support of our American Depository Receipts (ADR) program. This level I AUR was launched on March 09, 2011 and the designated Depositary Bank is BNY Mellon USA. The ADRs will be traded in New York in the over the counter market under the symbol `FTMFY’.

The Oracle ERP modules with respect to Oracle Financials, Purchasing, Oracle Asset Management and Oracle Supply Chain Management are fully operational while the implementation of Oracle HRMS and Manufacturing is in progress and will be operational by mid-2012.

Fertilizer Industry

The demand for nitrogen remained strong through the period with early sowing of BT cotton and with farmers focus on recovering losses caused by the floods in the 2010 floods. Thus the fertilizer industry remained buoyant, particularly for Urea. However the local industry was hampered by extended and unprecedented gas shutdown and curtailment through all of the first half of the year. The four plants on the SNGPL network were the worst hit with cumulative closure of over three months. This has resulted in shortage of Fertilizer in the Country jacking up the prices for the farmers. This will require additional import of Fertilizer increasing the burden of high subsidies to be borne by the Government in addition to spending of valuable foreign exchange of the Country to purchase it from international market at much higher prices as compared to local Fertilizers. Though, Fatima has remained unimpacted by the extraordinary curtailment.

The imposition of 17% GST in March has also contributed in the price increase of Fertilizers in Pakistan.

Fatima’s Products Market Review

Sales volume in the second quarter continued to grow over last year’s trial production. With the prevailing tight fertilizer condition in the country sales remained buoyant through the first half of the year. NP sales commenced during the end of the second quarter and the response to both product and packaging is positive. The company continued supporting the brand with extensive media campaign. Additionally the farmer outreach programme continued to target the consumer through seminars, famer gatherings and field demonstrations. A retailer image campaign was launched with our top performing dealers by installing shop boards and signage and display of Point of Sale material. Our network expansion plans are ahead of the annual plan as we target growth of our distribution reach.

Future outlook

Given the continuing specter of Gas curtailment, unless addressed otherwise by the Government, fertilizer industry will be hard pressed to meet the urea demand for Rabi. However the Phosphate market is expected to remain under pressure with high opening inventory for Rabi. The prices of DAP are expected to remain at the current high levels with possibility of perhaps an upward revision in fourth quarter. Under the current Market conditions Fatima is expected to do well in foreseeable future.

The directors would like to place on record their appreciation for the assistance, guidance and cooperation that your company received from all the stakeholders including the Customers, Business Associates, Financial Institutions and Government of* Pakistan. Further the Directors also wish to record their appreciation for the hard work and dedication of all employees.


For more informatio, Contact:
Arif Habib
Fatima Fertilizer Company Limited
E-110, Khayaban-e-Jinnah, Lahore
Cantt., Pakistan.
PABX: +92 42 111-FATIMA (111-328-462)
Fax: +92 42 36621389
Web: www.fatima-group.com

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