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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.

 

 

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
2022

9M
2021

Chng
%

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
2022

9M
2021

Chng
%

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
2022

9M
2021

Chng
%

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 subsidiaries

(6,302)

-

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


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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