PhosAgro ao

Earnings Release • Feb 13, 2025

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title: CONFIDENTIAL DRAFT NOT FOR RELEASE
author: Sam Vanderlip
date: 2025-02-13 13:35:00+00:00

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PhosAgro Reports Operating and Financial Results for FY 2024

Moscow – PhosAgro Group (“PhosAgro” or “the Company”) (Moscow Exchange, LSE: PHOR), a Russian vertically integrated company that includes one of the world’s leading phosphate-based fertilizer producers, today announces its operating results and consolidated financial results for the full year ended 31 December 2024.

FY 2024 highlights

In FY 2024, production of agrochemical products grew 4.3% year-on-year to 11.8 million tonnes, driven mainly by a 5.8% increase in the production of phosphate-based fertilizers and feed phosphates, to 8.9 million tonnes.

Total sales of agrochemical products in FY 2024 increased by 4.1% year-on-year to 11.9 million tonnes, while sales of phosphate-based fertilizers and feed phosphates rose 6.1%.

Revenue in FY 2024 amounted to RUB 507.7 billion, an increase of 15.3% year-on-year.

The Company’s EBITDA for FY 2024 amounted to RUB 177.0 billion, down 3.3% year-on-year.

Free cash flow for FY 2024 amounted to RUB 29.0 billion.

As of 31 December 2024, net debt amounted to RUB 325.4 billion, and the net debt/adjusted EBITDA ratio as of the end of the reporting period was a comfortable 1.84x.

Financial and operating highlights:

• EBITDA is calculated as operating profit adjusted for depreciation and amortization.

** 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.

Comments on 2024 financial performance

The Company’s revenue grew 15.3% year-on-year in FY 2024, driven primarily by increased production and sales of phosphate-based fertilizers (mainly NPK, which saw sales rise more than 18% year-on-year) and supported by a recovery from the beginning of the year in average sales prices in global markets and exchange rate dynamics.

The Company’s EBITDA for the full year amounted to RUB 177.0 billion, driven by increased sales and higher prices compared with the previous year. At the same time, EBITDA faced pressure from factors such as rising production costs owing to the payment of export duties introduced in 2023, increased consumption of raw materials and higher personnel costs.

EBITDA rose 9.3% quarter-on-quarter in 4Q 2024, reaching RUB 53.5 billion. In addition to increased sales revenue, another factor that had a positive impact on EBITDA was the reduction in export duties at the end of the quarter.

EBITDA margin for FY 2024 was 34.9%, 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 FY 2024 amounted to RUB 29.0 billion, impacted by a planned increase in capital expenditures (associated with the implementation of major investment projects), higher interest expense due to an increase in the Central Bank’s key rate, and cash outflows in the second half of the year to finance working capital (driven by increased shipments to Latin America and longer turnover periods for accounts receivable).

The rating agencies Expert RA and ACRA have assigned the Company their highest-possible credit rating (AAA), a testament to the Company’s solid financial position and its ability service all its debt obligations, including those denominated in foreign currencies, in full and on time.

As of the end of FY 2024, the Company’s debt position remained at a comfortable level. As of 31 December 2024, net debt amounted to RUB 325.4 billion. The increase in net debt during the fourth quarter was mainly due to a reduction in cash reserves following the Company’s year-end payment of declared dividends for 2Q and 3Q 2024. The net debt/EBITDA ratio as of the end of 2024 was 1.84x.

Events occurring after the reporting period that had an impact on the Company’s debt position include the redemption of a USD 500 million Eurobond issue in January 2025. The Company redeemed the bonds in full both domestically and internationally.

Despite the favourable terms available in debt financing markets, the Company plans to prioritize debt repayment this year over refinancing. This measure will help reduce future debt servicing costs and further solidify the Company’s position as a high-grade borrower with strong credit ratings.

Comments on 2024 operating performance

The output of agrochemical products increased by 4.3% in 2024, reaching 11.8 million tonnes, driven by the consistent implementation of the Company’s long-term programme, launched in 2019, to develop its production assets.

Phosphate-based fertilizers accounted for the bulk of the production increase (output of DAP/MAP rose 1.0%; NPK, 23.3%; and MCP, 10.0%). These growth figures were attributed to the fact that the Company’s Volkhov production plant reached its design capacity and to increased production of key feedstocks, such as phosphoric acid and sulphuric acid.

Sales of the Company’s agrochemical products rose 4.1% in 2024, driven by increased production, the strong performance of the Group’s sales network in the Russian market and the solid positions enjoyed by the Company’s products in global markets.

Sales growth was largely driven by a 6.1% year-on-year increase in sales of phosphate-based fertilizers, while the rapid growth in sales three-element fertilizers was due to an increase in sales of agrochemical products in the Company’s priority domestic market.

PhosAgro’s leading position in the Russian market enabled further growth in domestic fertilizer sales in 2024. As a result, total sales of agrochemical products to Russian farmers increased to 3.34 million tonnes.

The markets showing the highest growth rates in terms of shipments in 2024 were Russia, Latin America and Africa.

Fertilizer market in 4Q 2024

Price dynamics in global fertilizer markets were mixed throughout 4Q 2024: prices for phosphate-based and potash fertilizers remained stable, while prices for nitrogen-based fertilizers gradually declined due to oversupply.

Prices for phosphate-based fertilizers have remained stable since mid-2024. Seasonal demand from Latin American markets decreased but was offset by export restrictions in China, which are customary at this time of year. Critically low carryover stocks of DAP fertilizers in India prolonged import demand practically until the end of the year, despite unresolved issues with government support for importers (low subsidies).

The average price for MAP in 4Q 2024 was USD 582 per tonne (FOB Baltic). For the full year, the average price rose to USD 555 per tonne (FOB Baltic), up from USD 517 per tonne (FOB Baltic) in 2023, reflecting stronger demand growth relative to supply in the market for phosphate-based fertilizers throughout 2024.

Prices for nitrogen-based fertilizers in Q4 2024 faced pressure from excess supply in the market owing to the early end of seasonal demand in South America and weak seasonal activity in Europe. However, robust domestic urea sales in India and lower carryover stocks led to the announcement of major tenders late in the year, boosting optimism for market growth in late Q4 2024 and early 2025.

The average price of urea in 4Q 2024 was USD 319 per tonne (FOB Baltic). For the full year, the average price was USD 300 per tonne (FOB Baltic), down slightly from the 2023 average of USD 309 per tonne (FOB Baltic), reflecting a slight surplus in the market due in part to India’s reduced imports during the year and seasonal fluctuations in other markets.

Outlook for 1Q 2025

Growth in seasonal demand in Europe, Central America and North America will shape conditions in mineral fertilizer markets as a whole. Declining carryover stocks across all fertilizer types in India combined with a lack of Chinese exports will provide additional price support.

For further information, please contact:

PJSC PhosAgro

Andrey Serov, Head of the Investor Relations Department

+7 495 231 2747 ext. 2183

ir@phosagro.ru

Timur Belov, Press Officer

+7 495 231 2747 ext. 2652

pr@phosagro.ru

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% (according to the IFA). 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, according to the CRU), the largest global producer of high-grade phosphate rock with P2O5 content of 39% (according to the IFA), 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 around 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).

*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)	FY 2024	FY 2023	Change, %
Revenue	507,689	440,304	15.3%
EBITDA*	177,005	183,038	-3.3%
Adj. EBITDA**	170,553	168,352	1.3%
EBITDA margin	34.9%	41.6%
Net profit	84,469	86,141	-1.9%
Adj. net profit***	100,372	104,105	-3.6%
Free cash flow	28,986	70,208	-58.7%
	31.12.2024	31.12.2023
Net debt	325,356	223,207
ND/LTM EBITDA	1.84x	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	FY 2024	FY 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	8,874.2	8,388.7	5.8%
Nitrogen-based fertilizers	2,593.2	2,605.3	-0.5%
TOTAL fertilizers	11,467.4	10,994.0	4.3%
Other products	301.7	286.0	5.5%
TOTAL agrochemicals	11,769.1	11,280.0	4.3%
Sales volumes by category	Sales volumes by category	Sales volumes by category	Sales volumes by category
kt	FY 2024	FY 2023	Change, %
Phosphate-based fertilizers and feed phosphates	9,104.7	8,578.2	6.1%
Nitrogen-based fertilizers	2,499.6	2,560.5	-2.4%
TOTAL fertilizers	11,604.3	11,138.7	4.2%
Other products	294.4	287.0	2.6%
TOTAL agrochemicals	11,898.7	11,425.7	4.1%

RUB million	2024	2023
Revenues	507,689	440,304
Cost of Group products sold	(293,484)	(235,560)
Cost of products for resale	(12,675)	(16,056)
Gross profit	201,530	188,688
Administrative and selling expenses	(41,620)	(32,282)
Taxes, other than income tax	(15,489)	(12,779)
Other expenses, net	(10,414)	(7,557)
Foreign exchange gain from operating activities, net	6,452	14,686
Operating profit	140,459	150,756
Finance income	6,497	3,353
Finance costs	(15,694)	(7,881)
Gain from revaluation of investments in equity instruments measured at fair value through profit or loss	137	1,025
Foreign exchange loss from financing activities, net	(22,355)	(32,650)
Profit before tax	109,044	114,603
Income tax expense	(24,575)	(28,462)
Profit for the year	84,469	86,141
Attributable to:
Shareholders of the Company	84,430	86,084
Non-controlling interests*	39	57
Basic and diluted earnings per share (in RUB)	652	665
Other comprehensive income/(loss)
Items that will never be reclassified to profit or loss
Actuarial gains/(losses)	132	(35)
Other comprehensive income/(loss) for the year	132	(35)
Total comprehensive income for the year	84,601	86,106
Attributable to:
Shareholders of the Company	84,562	86,049
Non-controlling interests*	39	57

| RUB million | 31 December
2024 | 31 December
2023 |
| --- | --- | --- |
|   | | |
| Assets | | |
| Property, plant and equipment | 357,577 | 308,663 |
| Deferred tax assets | 14,081 | 9,751 |
| Non-current spare parts | 13,564 | 8,059 |
| Advances issued for property, plant and equipment | 8,818 | 10,140 |
| Right-of-use assets | 6,419 | 7,240 |
| Intangible assets | 2,991 | 2,773 |
| Catalysts | 2,987 | 2,667 |
| Other non-current assets | 1,310 | 8,262 |
| Investments in associates and joint ventures | 715 | 636 |
|   | | |
|   | | |
| Non-current assets | 408,462 | 358,191 |
|   | | |
|   | | |
| Trade and other receivables | 104,653 | 66,274 |
| Inventories | 56,105 | 48,468 |
| Cash and cash equivalents | 10,398 | 29,163 |
| VAT and other taxes receivable | 9,628 | 7,611 |
| Other short-term assets | 3,125 | 5,083 |
| Income tax receivable | 99 | 1,703 |
| Security payment for windfall tax | - | 6,355 |
|   | | |
|   | | |
| Current assets | 184,008 | 164,657 |
|   | | |
|   | | |
| Total assets | 592,470 | 522,848 |
|   | | |
|   | | |
| Equity | | |
| Share capital | 372 | 372 |
| Share premium | 7,494 | 7,494 |
| Retained earnings | 157,590 | 144,658 |
| Actuarial losses | (871) | (1,003) |
|   | | |
|   | | |
| Equity attributable to shareholders of the Company | 164,585 | 151,521 |
| Equity attributable to non-controlling interests | 137 | 84 |
|   | | |
|   | | |
| Total equity | 164,722 | 151,605 |
|   | | |
|   | | |
| Liabilities | | |
| Loans and borrowings | 169,962 | 161,710 |
| Deferred tax liabilities | 17,031 | 13,603 |
| Lease liabilities | 3,056 | 2,818 |
| Defined benefit obligations | 1,029 | 1,129 |
|   | | |
|   | | |
| Non-current liabilities | 191,078 | 179,260 |
|   | | |
|   | | |
| Loans and borrowings | 161,661 | 86,429 |
| Trade and other payables | 48,394 | 40,705 |
| Dividends payable | 19,779 | 54,919 |
| Income tax payable | 3,128 | 208 |
| VAT and other taxes payable | 2,633 | 1,954 |
| Lease liabilities | 1,075 | 1,413 |
| Windfall tax payable | - | 6,355 |
|   | | |
|   | | |
| Current liabilities | 236,670 | 191,983 |
|   | | |
|   | | |
| Total equity and liabilities | 592,470 | 522,848 |
|   | | |

RUB million	2024	2023
Cash flows from operating activities
Operating profit	140,459	150,756
Adjustments for:
Depreciation and amortisation	36,546	32,282
(Gain)/loss on disposal of property, plant and equipment and intangible assets	(70)	365
Cash flows from operations before changes in working capital	176,935	183,403
(Increase)/decrease in trade and other receivables1	(45,712)	6,063
Increase in inventories, catalysts and non-current spare parts	(13,263)	(11,624)
Increase/(decrease) in trade and other payables1	10,380	(46)
Cash flows from operations before income tax and interest paid	128,340	177,796
Income tax paid	(20,953)	(29,777)
Finance costs paid	(14,670)	(7,378)
Windfall tax security payment	-	(6,355)
Cash flows from operating activities	92,717	134,286
Cash flows from investing activities
Finance income	4,958	2,000
Acquisition of property, plant and equipment and intangible assets	(75,152)	(64,232)
Borrowing cost capitalised paid	(4,702)	(1,896)
Loans issued	(2,577)	43
Advances issued for right-of-use assets	(136)	(94)
Other	13,878	101
Cash flows used in investing activities	(63,731)	(64,078)
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs	212,336	172,906
Repayment of borrowings	(154,961)	(155,306)
Dividends paid to shareholders of the Company	(109,169)	(94,487)
Repayment of dividends previously refunded to shareholders of the Company	(587)	(182)
Refund of dividends paid2	3,132	17,416
Dividends paid to non-controlling interests	-	(131)
Lease payments	(1,448)	(1,416)
Cash flows used in financing activities	(50,697)	(61,200)
Net (decrease)/increase in cash and cash equivalents	(21,711)	9,008
Cash and cash equivalents at 1 January	29,163	13,356
Effect of exchange rates fluctuations	2,946	6,799
Cash and cash equivalents at 31 December	10,398	29,163