DJ PhosAgro PJSC: PhosAgro Reports Operating and Financial Results for 9M 2022
PhosAgro PJSC (PHOR) PhosAgro PJSC: PhosAgro Reports Operating and Financial Results for 9M 2022 03-Nov-2022 / 20:30 MSK Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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PhosAgro Reports Operating and Financial Results for 9M 2022
Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, today announces its consolidated IFRS financial results for the first nine months (9M) of 2022.
9M 2022 highlights:
In 9M 2022, mineral fertilizer production increased by 6.7% year-on-year to 8.1 million tonnes. This increase was made possible thanks to the smooth, uninterrupted operation of new production facilities launched as part of the Company's comprehensive long-term development programme.
Sales of mineral fertilizers in 9M 2022 increased by 6.8% year-on-year to more than 8.3 million tonnes. This growth was driven by an increase in production volumes and strong demand for fertilizers in Russian and global markets.
Revenue for 9M 2022 increased by 57.0% year-on-year to RUB 459.4 billion (USD 6.5 billion). The growth in revenue was the result of an increase in sales of end products, which was driven by higher output of mineral fertilizers. An extensive programme for the modernisation and construction of new production facilities enabled the Company to considerably improve the performance of its equipment.
The increase in revenue was also driven by higher average sales prices in world markets and a change in sales structure that favours high-margin fertilizers, which are in high demand among farmers.
In 9M 2022, adjusted EBITDA increased by 69.9% year-on-year to RUB 222.5 billion (USD 3.2 billion). EBITDA margin for the period rose to 48.4%.
In 9M 2022, adjusted free cash flow amounted to RUB 118.3 billion (USD 1.7 billion), up 115.2% year-on-year.
As of 30 September 2022, net debt had decreased by RUB 119.8 billion since the end of 2021, amounting to RUB 33.9 billion (USD 0.6 billion). The net debt / adjusted EBITDA ratio had decreased to 0.12x as of the end of 3Q 2022.
Financial and operating highlights
FINANCIAL HIGHLIGHTS
RUB mln 9M 9M Chng
2022 2021 %
Revenue 459,423 292,564 57.0%
EBITDA* 199,438 130,291 53.1%
Adj. EBITDA** 222,477 130,981 69.9%
Adj. EBITDA margin 48.4% 44.8%
Net profit 165,501 87,840 88.4%
Adj. net profit*** 150,199 85,755 75.1%
Free cash flow 81,539 54,952 48.4%
Adj. free cash flow**** 118,268 54,952 115.2%
30.09.2022 31.12.2021
Net debt 33,915 153,718
ND / adj. LTM EBITDA 0.12x 0.80x
Operating highlights
Production volumes by category
kt 9M 9M Chng
2022 2021 %
Phosphate-based & MCP 6,184.2 5,779.8 7.0%
Nitrogen-based fertilizers 1,875.4 1,770.6 5.9%
TOTAL fertilizers 8,059.6 7,550.4 6.7%
Sales volumes by category
kt 9M 9M Chng
2022 2021 %
Phosphate-based & MCP 6,390.0 5,858.7 9.1%
Nitrogen-based fertilizers 1,922.0 1,927.8 -0.3%
TOTAL fertilizers 8,312.1 7,786.5 6.8%
RUB/USD exchange rates: average rate for 9M 2022: 70.61; average rate for 9M 2021: 74.01; as of 30 September 2022: 57.41; as of 31 December 2021: 74.29.
* EBITDA is calculated as operating profit adjusted for depreciation and amortisation.
** Adj. EBITDA is EBITDA as reported minus FX differences from operating activities.
*** Adj. net profit is net profit as reported minus FX gain or loss.
**** Free cash flow adjusted for the amount of cash and cash equivalents written off as a result of the loss of ownership of foreign companies.
Maintaining a high level of creditworthiness and servicing its debt obligations on time continue to be priorities for the Company.
In the current situation, the Company is maintaining financial stability thanks to its high level of business efficiency and its balanced approach to the implementation of its investment programme for long-term development. This approach enables the Company to increase its profit margin and generate considerable free cash flow.
Among recent developments, the Company held a vote among the holders of all three of its Eurobond issues in order to make amendments to the issuance documentation. These amendments will enable the Company to continue reliably servicing its public debt, including by splitting payment flows between noteholders in Russian and foreign jurisdictions.
As of now, three coupon payments have already been made under the split-payment scheme, and the Company expects these payments to make it through international clearing systems to the final noteholders outside the Russian Federation.
Market highlights in 3Q and 9M 2022:
The situation in global mineral fertilizer markets in 3Q 2022 was influenced by divergent price trends. Prices for phosphate-based and potash fertilizers gradually declined due to their relatively low affordability compared with the prices of agricultural products. At the same time, prices for nitrogen-based fertilizers, including urea, followed a predominantly upward trend, partly due to the persistence of high energy prices and the consequent noticeable decrease in the production of these types of fertilizers, especially in Europe.
Average prices in 3Q 2022 remained above prices in the same period of 2021. The average price for urea was USD 538 per tonne (FOB Baltic), compared with USD 442 per tonne in 3Q 2021. The average price for MAP was USD 777 per tonne (FOB Baltic) in 3Q 2022, compared with USD 695 per tonne in 3Q 2021.
The prices for phosphate and potash feedstocks also remained high. The average price for potassium chloride in 3Q 2022 was USD 694 per tonne (FOB Baltic), compared with USD 277 per tonne in 3Q 2021. The average price for phosphate feedstocks in 3Q 2022 was USD 320 per tonne (FOB Morocco) (for feedstocks with P2O5 content of 31%-33%), compared with USD 149 per tonne in 3Q 2021.
Sulphur prices decreased in 3Q 2022, driven by increased export supplies from the Middle East and other exporting regions, amid reduced demand (especially from China) due to an off-season decline in production/consumption of phosphate-based fertilizers in the domestic market. The average price for sulphur in 3Q 2022 was USD 109 per tonne (FOB Baltic), compared with USD 181 per tonne in 3Q 2021.
Market outlook
Nitrogen-based fertilizer markets continue to demonstrate a high degree of price volatility, partly due to the persistence of high natural gas prices amid an expected increase in seasonal demand from key markets - India, South America and Europe.
The market for phosphate-based fertilizers in 4Q has traditionally been the off-season period in the Company's main sales regions, which may result in additional pressure on prices. However, the lack of large export volumes from China, due to ongoing export restrictions in favour of deliveries to the domestic market, will support global markets for phosphate-based fertilizers in general.
About the Company
PhosAgro (www.phosagro.ru) is a vertically integrated Russian company and one of the world's leading producers of mineral phosphorous fertilizers and of high-grade apatite concentrate grading 39% P2O5 and higher. PhosAgro's fertilizers are highly effective, ensuring the improved quality of agricultural produce and avoiding soil contamination by heavy metals.
PhosAgro Group is the largest manufacturer of phosphate-based fertilisers in Europe (by total capacity of NAP/MAP/NP /NPK/NPS production), the largest producer of phosphite grading 39% P2O5 in the world and one of the leading global producers of ammonium and diammonium phosphate, one of Europe's leading and the only producer in Russia of monocalcium phosphate feed, and the only producer in Russia of nepheline concentrate.
The company's main products, including phosphite, over 50 types of fertilizer, phosphate feed, ammonium, and sodium tripolyphosphate, are used in over 102 countries on all inhabited continents. Our priority markets, besides Russia and the CIS, are Latin America, Europe, and Asia.
The company's shares are listed on the Moscow Exchange and its Global Depositary Receipts (GDRs) are listed on the London Stock Exchange (MOEX and LSE ticker: PHOR).
More information about PhosAgro PJSC can be found on our site: www.phosagro.ru.
Nine months ended
30 September
RUB million 2022 2021
Revenues 459,423 292,564
Cost of Group products sold (201,268) (148,237)
Cost of products for resale (12,122) (7,584)
Gross profit 246,033 136,743
Administrative and selling overhead expenses (35,135) (19,772)
Taxes, other than income tax, net (8,087) (4,446)
Other expenses, net (2,985) (2,423)
Foreign exchange (loss)/profit from operating activities, net (23,039) (690)
Operating profit 176,787 109,412
Finance income 3,657 407
Finance costs (10,672) (3,914)
Foreign exchange gain from financing activities, net 38,341 2,775
COVID-19 related expenses - (350)
Profit before tax 208,113 108,330
Income tax expense (42,612) (20,490)
Profit/(loss) for the period 165,501 87,840
Attributable to:
Non-controlling interests* 6 (17)
Shareholders of the Parent 165,495 87,857
Basic and diluted earnings per share (in RUB) 1,278 678
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation difference (2,929) (453)
Foreign currency translation difference reclassified to profit or loss upon loss of control over (6,302) -
subsidiaries
Actuarial losses reclassified to profit or loss upon loss of control over subsidiaries 61 -
Other comprehensive (loss)/income for the period (9,170) (453)
Total comprehensive income/(loss) for the period 156,331 87,387
Attributable to:
Non-controlling interests* 6 (17)
Shareholders of the Parent 156,325 87,404
* Non-controlling interests are the minority shareholders of the subsidiaries of PJSC "PhosAgro"
RUB million 30 September 2022 31 December 2021
Assets
Property, plant and equipment 258,812 237,444
Advances issued for property, plant and equipment and other non-current assets 12,079 13,237
Other non-current assets 6,773 2,058
Deferred tax assets 6,617 9,499
Non-current spare parts 5,327 4,698
Right-of-use assets 3,932 6,955
Catalysts 1,970 2,049
Intangible assets 1,769 1,756
Investments in associates 602 569
Non-current assets 297,881 278,265
Cash and cash equivalents 106,929 21,710
Trade and other receivables 60,855 48,526
Inventories 36,683 41,177
Income tax receivable 9,406 540
VAT and other taxes receivable 9,237 15,013
Other financial assets 184 216
Current assets 223,294 127,182
Total assets 521,175 405,447
Equity
Share capital 372 372
Share premium 7,494 7,494
Retained earnings 212,678 148,193
Actuarial losses (692) (753)
Foreign currency translation reserve - 9,231
Equity attributable to shareholders of the Parent 219,852 164,537
Equity attributable to non-controlling interests 112 106
Total equity 219,964 164,643
Liabilities
Loans and borrowings 91,261 157,081
Deferred tax liabilities 24,403 12,937
Lease liabilities 1,607 3,459
Defined benefit obligations 765 952
Non-current liabilities 118,036 174,429
Dividends payable 101,012 2
Trade and other payables 30,293 41,754
Loans and borrowings 46,831 12,710
VAT and other taxes payable 3,798 6,397
Lease liabilities 1,145 2,178
Income tax payable 96 3,334
Current liabilities 183,175 66,375
Total equity and liabilities 521,175 405,447
Nine months ended
30 September
RUB million 2022 2021
Cash flows from operating activities
Operating profit 176,787 109,412
Adjustments for:
Depreciation and amortisation 22,651 20,879
Loss on disposal of property, plant and equipment and other non-current assets 260 147
Operating profit before changes in working capital and provisions 199,698 130,438
Increase in inventories, catalysts and non-current spare parts (9,955) (2,257)
Decrease/(increase) in trade and other receivables* 27,258 (15,835)
Decrease in trade and other payables* (15,393) (718)
Cash flows from operations before income taxes and interest paid 201,608 111,628
Income tax paid (38,391) (21,070)
Finance costs paid (3,820) (3,164)
Cash flows from operating activities 159,397 87,394
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets (41,998) (31,681)
Cash and cash equivalents disposed as a result of loss of control over subsidiaries (36,729) -
Loans issued (3,130) -
Borrowing cost capitalised paid (718) (906)
Advances issued for right-of-use assets (419) -
Finance income received 3,191 51
Proceeds from disposal of financial assets measured at fair value through profit or loss 1,778 -
Other 167 94
Cash flows used in investing activities (77,858) (32,442)
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs 31,082 53,296
Repayment of borrowings (22,293) (23,513)
Dividends paid to shareholders of the Parent - (22,728)
Lease payments (1,119) (1,457)
Cash flows from used financing activities 7,670 5,598
Net increase in cash and cash equivalents 89,209 60,550
Cash and cash equivalents at 1 January 21,710 8,460
Effect of exchange rates fluctuations (3,990) (1,021)
Cash and cash equivalents at 30 September 106,929 67,989
*Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activities
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ISIN: US71922G2093 Category Code: QRT TIDM: PHOR LEI Code: 25340053KRUNNYUWF472 Sequence No.: 198802 EQS News ID: 1479003 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
November 03, 2022 13:30 ET (17:30 GMT)
