Earnings Release • Nov 7, 2024
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date: 2024-11-06 16:24:00+00:00
PhosAgro Reports Operating and Financial Results for 9M 2024
Moscow – PhosAgro Group (“PhosAgro” or “the Company”) (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers, today announces its operating results and its consolidated interim condensed financial results for the nine months ended 30 September 2024.
9M 2024 highlights
In 9M 2024, production of agrochemical products increased by 2.4% year-on-year to 8.8 million tonnes, driven mainly by a 4.0% increase in the production of phosphate-based fertilizers and feed phosphates, to 6.7 million tonnes.
Total sales of agrochemical products rose 4.1% year-on-year in 9M 2024, exceeding 9 million tonnes. At the same time, sales of phosphate-based fertilizers and feed phosphates rose 5.9%.
Revenue in 9M 2024 amounted to RUB 371.0 billion, an increase of 12.8% year-on-year on the back of higher production and sales.
The Company’s EBITDA in 9M 2024 amounted to RUB 123.5 billion, down 18.2% year-on-year.
Free cash flow for the period amounted to nearly RUB 36.0 billion.
Net debt amounted to RUB 272.7 billion as of 30 September 2024, and the net debt/EBITDA ratio as of the end of the reporting period was a comfortable 1.75x.
Financial and operating highlights:
** Adj. EBITDA is calculated as EBITDA adjusted for FX differences from operating activities.
*** Adj. net profit is net profit as reported minus FX gain or loss.
The Company’s revenue in 9M 2024 rose 12.8% year-on-year, driven chiefly by increased production and sales of phosphate-based fertilizers (mainly NPK) at a time when average prices in global markets had recovered from the beginning of the year.
The Company’s EBITDA in the first nine months of the year amounted to RUB 123.5 billion thanks to increased sales volumes and higher prices as well as the positive effect of exchange rate differences. At the same time, EBITDA faced pressure from factors such as an increase in production costs owing to the payment of export duties introduced in 2023, greater consumption of raw materials and higher personnel costs.
EBITDA margin in 9M 2024 was 33.3%, driven by the Company’s highly efficient production assets, increased production of high-margin fertilizers and basic feedstocks as well as its flexible sales policy.
Free cash flow (FCF) in 9M 2024 amounted to nearly RUB 36.0 billion. The amount of free cash flow in 2024 was impacted by a planned increase in capital expenditures (associated with the implementation of major investment projects) and cash outflows of RUB 18.5 billion in the third quarter for working capital requirements, alongside increased exports to Latin American countries and the stockpiling of inventories ahead of seasonal demand in the Russian and European markets.
Thanks to its strong financial position, the Company was able to service all its debt obligations, including those denominated in foreign currency, on time and in full. As of the end of 9M 2024, the Company’s debt position remained at a comfortable level. As of 30 September 2024, net debt amounted to RUB 272.7 billion, and the net debt/EBITDA ratio was 1.75x.
The Company’s debt position since the beginning of the year has been impacted by factors such as the issuance of RUB 35 billion in exchange-traded bonds in September (the Company used these funds to repay over RUB 20 billion in short-term debt in October 2024), as well as the depreciation of the rouble against the US dollar and Chinese yuan and the revaluation of debt denominated in foreign currencies into roubles at a new exchange rate.
Thanks to its long-term programme to develop its production assets, the Company was able to increase its output of agrochemicals by 2.4% to 8.8 million tonnes in 9M 2024.
Phosphate-based fertilizers accounted for the bulk of the production increase (output of DAP/MAP rose 2.1%; NPK, 17.2%; and MCP, 8.1%). This growth was attributed to two factors: increased processing of phosphate rock at the Group’s production sites and the fact that the Company’s Volkhov production plant reached its design capacity.
The growth in the production of three-element fertilizers was due to a 13% year-on-year increase in sales of agrochemicals to the Company’s priority domestic market and was made possible thanks to the flexibility of the Company’s production facilities, which are able to switch between the production of two- and three-element fertilizers.
The high production volumes were driven by, among other things, an increase in the output of two basic feedstocks – phosphoric acid and sulphuric acid.
The over 4% uptick in sales in 9M 2024 was driven by increased production, the excellent performance of Group’s sales network in the Russian market and the strong positions enjoyed by the Company’s products in global markets.
Sales rose mainly due to a 5.9% year-on-year increase in sales of phosphate-based fertilizers. The markets that have shown the highest growth rates in terms of shipments in 2024 are Russia, Europe, Latin America and Africa.
Fertilizer market in 3Q 2024
The lack of large-scale fertilizer exports from China alongside growth in seasonal demand in key Latin American markets and, to a lesser extent, in South Asian countries were the main factors shaping the global fertilizer market in 3Q 2024.
Production constraints owing to regular shutdowns for summer maintenance at key fertilizer producers had a positive impact on prices, which was partially offset by the weakening of prices in global markets for agricultural products and, consequently, a decrease in the affordability of fertilizers for agricultural producers.
Prices for phosphate-based fertilizers were supported by Latin American markets, where the third quarter has historically been a period of peak seasonal demand. Despite the low level of subsidies for phosphate-based and potash fertilizers in India, regional prices rose due to the lack of large-scale exports from China and a decrease in inventories, reaching critical levels. The average price for MAP in 3Q 2024 was USD 592 per tonne (FOB Baltic), up from USD 532 per tonne (FOB Baltic) in 2Q 2024.
Prices for nitrogen-based fertilizers also rose due to seasonal restrictions on exports from Russia, South-east Asia and North Africa amid stable demand from Central and South America as well as a number of large markets in Asia and Oceania. India also stepped up its urea imports. The average price for urea in 3Q 2024 was USD 307 per tonne (FOB Baltic), up from USD 278 per tonne (FOB Baltic) in 2Q 2024. The average export price for ammonium nitrate in 3Q 2024 was USD 237 per tonne (FOB Baltic), versus USD 205 per tonne (FOB Baltic) in 2Q 2024.
Outlook for 4Q 2024
Demand from India is projected to continue in the phosphate-based fertilizer segment due to the low level of carryover stocks. Exports from US producers of phosphate-based fertilizers are expected to contract, due in part to significant production cuts (the impact of hurricanes) and increased supplies to the domestic market.
In the nitrogen-based fertilizer segment, the market is seeing rising seasonal demand in India and Brazil, two of the largest markets for urea, which is expected to support urea prices.
For further information, please contact:
PJSC PhosAgro
Andrey Serov, Head of the Investor Relations Department
+7 495 231 2747 ext. 2183
Timur Belov, Press Officer
+7 495 231 2747 ext. 2652
About the Company
PhosAgro (www.phosagro.ru) is a vertically integrated Russian company and one of the world’s leading producers of phosphate-based fertilizers and high-grade phosphate rock with P2O5 content of 39% or higher. PhosAgro’s high-performance fertilizers produce crops with advanced features.
PhosAgro Group is the largest producer of phosphate-based fertilizers in Europe (by total combined capacity for the production of DAP, MAP, NP, NPK and NPS fertilizers), the largest producer of high-grade phosphate rock with P2O5 content of 39%, one of the leading producers of MAP and DAP fertilizers globally, one of the leading producers of monocalcium feed phosphates (MCP) in Europe – and the only such producer in Russia – and Russia’s only producer of nepheline concentrate.
PhosAgro’s main products, including phosphate rock, 58 grades of fertilizers, feed phosphates, ammonia and sodium tripolyphosphate, are used by customers in 100 countries spanning all the world’s inhabited continents. The Company’s priority markets beyond Russia and the CIS are Latin America, Europe and Asia.
The Company’s shares are listed on the Moscow Exchange and its global depositary receipts (GDRs) are listed on the London Stock Exchange (MOEX and LSE ticker: PHOR).
More information about PhosAgro can be found on our website: www.phosagro.com.
*Non-controlling interests are the minority shareholders of the subsidiaries of PJSC “PhosAgro”
1 Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activities.
2 The Group received cash refund from depositories paid as dividends to parties who were entitled to receive them, but didn’t receive dividends due to reasons beyond the depositories’ control.
| Financial highlights | Financial highlights | Financial highlights | Financial highlights |
|---|---|---|---|
| (RUB mln) | 9M 2024 | 9M 2023 | Change % |
| Revenue | 371,035 | 328,885 | 12.8% |
| EBITDA* | 123,523 | 151,098 | -18.2% |
| Adj. EBITDA** | 122,412 | 131,274 | -6.8% |
| EBITDA margin | 33.3% | 45.9% | |
| Net profit | 64,817 | 56,775 | 14.2% |
| Adj. net profit*** | 72,986 | 82,896 | -12.0% |
| Free cash flow | 35,991 | 80,977 | -55.6% |
| 30.09.2024 | 31.12.2023 | ||
| Net debt | 272,686 | 223,207 | |
| ND/LTM EBITDA | 1.75x | 1.22x |
| Operating highlights | Operating highlights | Operating highlights | Operating highlights |
|---|---|---|---|
| Production volumes by category | Production volumes by category | Production volumes by category | Production volumes by category |
| kt | 9M 2024 | 9M 2023 | Change % |
| Mineral fertilizers and feed phosphates | Mineral fertilizers and feed phosphates | Mineral fertilizers and feed phosphates | Mineral fertilizers and feed phosphates |
| Phosphate-based fertilizers and feed phosphates | 6,655.0 | 6,396.3 | 4.0% |
| Nitrogen-based fertilizers | 1,902.6 | 1,959.1 | -2.9% |
| TOTAL fertilizers | 8,557.6 | 8,355.4 | 2.4% |
| Other products | Other products | Other products | Other products |
| Other products | 221.5 | 218.0 | 1.6% |
| TOTAL agrochemicals | 8,779.1 | 8,573.4 | 2.4% |
| Sales volumes by category | Sales volumes by category | Sales volumes by category | Sales volumes by category |
| kt | 9M 2024 | 9M 2023 | Change % |
| Phosphate-based fertilizers and feed phosphates | 6,985.7 | 6,594.8 | 5.9% |
| Nitrogen-based fertilizers | 1,878.1 | 1,908.6 | -1.6% |
| TOTAL fertilizers | 8,863.8 | 8,503.4 | 4.2% |
| Other products | 220.5 | 220.1 | 0.2% |
| TOTAL agrochemicals | 9,084.3 | 8,723.5 | 4.1% |
| | Nine months ended
30 September | Nine months ended
30 September | Three months ended
30 September | Three months ended
30 September |
| --- | --- | --- | --- | --- |
| RUB million | 2024 | 2023 | 2024 | 2023 |
| | | | | |
| Revenues | 371,035 | 328,885 | 129,472 | 116,133 |
| Cost of Group products sold | (218,561) | (171,699) | (72,268) | (59,885) |
| Cost of products for resale | (8,895) | (12,964) | (4,441) | (2,356) |
| | | | | |
| | | | | |
| Gross profit | 143,579 | 144,222 | 52,763 | 53,892 |
| | | | | |
| Administrative and selling expenses | (30,329) | (23,659) | (10,357) | (8,507) |
| Taxes, other than income tax | (11,280) | (9,219) | (3,695) | (3,209) |
| Other expenses, net | (7,481) | (4,152) | (2,537) | (2,082) |
| Foreign exchange gain from operating activities, net | 1,111 | 19,824 | 3,391 | 6,122 |
| | | | | |
| | | | | |
| Operating profit | 95,600 | 127,016 | 39,565 | 46,216 |
| | | | | |
| Finance income | 5,032 | 2,060 | 1,717 | 805 |
| Finance costs | (9,726) | (5,737) | (3,491) | (2,151) |
| Foreign exchange loss from financing activities, net | (9,280) | (45,945) | (24,394) | (17,968) |
| | | | | |
| | | | | |
| Profit before tax | 81,626 | 77,394 | 13,397 | 26,902 |
| | | | | |
| Income tax expense | (16,809) | (20,619) | (2,049) | (11,624) |
| | | | | |
| | | | | |
| Profit for the period | 64,817 | 56,775 | 11,348 | 15,278 |
| | | | | |
| Attributable to: | | | | |
| Shareholders of the Company | 64,814 | 56,756 | 11,341 | 15,262 |
| Non-controlling interests | 3 | 19 | 7 | 16 |
| | | | | |
| Basic and diluted earnings per share (in RUB) | 500 | 438 | 87 | 118 |
| | | | | |
| | | | | |
| Total comprehensive income for the period | 64,817 | 56,775 | 11,348 | 15,278 |
| | | | | |
| | | | | |
| Attributable to: | | | | |
| Shareholders of the Company | 64,814 | 56,756 | 11,341 | 15,262 |
| Non-controlling interests | 3 | 19 | 7 | 16 |
| | | | | |
| RUB million | 30 September
2024 | 31 December
2023 |
| --- | --- | --- |
| | | |
| Assets | | |
| Property, plant and equipment | 339,989 | 308,663 |
| Non-current spare parts | 12,750 | 8,059 |
| Advances issued for property, plant and equipment | 10,965 | 10,337 |
| Deferred tax assets | 9,460 | 9,751 |
| Right-of-use assets | 5,728 | 7,240 |
| Catalysts | 3,068 | 2,667 |
| Intangible assets | 2,505 | 2,773 |
| Other non-current assets | 1,182 | 8,262 |
| Investments in associates and joint ventures | 716 | 636 |
| | | |
| | | |
| Non-current assets | 386,363 | 358,388 |
| | | |
| | | |
| Trade and other receivables | 73,631 | 66,362 |
| Cash and cash equivalents | 69,796 | 29,163 |
| Inventories | 46,750 | 48,468 |
| Other short-term assets | 11,154 | 5,083 |
| VAT and other taxes receivable | 9,104 | 10,119 |
| Income tax receivable | 1,035 | 1,703 |
| Security payment for windfall tax | - | 6,355 |
| | | |
| | | |
| Current assets | 211,470 | 167,253 |
| | | |
| | | |
| Total assets | 597,833 | 525,641 |
| | | |
| | | |
| Equity | | |
| Share capital | 372 | 372 |
| Share premium | 7,494 | 7,494 |
| Retained earnings | 154,275 | 144,658 |
| Actuarial losses | (1,003) | (1,003) |
| | | |
| | | |
| Equity attributable to shareholders of the Company | 161,138 | 151,521 |
| Equity attributable to non-controlling interests | 116 | 84 |
| | | |
| | | |
| Total equity | 161,254 | 151,605 |
| | | |
| | | |
| Liabilities | | |
| Loans and borrowings | 184,897 | 161,710 |
| Deferred tax liabilities | 13,988 | 13,603 |
| Lease liabilities | 2,536 | 2,818 |
| Defined benefit obligations | 1,158 | 1,129 |
| | | |
| | | |
| Non-current liabilities | 202,579 | 179,260 |
| | | |
| | | |
| Loans and borrowings | 154,068 | 86,429 |
| Trade and other payables | 39,764 | 42,653 |
| Dividends payable | 35,053 | 54,919 |
| VAT and other taxes payable | 3,380 | 2,799 |
| Lease liabilities | 981 | 1,413 |
| Income tax payable | 754 | 208 |
| Windfall tax payable | - | 6,355 |
| | | |
| | | |
| Current liabilities | 234,000 | 194,776 |
| | | |
| | | |
| Total equity and liabilities | 597,833 | 525,641 |
| | | |
| | Nine months ended
30 September | Nine months ended
30 September |
| --- | --- | --- |
| RUB million | 2024 | 2023 |
| | | |
| Cash flows from operating activities | | |
| Operating profit | 95,600 | 127,016 |
| Adjustments for: | | |
| Depreciation and amortisation | 27,923 | 24,082 |
| (Gain)/loss on disposal of property, plant and equipment and intangible assets | (165) | 186 |
| | | |
| | | |
| Cash flows from operations before changes in working capital | 123,358 | 151,284 |
| Increase/(decrease) in trade and other payables1 | 888 | (9,821) |
| (Increase)/decrease in trade and other receivables1 | (9,207) | 16,783 |
| Increase in inventories, catalysts and non-current spare parts | (3,440) | (7,495) |
| | | |
| | | |
| Cash flows from operations before income tax and interest paid | 111,599 | 150,751 |
| Income tax paid | (14,919) | (24,345) |
| Finance costs paid | (9,224) | (5,254) |
| | | |
| | | |
| Cash flows from operating activities | 87,456 | 121,152 |
| | | |
| | | |
| Cash flows from investing activities | | |
| Finance income | 3,722 | 1,174 |
| Acquisition of property, plant and equipment and intangible assets | (54,673) | (40,158) |
| Loans issued | (2,525) | - |
| Borrowing cost capitalised paid | (2,848) | (1,246) |
| Advances issued for right-of-use assets | (135) | (94) |
| Other | 4,994 | 149 |
| | | |
| | | |
| Cash flows used in investing activities | (51,465) | (40,175) |
| | | |
| | | |
| Cash flows from financing activities | | |
| Proceeds from borrowings, net of transaction costs | 188,305 | 120,953 |
| Repayment of borrowings | (108,455) | (104,724) |
| Dividends paid to shareholders of the Company | (77,700) | (94,487) |
| Repayment of dividends previously refunded to shareholders of the Company | (188) | (75) |
| Refund of dividends paid2 | 2,854 | 14,791 |
| Dividends paid to non-controlling interests | - | (131) |
| Lease payments | (1,167) | (1,032) |
| | | |
| | | |
| Cash flows from/(used in) financing activities | 3,649 | (64,705) |
| | | |
| | | |
| Net increase in cash and cash equivalents | 39,640 | 16,272 |
| Cash and cash equivalents at 1 January | 29,163 | 13,356 |
| Effect of exchange rates fluctuations | 993 | 6,796 |
| | | |
| | | |
| Cash and cash equivalents at 30 September | 69,796 | 36,424 |
| | | |
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