Pakistan Credit Rating Agency Limited assigns entity ratings to Fauji Fertilizer Company Limited

Lahore, August 04, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has assigned a long-term entity rating of “AA” (Double A) and short-term entity rating of “A1+” (A One Plus) to Fauji Fertilizer Company Limited (FFCL). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The rating reflects FFC’s dynamic business profile and strong financial position while incorporating the sound financial strength of Fauji Group. FFC is one of the largest players in the fertilizers market. The strong business/professional footprint of FFC has enabled the company to build an impeccable brand in Pakistan with “Sona” being a household name in the farmer community.

The production facilities are secured by uninterrupted supply of gas from Mari field, representing inherent commercial strengths of the company thereby ensuring sustainable business volumes for FFC. Urea market itself has strong fundamentals historically; demand has exceeded supply. The only challenge is parity with international prices; yet FFC is committed towards costs economization for sustained returns for the company.

FFC carries a sizable book of diversified investments, which has been developed to offer sustainable returns to its stakeholders. FFC recently diversified into the financial sector by acquiring a sizable stake in Askari Bank (43.15%), which has a distinct presence in Pakistan’s financial sector: dividend stream from these investments compliments FFC’s ratings. FFC is eyeing expansion in fertilizer (outside Pakistan) and mining operations; leveraging associated with new projects will require oversight and close attention.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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