LONDON (ICIS)--Grupa Azoty swung to a net loss in the third quarter, year on year, on the back of higher natural gas and petrochemical feedstock prices, the Polish chemicals and fertilizers major said on Thursday.
|Polish zloty (Zl)||Q3 2018||Q3 2017||Change|
- Gas prices rose 50% during the third quarter, year on year, undermining Azoty’s fertilizers division as natural gas is a major feedstock.
- The company said it had faced strong pressure from imported rival fertilizers on the Polish market across the quarter.
- It added that, on the back of cost pressures, it had hiked fertilizers prices up to 20% in some cases.
- The higher price of oil translated into more expensive petrochemical feedstock prices, said Azoty, noting it faced substantial price gains in benzene and phenol.
- Azoty’s chemical business’ third-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to Zl 31m, down sharply from the Zl 84m posted in the third quarter of 2017.
- The company attributed the fall to higher gas prices and more costly raw materials used by the oxo-alcohols segment.
- The $269m acquisition of German specialty fertilizers firm Compo Expert, completed in the third quarter, provides the potential to deliver a sharp increase in group revenues, the company said.
- Investor in Grupa Azoty, however, are less convinced and the company’s market capitalisation has fallen sharply in the past months.
- Chemical equity analysts have said the Azoty’s refusal to disclose Compo Expert’s debt had the potential to affect investors’ perception.
Pictured: Polish currency; Azoty blamed
higher feedstock prices for the third-quarter
Source: Thomas Schneider/imageBROKER/REX/Shutterstock
($1 = Zl 3.75)