Russian Acron’s first-quarter net profits double, expansion continues

06 June 2011 17:53  [Source: ICIS news]

LONDON (ICIS)--Acron's first-quarter net profits more than doubled to roubles (Rb) 3.81bn ($137m) year on year, underpinned by a stronger rouble in 2010 and strong prices for fertilizer commodities, the Russian fertilizer producer said on Monday.    

Revenue for the quarter was Rb13.86bn, marking a 21% increase from the same period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) reached Rb4.6bn, up by 93% year on year. The EBITDA margin was up by 33% from the first quarter of 2010. 

Net debt for the first quarter of 2011 decreased by 10% to Rb25.74bn, Acron said in a statement.

“At 33%, the higher EBITDA margin reflects our efficient operations and shows promise for the sector as a whole,” said Alexander Popov, chairman of the board of directors.

“We can see the global fertilizer market on the upswing: demand exceeds supply, meaning that producers will be able to maintain high capacity utilisation rates and positive pricing dynamics for their products.”

In addition, fertilizer industry insiders say Acron is actively pursuing expansion plans.

Acron recently had representatives in Saskatchewan province, Canada, reportedly viewing its potash mineral licences in the area. Other producers predict Acron will sell off the rights in Canada and instead opt to focus on its potash development project in Russia.

Acron’s subsidiary, Verkhnekamsk Potash Co, was established in 2006 to secure potash for Acron’s NPK fertilizer production. The mine at this location will come on line in 2016 and is designed to have an eventual capacity of 2m tonnes/year.

Acron’s desire for self-sufficiency in the potash sector also prompted it to lodge a complaint against the combination of potash giant Uralkali with its smaller competitor, Silvinit, earlier this year.

The Russian Antimonopoly Service approved the merger in April, making Uralkali the largest potash producer by capacity at around 13m tonnes/year.

However, this position will soon be eclipsed by the capacity expansion efforts of Canada’s Potash Corporation of Saskatchewan which will bring its capacity to 17.1m tonnes by 2015.

($1 = Rb27.77)

For more information on potash and fertilizers, visit ICIS Pricing Fertilizers



By: Lauren Williamson
+44 (0) 20 8652 3214

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