Russia’s PhosAgro 2013 net profit down 65% on lower urea, DAP prices

17 April 2014 11:58 Source:ICIS News

LONDON (ICIS)--PhosAgro’s full-year 2013 net profit fell by 65% to Russian roubles (Rb) 8.6bn (€172m) on lower urea and diammonium phosphate (DAP) prices, the fertilizer producer said on Monday.

Sales remained almost flat at Rb104.6bn, 1% lower than in 2012, the Russian company said.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) also experienced a pronounced decrease at Rb23.9bn, a decrease of 31% compared to 2012.

Sales volumes increased in all business divisions but one, PhosAgro’s apatit mine and beneficiation plant, which saw a decrease of 15% in volumes to 3,912,000 tonnes, while the phosphate-based fertilizers business saw volumes up 10% to 4,672,000 tonnes.

Nitrogen-based fertilizers was the best performing division with a 15% increase in volumes to 1,262,000 tonnes.

“[In 2013] our sales remained relatively stable when FOB Tampa DAP prices dropped 23% from $488 per tonne at the beginning of the year to $378 at year-end, and bottomed out at just $343 per tonne in the middle of November after declining following the breakup of BPC (the minimum price seen since the 2009 financial crisis),” said PhosAgro’s CEO Andrey A Guryev.

“This brought most of our industry to below break-even levels in 4Q 2013. I am pleased, therefore, that we have managed to generate a 23% EBITDA margin in such challenging times, and to maintain almost 100% production capacity utilisation,” Guryev concluded.

For 2014, the company places many hopes in its new ammonia plant, which will bring costs down and ease the manufacturing of downstream fertilizers, “aimed at delivering any type of phosphate-based fertilizer to farmers in either concentrated or complex triple (NPK) and even quadruple (NPKS) nutrient form,” explained PhosAgro’s CEO.

(€1 = Rb50)

By Jonathan Lopez