Poland's ZAP revises up full-year forecasts

27 August 2008 15:34  [Source: ICIS news]

PRAGUE (ICIS news)--Poland's Zaklady Azotowe Pulawy (ZAP) cited “remarkable fertilizer price increases” in revising upwards its forecast net profit for the 2007/2008 fiscal year, it said on Wednesday.

It was now expecting to post a full-year bottom line of zloty (Zl) 330.8m ($145.7m/€99.6m), rather than the target of Zl299m announced in April, which would be an improvement of around three times on the net profit recorded for the 2006/2007 fiscal.

Looking at its fourth quarter to June 2008, ZAP said the best price increases were obtained for urea ammonium nitrate (UAN), ammonium sulphate, urea and ammonium nitrate fertiliser products.

These went up by 35%, 49%, 24% and 26%, respectively, compared with the year-earlier period. Overall fertilizer sales grew by by Zl 51.7m, a rise of more than 15%. 

“The market conditions, especially the conditions on the fertilizer market, have translated into a record-high financial performance for ZAP,” it said said in a press release.

Biofuel production demands and rising food prices were among the key factors persuading farmers to grow more crops and order more fertilisers, ZAP added.

Urea prices reached their all-time high at the end of the fourth quarter following the Chinese decision to introduce a 135% tax rate on export duties in order to rechannel supply into the home market, it also noted.

“In the short term, the prices of urea will be driven by the Russian government’s decision to levy export taxes on domestically produced nitrogen fertiliser,” it added.

Another Polish fertiliser producer, Zaklady Chemiczne Police (ZchP) also saw “very high dynamics in the sale of fertilisers both in Poland and on foreign markets,” it said in a press release.

“We had a dynamic increase in sales revenue of 83.8% during April to June of this year and this was principally a result of very big demand for fertilizers, the sale of which increased by more than 80% in the second quarter,” said ZchP.

($1 = Zl2.27/€1 = Zl3.32)

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By: Will Conroy
+44 20 8652 3214

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