Soaring ammonia and urea prices boost Qafco revenues

15 October 2012 18:21  [Source: ICIS news]

LONDON (ICIS)--Qatar Fertilizer Company (Qafco) enjoyed a strong performance in the first nine months of 2012 as soaring ammonia and urea prices and the launch of four new plants boosted revenues, parent Industries Qatar said on Monday.

The group said Qafco generated revenue of Qatari riyal (QR) 4.6bn ($1.26bn) in the nine months ending on 30 September, up by 44.5% on the same period in 2011, as it benefited from the launch earlier this year of two new ammonia and urea plants, Qafco V and Qafco VI.

Ammonia and urea volumes increased by 24.1% and 42.1% respectively, compared with the same period of 2011, due to the plants' start-up. Revenue jumped by QR500m quarter on quarter, mainly thanks to “a sharp increase in ammonia prices and incremental urea volumes from the initial ramp-up of Qafco V and VI".

In a statement to the country’s stock exchange, Industries Qatar said it was delighted with Qafco’s impressive performance and major income contribution, with the Doha-based subsidiary now responsible for more than a third of the group’s total net profit.

Abdulrahman Ahmad al-Shaibi, Industries Qatar’s chief coordinator, said Industries Qatar’s year-to-date net profit of QR6.7bn was “broadly in line with budgeted expectations and was primarily boosted by improved fertilizer volumes following the launch of Qafco V and VI".

He added: “The fertilizer segment is now the group’s main profit contributor, accounting for circa 40% of net profit and earnings before earnings before interest, taxes, depreciation, and amortisation (EBITDA).

“The projects' two ammonia and two urea trains are now in full operation, with closing utilisation rates varying across the four plants: the associated ammonia trains registered production utilisation rates of between 85% and 90%, and approximately 95% for the urea facilities.

“Expectations are that production volumes will continue to improve during the last quarter of 2012. The majority of the incremental fertilizer volumes were sold in two of the group's largest markets – North America and the Indian sub-continent – underscoring the importance of those regions.”

Global ammonia prices have soared to annual highs in recent weeks as strong demand from Asia and the US combines with natural gas curtailments in the key ammonia-producing region of Trinidad to push the benchmark Black Sea price to $650/tonne FOB (free on board) Yuzhny.

($1 = QR3.64)

By: Richard Ewing
+44 208 652 3214

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