Jordan’s APC January-September profits up 44% on higher potash pricing

LONDON (ICIS)–Arab Potash Company’s January-September net profit after tax, provisions, and royalties jumped 44% on the back of stronger muriate of potash (MOP) pricing, the Jordanian fertilizer producer said on Wednesday.

Arab Potash Company	Jan-Sept 2018	Jan-Sept 2017	Change
Sales (JD)	350m	312m	12%
Net profit (JD)	89m	62m	44%
MOP sales volumes (tonnes)	1.8m	1.75m	3%

(JD1 = $1.41; Sales of JD350 equates $494m)

Key points:

– Arab Potash said stronger potash pricing around the world had contributed to improved net profit.

– Key India and China long-term import contracts, which settled at $290/tonne CFR (cost and freight), a $50/tonne and $60/tonne increase, respectively, had positively contributed.

Outlook:

– Plans to undertake maintenance at its Dead Sea facilities; aims to expand its operations into the Dead Sea’s Lisan region.

– “The company’s plans in finding alternatives to expensive energy sources contributed in reducing production costs significantly… Production costs are among the highest when compared with other international producers, despite efforts over the past years to reduce production costs,” it said.

– Warned of potential bearish pressure on potash pricing in 2019 as additional MOP capacity comes online which could “accordingly affect APC’s profit margin.”