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PhosAgro Reports 3Q and 9M 2020 Financial Results: EBITDA Margin at 38%, Free Cash Flow up More Than 5x to RUB 19 bln

·23-min read

OJSC PhosAgro (PHOR)
09-Nov-2020 / 09:30 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

 

 

 

 

PhosAgro Reports 3Q and 9M 2020 Financial Results:

EBITDA Margin at 38%, Free Cash Flow up More Than 5x to RUB 19 bln

 

Moscow - PhosAgro ("the Company") (Moscow Exchange and LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, today announces its interim consolidated IFRS financial results for 3Q and 9M 2020.  

 

Highlights for 3Q and 9M 2020

 

Revenue in 3Q 2020 increased by 10.0% year-on-year to RUB 71.0 billion (USD 965 million) due to increased sales of fertilizers in key markets and rouble exchange rate fluctuation.

 

Revenue for 9M 2020 was relatively unchanged year-on-year at RUB 195.0 billion (USD 2.8 billion). The Company managed to maintain revenues in line with the previous year despite lower average sales prices for phosphate-based and nitrogen fertilizers in 2020.

 

In 3Q 2020, the Company's EBITDA increased by 27.0% year-on-year to RUB 27.1 billion (USD 368 million) thanks to an increase in fertilizer sales at a time when global raw materials prices were lower. EBITDA margin increased by 5 pp to 38.1%.

 

EBITDA for 9M 2020 increased by 2.3% year-on-year to RUB 65.9 billion (USD 928 million). EBITDA margin was 33.8%.

 

The Company's free cash flow in 3Q 2020 increased more than fivefold year-on-year to RUB 19.4 billion (USD 264 million). This considerable increase was due to higher sales and more efficient management of working capital.

 

Free cash flow reached RUB 39.7 billion (USD 567 million) for 9M 2020, an increase of 21.8% year-on-year.

 

Net profit for 9M 2020, adjusted for the effect of currency exchange differences, was RUB 39.3 billion (USD 557 million), up 13.8% year-on-year.

 

As of 30 September 2020, net debt amounted to RUB 149.9 billion (USD 1.9 billion), and net debt/EBITDA as of the end 3Q was 1.95x, remaining stable over the past several quarters.

 

Financial and operational highlights:

RUB/USD rates: average 3Q 2020 rate: 73.6; average 3Q 2019 rate: 64.6; as of 30 September 2020: 79.7; as of 30 September 2019: 64.4

*EBITDA is calculated as operating profit adjusted for depreciation and amortisation.

**Net profit as reported minus FX gain or loss.

 

Commenting on the Company's financial results, PhosAgro CEO Andrey Guryev said:

 

"In the third quarter, we delivered further growth in our financial results. PhosAgro's revenue and EBITDA increased year-on-year on the back of higher production volumes, while global prices for key raw materials remained low. As a result, EBITDA margin exceeded 38%.

 

"Efficient management of working capital and the sell-down of product inventories enabled us to achieve significant growth in terms of free cash flow, which exceeded RUB 19 billion, a more than fivefold increase from the same period last year.

 

"The Company's debt burden remained at a consistently comfortable level below 2x net debt/EBITDA. Capital investment in the first nine months of 2020 amounted to 42% of EBITDA, which is even slightly below internal targets.  

 

"Looking at our outlook on market developments, I think that the markets look balanced at the moment, and this balance may be maintained during the fourth quarter. Slower seasonal demand in South Asia and Latin America is likely to be offset by rising imports in the United States, Western Europe and Africa, while exports from China will remain limited."  

 

Commenting on the Company's performance, Xavier Rolet, Chairman of PhosAgro's Board of Directors, said:

 

"I have been a member of PhosAgro's Board of Directors for more than two years, and last year I was elected Chairman. Throughout this entire time, I have witnessed the efforts that the Company has undertaken in terms of its sustainable development and reducing its environmental impact, and these efforts are bearing fruit. In November 2020, as part of its regular review, Sustainalytics changed the Company's ESG risk rating from 43.5 to 26.9. This is one of the best ESG risk ratings the agency has given to large Russian companies or to fertilizer producers globally.

 

"Speaking of the Company's development, I would like to reflect on our main achievements in terms of the implementation of our Strategy to 2025. During 2020, PhosAgro successfully completed construction and fully ramped up a new high-quality ammonium sulphate line in Cherepovets, which has already led to a decrease in external purchases and to higher profitability for complex fertilizers. Until the year end, we also plan to launch a new granulated MAP production line at the Volkhov (Metachem) plant, which will mean that the implementation of our Strategy to 2025 is proceeding according to plan.

 

"I would also note that at last Friday's meeting of the Board of Directors we approved PhosAgro's financial statements for 9M 2020. Taking into account the strong financial results, we decided to recommend that the General Meeting of Shareholders approve a dividend payment in the amount of RUB 41 per GDR for 3Q 2020."

 

3Q 2020 market conditions

 

In 3Q 2020, the phosphate fertilizer market was characterised by an upward price trend due to the following factors:

 

 

As a result, DAP/MAP prices increased in 3Q 2020 from USD 285-300 per tonne to USD 332-343 per tonne (FOB Baltic). The average price of DAP/MAP in 3Q 2020 was USD 314 per tonne (FOB Baltic), compared with USD 297 per tonne in 2Q 2020.

 

Nitrogen fertilizer markets were also dominated by upward trends due to the increase in seasonal demand for urea in key sales markets like India, Brazil and other Latin American countries, as well as stable demand for ammonium nitrate in Russia's domestic market. The average price for prilled urea in 3Q 2020 was USD 233 per tonne (FOB Baltic), compared with USD 209 per tonne in 2Q 2020. The average price for ammonium nitrate in 3Q 2020 was USD 160 per tonne (FOB Baltic), compared with USD 155 per tonne in 2Q 2020.

 

Commercial ammonia prices were under pressure due to weak off-season demand in key sales markets and low world prices for natural gas. The average price for ammonia in 3Q 2020 was USD 178 per tonne (FOB Baltic), compared with USD 201 per tonne (FOB) in 2Q 2020.

 

No significant changes were noted during 3Q 2020 in the principal sulphur and phosphate rock markets: prices remained stable within the range of USD 37-50 per tonne (FOB Black Sea) for sulphur and within USD 75-90 (FOB Morocco) for phosphate raw materials.

 

3Q and 9M 2020 financial performance

 

In 3Q 2020, revenue increased by 10.0% year-on-year to RUB 71.0 billion (USD 965 million), driven by a 9.9% increase in sales and the 14.3% devaluation of the rouble. However, lower prices for phosphate-based and nitrogen fertilizers on a year-on-year basis (down 3.9% and 5.9%, respectively) limited revenue growth.

 

Revenue for 9M 2020 remained steady year-on-year and amounted to RUB 195.0 billion (USD 2.8 billion). This was achieved despite the fact that the average sales prices for phosphate-based and nitrogen fertilizers in 2020 were lower year-on-year by 18.9% and 10.7%, respectively. The main revenue drivers were 10.1% sales growth and the 8.7% devaluation of the rouble year-on-year.

Throughout the first nine months of 2020, the Company enjoyed a strong increase in export sales of fertilizers. Export sales volumes rose by 11.8% year-on-year. This was achieved, to a great extent, thanks to the Company's robust sales system and the high quality of its fertilizers. Sales volumes were also boosted by favourable weather conditions, the affordability of fertilizers for end users and the temporary halt in fertilizer production in India and China in the spring due to the introduction of restrictive measures in connection with the coronavirus pandemic. All these factors enabled PhosAgro to increase sales volumes in its priority markets of Latin America and Europe. At the same time, sales volumes in the Company's domestic market also increased by 6.4% thanks to the growth of the entire agricultural sector in the Russian Federation.

 

Gross profit in 3Q 2020 increased by 19.8% year-on-year and amounted to RUB 35.2 billion (USD 478 million). The gross profit margin was 49.6%. Gross profit and gross profit margin in the phosphate-based and nitrogen fertilizer segments saw the following changes:

 

 

The Company's EBITDA for 3Q 2020 increased by 27.0% year-on-year and amounted to RUB 27.1 billion (USD 368 million).

 

Despite the fact that the prices for phosphate-based and nitrogen fertilizers in the third quarter of this year were lower compared with the same period last year, EBITDA margin increased to 38%. The increase in EBITDA margin was due to the improved operating efficiency of production facilities, a decrease in global prices for basic raw materials and an increase in sales volumes.

 

Net profit (adjusted for non-cash FX items) for 3Q 2020 increased by 53.4% year-on-year to RUB 18.1 billion (USD 246 million).

 

In 3Q 2020, free cash flow increased more than fivefold year-on-year to RUB 19.4 billion (USD 264 million). This considerable growth was possible because of the Company's high EBITDA margin, sales growth and efficient management of working capital.

 

Capital expenditures in 3Q 2020 amounted to RUB 8.8 billion (USD 120 million), which corresponds to 33% of EBITDA for the reporting period. The Company invested predominantly in the development of its resource and raw material production in Kirovsk, modernisation of mineral fertilizer production and rail infrastructure in Cherepovets, creation of a flexible ammonium sulphate production line in Balakovo, as well as the construction of new capacities at the Volkhov production site, the launch of which is planned for the second half of November 2020.

 

As of 30 September 2020, the net debt/EBITDA ratio was 1.95x. The increase (compared with 31 December 2019) was due to the devaluation of the rouble against the US dollar in March 2020, since a large part of the Company's loan portfolio is denominated in US dollars. Net debt as of 30 September 2020 amounted to RUB 149.9 billion (USD 1.9 billion).

 

 

 

 

 

Despite a considerable increase in fertilizer production, cost of sales in 3Q 2020 increased only slightly, by 1.8% year-on-year, to RUB 35.8 billion (USD 487 million).

 

 

A moderate increase of 2.0% in the cost of phosphate rock transport, to RUB 2.4 billion (USD 33 million), helped constrain the increase in the cost of materials and services. The main factor was an increase in PhosAgro's own rolling stock, but the impact was limited due to a 3.5% increase in tariffs and an increase in the volume of phosphate rock transported to the Company's plants.

 

Maintenance costs declined due to ongoing equipment upgrades and the improved efficiency of maintenance work.

 

 

Administrative expenses increased by 6.6% year-on-year in 3Q 2020 to RUB 4.1 billion (USD 56 million) mainly as a result of a 16.4% increase in payroll and social security expenses to RUB 2.6 billion (USD 36 million) due to an increase in the number of employees and the motivational payouts.

 

In 3Q 2020, selling expenses increased by 10.7% year-on-year to RUB 9.9 billion (USD 135 million). The main driver of growth was a 19.6% increase in freight, port and stevedoring costs to RUB 4.9 billion (USD 66 million) due to a 14.1% increase in export sales and the 14.3% devaluation of the rouble. However, an 11% decrease in freight tariffs constrained the growth in costs.

 

Market outlook

 

Phosphate-based fertilizer markets are expected to remain balanced in the short term. A decrease in seasonal demand in South Asia (India/Pakistan) and Latin America may be offset by an increase in imports to the United States, Western Europe and Africa. China remains focused on supplying its domestic market. In India, contracts have been signed for the supply of phosphoric acid from Morocco with a price increase of USD 64 to USD 689 per tonne of P2O5 (CFR India), according to CRU. This, combined with the strengthening of the market for phosphate-based fertilizers, may have a positive impact on prices for phosphate raw materials.

 

Nitrogen fertilizer prices may be seeing a correction following the main season in India and Brazil, but increased demand from the European, US and Central American markets may restrain the downward trend.

 

Conference call and webcast:

 

PhosAgro will hold a conference call and webcast today at 14:00 London time (17:00 in Moscow; 09:00 in New York).

 

The call will be held in English, with simultaneous translation into Russian on a separate line.

 

Webcast link:

https://www.webcast-eqs.com/phosagro20201109

 

Participant dial-in numbers:

 

Russian Federation Toll  +7 495 213 1767
Russian Federation Toll-Free  8 800 500 9283
United Kingdom Toll  +44 (0)330 336 9125
United Kingdom Toll-Free 0800 358 6377
United States Toll-Free  +1 313-209-6672
United States Toll  800-458-4148

 

Conference ID numbers:

 

English conference ID: 7891365
Russian conference ID: 9153081

 

Contacts

 

PJSC PhosAgro

Andrey Serov, Head of the Investor Relations Department

+7 495 232 9689 ext. 2187

ir@phosagro.ru

 

Timur Belov, Press Officer

+7 495 232 9689 ext. 2652

pr@phosagro.ru

 

EM

Sam VanDerlip

vanderlip@em-comms.com

+44 207 002 7859

 

About PhosAgro

 

PhosAgro (www.phosagro.ru) is one of the world's leading vertically integrated phosphate-based fertilizer producers in terms of production volumes of phosphate-based fertilizers and high-grade phosphate rock with a P2O5 content of 39% and higher. PhosAgro's environmentally friendly fertilizers stand out for their high efficiency, and they do not lead to the contamination of soils with heavy metals.

 

The Company is the largest phosphate-based fertilizer producer in Europe (by total combined capacity for DAP/MAP/NP/NPK/NPS), the largest producer of high-grade phosphate rock with a P2O5 content of 39%, a top-three producer of MAP/DAP globally, one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia, and Russia's only producer of nepheline concentrate (according to the RAFP).

 

PhosAgro's main products include phosphate rock, over 50 grades of fertilizers, feed phosphates, ammonia, and sodium tripolyphosphate, which are used by customers in 102 countries spanning all of the world's inhabited continents. The Company's priority markets outside of Russia and the CIS are Latin America, Europe and Asia.

 

PhosAgro's shares are traded on the Moscow Exchange, and global depositary receipts (GDRs) for shares trade on the London Stock Exchange (under the ticker PHOR). Since 1 June 2016, the Company's GDRs have been included in the MSCI Russia and MSCI Emerging Markets indexes.

 

More information about PhosAgro can be found on the website: www.phosagro.ru.

 

PJSC "PhosAgro" Consolidated Interim Condensed Statements of Profit or Loss and Other Comprehensive Income for the three and nine months ended 30 September 2020 (unaudited)

 

 

 

PJSC "PhosAgro" Consolidated Interim Condensed Statement of Financial Position as at 30 September 2020 (unaudited)

 

 

 

PJSC "PhosAgro" Consolidated Interim Condensed Statement of Cash Flows for the nine months ended 30 September 2020 (unaudited)

 


For Immediate Release

9 November 2020

FINANCIAL HIGHLIGHTS

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Revenue

194,988

194,983

0.0%

70,992

64,550

10.0%

EBITDA*

65,897

64,396

2.3%

27,054

21,301

27.0%

EBITDA margin

33.8%

33.0%

0.8 pp

38.1%

33.0%

5.1 pp

Net income

3,958

42,707

-90.7%

-1,333

9,762

n/a

Adj. net income**

39,311

34,534

13.8%

18,095

11,797

53.4%

Free cash flow

39,665

32,564

21.8%

19,391

3,605

437.9%

 

 

 

 

30.09.2020

31.12.2019

 

Net debt

 

 

 

149,939

131,583

 

ND/LTM EBITDA

 

 

 

1.95x

1.74x

 

Sales, ths tonnes

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Phosphate-based fertilizers

6,124

5,517

11.0%

2,247

1,959

14.7%

Nitrogen fertilizers

1,776

1,660

7.0%

470

512

-8.3%

Total sales

7,900

7,177

10.1%

2,717

2,471

9.9%

Cost of Sales

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng,%

Amortisation

18,721

16,126

16.1%

6,498

5,457

19.1%

Materials and services

31,701

31,257

1.4%

11,366

11,127

2.1%

Phosphate rock transport

6,682

6,685

-0.0%

2,446

2,399

2.0%

Repair expenses

7,380

7,756

-4.8%

2,613

3,009

-13.2%

Drilling and blasting costs

2,380

1,645

44.7%

891

650

37.1%

Other materials and services

15,259

15,171

0.6%

5,416

5,069

6.8%

Raw materials

27,871

33,705

-17.3%

9,568

11,150

-14.2%

Ammonia

3,480

2,922

19.1%

1,213

898

35.1%

Sulphur and sulph. acid

3,459

7,852

-55.9%

1,201

2,217

-45.8%

Potassium

9,811

10,727

-8.5%

3,785

4,205

-10.0%

Natural gas

9,875

9,655

2.3%

2,954

3,079

-4.1%

Ammonium sulphate

1,246

2,549

-51.1%

415

751

-44.7%

Salaries and social contributions

10,910

9,574

14.0%

3,796

3,267

16.2%

Electricity

4,919

4,765

3.2%

1,683

1,495

12.6%

Fuel

2,970

3,730

-20.4%

923

1,076

-14.2%

Products for resale

6,630

5,467

21.3%

1,968

1,602

22.8%

Total

103,722

104,624

-0.9%

35,802

35,174

1.8%

Administrative and selling expenses

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Administrative expenses

12,941

11,818

9.5%

4,139

3,883

6.6%

Salaries and social contributions

8,376

6,935

20.8%

2,648

2,275

16.4%

Professional services

1,285

1,267

1.4%

332

388

-14.4%

Amortisation

1,019

1,036

-1.6%

341

325

4.9%

Other

2,261

2,580

-12.4%

818

895

-8.6%

Selling and marketing expenses

28,978

27,797

4.2%

9,929

8,969

10.7%

Freight, port and stevedoring expenses

13,949

12,914

8.0%

4,865

4,069

19.6%

Russian Railways' tariffs and operators' fees

8,741

8,827

-1.0%

2,818

2,720

3.6%

Salaries and social contributions

2,318

1,954

18.6%

736

631

16.6%

Material and services

1,810

1,871

-3.3%

661

817

-19.1%

Customs duties

1,037

1,440

-28.0%

471

428

10.0%

Amortisation

1,123

791

42.0%

378

304

24.3%

 

 

Nine months ended

30 September

 

Three months ended

30 September

 

 

2020

 

2019

 

2020

 

2019

 

 

RUB million

 

RUB million

 

RUB million

 

RUB million

Revenues

 

194,988

 

194,983

 

70,992

 

64,550

Cost of sales

 

(103,722)

 

(104,624)

 

(35,802)

 

(35,174)

Gross profit

 

91,266

 

90,359

 

35,190

 

29,376

 

 

 

 

 

 

 

 

 

Administrative expenses

 

(12,941)

 

(11,818)

 

(4,139)

 

(3,883)

Selling expenses

 

(28,978)

 

(27,797)

 

(9,929)

 

(8,969)

Taxes, other than income tax, net

 

(2,339)

 

(1,611)

 

(756)

 

(744)

Other expenses, net

 

(1,974)

 

(2,690)

 

(529)

 

(565)

Operating profit

 

45,034

 

46,443

 

19,837

 

15,215

 

 

 

 

 

 

 

 

 

Finance income

 

576

 

1,377

 

223

 

212

Finance costs

 

(4,357)

 

(3,439)

 

(1,484)

 

(1,152)

Foreign exchange (loss)/gain, net

 

(35,353)

 

8,173

 

(19,428)

 

(2,035)

COVID-19 related expenses

 

(844)

 

-

 

(555)

 

-

Profit/(loss) before tax

 

5,056

 

52,554

 

(1,407)

 

12,240

 

 

 

 

 

 

 

 

 

Income tax (expense)/benefit

 

(1,098)

 

(9,847)

 

74

 

(2,478)

Profit/(loss) for the period

 

3,958

 

42,707

 

(1,333)

 

9,762

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

      Non-controlling interests ^

 

(6)

 

37

 

(13)

 

19

      Shareholders of the Parent

 

3,964

 

42,670

 

(1,320)

 

9,743

 

 

 

 

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

 

 

 

Foreign currency translation difference

 

3,571

 

(617)

 

2,037

 

353

Other comprehensive income/(loss) for the period

 

3,571

 

(617)

 

2,037

 

353

Total comprehensive income for the period

 

7,529

 

42,090

 

704

 

10,115

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

      Non-controlling interests ^

 

(6)

 

37

 

(13)

 

19

      Shareholders of the Parent

 

7,535

 

42,053

 

717

 

10,096

Basic and diluted earnings/(loss) per share (in RUB)

 

31

 

329

 

(10)

 

75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 September 2020

 

31 December 2019

 

 

 

RUB million

 

RUB million

Assets

 

 

 

 

 

Property, plant and equipment

 

 

206,582

 

199,459

Advances issued for property, plant and equipment

 

 

15,569

 

13,006

Right-of-use assets

 

 

7,671

 

6,891

Catalysts

 

 

2,329

 

2,376

Intangible assets

 

 

1,483

 

1,567

Investments in associates

 

 

570

 

519

Deferred tax assets

 

 

12,170

 

8,214

Other non-current assets

 

 

1,359

 

1,636

Non-current assets

 

 

247,733

 

233,668

 

 

 

 

 

 

Other current investments

 

 

239

 

251

Inventories

 

 

27,150

 

29,405

Trade and other receivables

 

 

30,644

 

31,061

Cash and cash equivalents

 

 

15,408

 

8,236

Current assets

 

 

73,441

 

68,953

Total assets

 

 

321,174

 

302,621

 

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

 

 

372

 

372

Share premium

 

 

7,494

 

7,494

Retained earnings

 

 

92,096

 

111,054

Actuarial losses

 

 

(689)

 

(689)

Foreign currency translation reserve

 

 

10,807

 

7,236

Equity attributable to shareholders of the Parent

 

 

110,080

 

125,467

Equity attributable to non-controlling interests

 

 

134

 

170

Total equity

 

 

110,214

 

125,637

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Loans and borrowings

 

 

146,267

 

96,736

Lease liabilities

 

 

4,401

 

4,701

Defined benefit obligations

 

 

919

 

857

Deferred tax liabilities

 

 

10,772

 

10,278

Non-current liabilities

 

 

162,359

 

112,572

 

 

 

 

 

 

Loans and borrowings

 

 

12,504

 

36,839

Lease liabilities

 

 

2,175

 

1,543

Trade and other payables

 

 

33,922

 

26,030

Current liabilities

 

 

48,601

 

64,412

Total equity and liabilities

 

 

321,174

 

302,621

 

 

 

Nine months ended 30 September

 

 

 

2020

 

2019

 

 

 

 

RUB million

 

RUB million

 

Cash flows from operating activities

 

 

 

 

 

 

Operating profit

 

 

45,034

 

46,443

 

Adjustments for:

 

 

 

 

 

 

Depreciation and amortisation

 

 

20,863

 

17,953

 

Loss on disposal of property, plant and equipment and intangible assets

 

 

62

 

705

 

Operating profit before changes in working capital and provisions

 

 

65,959

 

65,101

 

Decrease in inventories and catalysts

 

 

2,648

 

1,669

 

Decrease in trade and other receivables

 

 

3,601

 

6,670

 

Increase/(decrease) in trade and other payables

 

 

1,421

 

(1,183)

 

Cash flows from operations before income taxes and interest paid

 

 

73,629

 

72,257

 

Income tax paid

 

 

(3,990)

 

(8,998)

 

Finance costs paid

 

 

(2,396)

 

(2,132)

 

Cash flows from operating activities

 

 

67,243

 

61,127

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Acquisition of property, plant and equipment and intangible assets

 

 

(27,360)

 

(28,336)

 

Loans repaid/(issued), net

 

 

162

 

(68)

 

Proceeds from disposal of property, plant and equipment

 

 

16

 

64

 

Finance income received

 

 

493

 

575

 

Other payments

 

 

(889)

 

(798)

 

Cash flows used in investing activities

 

 

(27,578)

 

(28,563)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from borrowings, net of transaction costs of RUB 170 million

 

 

47,829

 

27,654

 

Repayment of borrowings

 

 

(62,026)

 

(33,992)

 

Early eurobond partial redemption fees

 

 

(292)

 

-

 

Dividends paid to shareholders of the Parent

 

 

(18,774)

 

(25,252)

 

Dividends paid to non-controlling interests

 

 

(30)

 

(36)

 

Leases paid

 

 

(1,492)

 

(1,452)

 

Proceeds from settlement of derivatives, net

 

 

-

 

112

 

Cash flows used in financing activities

 

 

(34,785)

 

(32,966)

 

Net increase/(decrease) in cash and cash equivalents

 

 

4,880

 

(402)

 

Cash and cash equivalents at 1 January

 

 

8,236

 

9,320

 

Effect of exchange rates fluctuations

 

 

2,292

 

(1,049)

 

Cash and cash equivalents at 30 September

 

 

15,408

 

7,869

 

 

 

 

 

 

 

 

For Immediate Release

9 November 2020

FINANCIAL HIGHLIGHTS

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Revenue

194,988

194,983

0.0%

70,992

64,550

10.0%

EBITDA*

65,897

64,396

2.3%

27,054

21,301

27.0%

EBITDA margin

33.8%

33.0%

0.8 pp

38.1%

33.0%

5.1 pp

Net income

3,958

42,707

-90.7%

-1,333

9,762

n/a

Adj. net income**

39,311

34,534

13.8%

18,095

11,797

53.4%

Free cash flow

39,665

32,564

21.8%

19,391

3,605

437.9%

 

 

 

 

30.09.2020

31.12.2019

 

Net debt

 

 

 

149,939

131,583

 

ND/LTM EBITDA

 

 

 

1.95x

1.74x

 

Sales, ths tonnes

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Phosphate-based fertilizers

6,124

5,517

11.0%

2,247

1,959

14.7%

Nitrogen fertilizers

1,776

1,660

7.0%

470

512

-8.3%

Total sales

7,900

7,177

10.1%

2,717

2,471

9.9%

Cost of Sales

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng,%

Amortisation

18,721

16,126

16.1%

6,498

5,457

19.1%

Materials and services

31,701

31,257

1.4%

11,366

11,127

2.1%

Phosphate rock transport

6,682

6,685

-0.0%

2,446

2,399

2.0%

Repair expenses

7,380

7,756

-4.8%

2,613

3,009

-13.2%

Drilling and blasting costs

2,380

1,645

44.7%

891

650

37.1%

Other materials and services

15,259

15,171

0.6%

5,416

5,069

6.8%

Raw materials

27,871

33,705

-17.3%

9,568

11,150

-14.2%

Ammonia

3,480

2,922

19.1%

1,213

898

35.1%

Sulphur and sulph. acid

3,459

7,852

-55.9%

1,201

2,217

-45.8%

Potassium

9,811

10,727

-8.5%

3,785

4,205

-10.0%

Natural gas

9,875

9,655

2.3%

2,954

3,079

-4.1%

Ammonium sulphate

1,246

2,549

-51.1%

415

751

-44.7%

Salaries and social contributions

10,910

9,574

14.0%

3,796

3,267

16.2%

Electricity

4,919

4,765

3.2%

1,683

1,495

12.6%

Fuel

2,970

3,730

-20.4%

923

1,076

-14.2%

Products for resale

6,630

5,467

21.3%

1,968

1,602

22.8%

Total

103,722

104,624

-0.9%

35,802

35,174

1.8%

Administrative and selling expenses

RUB million

9M
2020

9M
2019

Chng, %

3Q

2020

3Q

2019

Chng, %

Administrative expenses

12,941

11,818

9.5%

4,139

3,883

6.6%

Salaries and social contributions

8,376

6,935

20.8%

2,648

2,275

16.4%

Professional services

1,285

1,267

1.4%

332

388

-14.4%

Amortisation

1,019

1,036

-1.6%

341

325

4.9%

Other

2,261

2,580

-12.4%

818

895

-8.6%

Selling and marketing expenses

28,978

27,797

4.2%

9,929

8,969

10.7%

Freight, port and stevedoring expenses

13,949

12,914

8.0%

4,865

4,069

19.6%

Russian Railways' tariffs and operators' fees

8,741

8,827

-1.0%

2,818

2,720

3.6%

Salaries and social contributions

2,318

1,954

18.6%

736

631

16.6%

Material and services

1,810

1,871

-3.3%

661

817

-19.1%

Customs duties

1,037

1,440

-28.0%

471

428

10.0%

Amortisation

1,123

791

42.0%

378

304

24.3%

 

 

Nine months ended

30 September

 

Three months ended

30 September

 

 

2020

 

2019

 

2020

 

2019

 

 

RUB million

 

RUB million

 

RUB million

 

RUB million

Revenues

 

194,988

 

194,983

 

70,992

 

64,550

Cost of sales

 

(103,722)

 

(104,624)

 

(35,802)

 

(35,174)

Gross profit

 

91,266

 

90,359

 

35,190

 

29,376

 

 

 

 

 

 

 

 

 

Administrative expenses

 

(12,941)

 

(11,818)

 

(4,139)

 

(3,883)

Selling expenses

 

(28,978)

 

(27,797)

 

(9,929)

 

(8,969)

Taxes, other than income tax, net

 

(2,339)

 

(1,611)

 

(756)

 

(744)

Other expenses, net

 

(1,974)

 

(2,690)

 

(529)

 

(565)

Operating profit

 

45,034

 

46,443

 

19,837

 

15,215

 

 

 

 

 

 

 

 

 

Finance income

 

576

 

1,377

 

223

 

212

Finance costs

 

(4,357)

 

(3,439)

 

(1,484)

 

(1,152)

Foreign exchange (loss)/gain, net

 

(35,353)

 

8,173

 

(19,428)

 

(2,035)

COVID-19 related expenses

 

(844)

 

-

 

(555)

 

-

Profit/(loss) before tax

 

5,056

 

52,554

 

(1,407)

 

12,240

 

 

 

 

 

 

 

 

 

Income tax (expense)/benefit

 

(1,098)

 

(9,847)

 

74

 

(2,478)

Profit/(loss) for the period

 

3,958

 

42,707

 

(1,333)

 

9,762

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

      Non-controlling interests ^

 

(6)

 

37

 

(13)

 

19

      Shareholders of the Parent

 

3,964

 

42,670

 

(1,320)

 

9,743

 

 

 

 

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

 

 

 

Foreign currency translation difference

 

3,571

 

(617)

 

2,037

 

353

Other comprehensive income/(loss) for the period

 

3,571

 

(617)

 

2,037

 

353

Total comprehensive income for the period

 

7,529

 

42,090

 

704

 

10,115

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

      Non-controlling interests ^

 

(6)

 

37

 

(13)

 

19

      Shareholders of the Parent

 

7,535

 

42,053

 

717

 

10,096

Basic and diluted earnings/(loss) per share (in RUB)

 

31

 

329

 

(10)

 

75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 September 2020

 

31 December 2019

 

 

 

RUB million

 

RUB million

Assets

 

 

 

 

 

Property, plant and equipment

 

 

206,582

 

199,459

Advances issued for property, plant and equipment

 

 

15,569

 

13,006

Right-of-use assets

 

 

7,671

 

6,891

Catalysts

 

 

2,329

 

2,376

Intangible assets

 

 

1,483

 

1,567

Investments in associates

 

 

570

 

519

Deferred tax assets

 

 

12,170

 

8,214

Other non-current assets

 

 

1,359

 

1,636

Non-current assets

 

 

247,733

 

233,668

 

 

 

 

 

 

Other current investments

 

 

239

 

251

Inventories

 

 

27,150

 

29,405

Trade and other receivables

 

 

30,644

 

31,061

Cash and cash equivalents

 

 

15,408

 

8,236

Current assets

 

 

73,441

 

68,953

Total assets

 

 

321,174

 

302,621

 

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

 

 

372

 

372

Share premium

 

 

7,494

 

7,494

Retained earnings

 

 

92,096

 

111,054

Actuarial losses

 

 

(689)

 

(689)

Foreign currency translation reserve

 

 

10,807

 

7,236

Equity attributable to shareholders of the Parent

 

 

110,080

 

125,467

Equity attributable to non-controlling interests

 

 

134

 

170

Total equity

 

 

110,214

 

125,637

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Loans and borrowings

 

 

146,267

 

96,736

Lease liabilities

 

 

4,401

 

4,701

Defined benefit obligations

 

 

919

 

857

Deferred tax liabilities

 

 

10,772

 

10,278

Non-current liabilities

 

 

162,359

 

112,572

 

 

 

 

 

 

Loans and borrowings

 

 

12,504

 

36,839

Lease liabilities

 

 

2,175

 

1,543

Trade and other payables

 

 

33,922

 

26,030

Current liabilities

 

 

48,601

 

64,412

Total equity and liabilities

 

 

321,174

 

302,621

 

 

 

Nine months ended 30 September

 

 

 

2020

 

2019

 

 

 

 

RUB million

 

RUB million

 

Cash flows from operating activities

 

 

 

 

 

 

Operating profit

 

 

45,034

 

46,443

 

Adjustments for:

 

 

 

 

 

 

Depreciation and amortisation

 

 

20,863

 

17,953

 

Loss on disposal of property, plant and equipment and intangible assets

 

 

62

 

705

 

Operating profit before changes in working capital and provisions

 

 

65,959

 

65,101

 

Decrease in inventories and catalysts

 

 

2,648

 

1,669

 

Decrease in trade and other receivables

 

 

3,601

 

6,670

 

Increase/(decrease) in trade and other payables

 

 

1,421

 

(1,183)

 

Cash flows from operations before income taxes and interest paid

 

 

73,629

 

72,257

 

Income tax paid

 

 

(3,990)

 

(8,998)

 

Finance costs paid

 

 

(2,396)

 

(2,132)

 

Cash flows from operating activities

 

 

67,243

 

61,127

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Acquisition of property, plant and equipment and intangible assets

 

 

(27,360)

 

(28,336)

 

Loans repaid/(issued), net

 

 

162

 

(68)

 

Proceeds from disposal of property, plant and equipment

 

 

16

 

64

 

Finance income received

 

 

493

 

575

 

Other payments

 

 

(889)

 

(798)

 

Cash flows used in investing activities

 

 

(27,578)

 

(28,563)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from borrowings, net of transaction costs of RUB 170 million

 

 

47,829

 

27,654

 

Repayment of borrowings

 

 

(62,026)

 

(33,992)

 

Early eurobond partial redemption fees

 

 

(292)

 

-

 

Dividends paid to shareholders of the Parent

 

 

(18,774)

 

(25,252)

 

Dividends paid to non-controlling interests

 

 

(30)

 

(36)

 

Leases paid

 

 

(1,492)

 

(1,452)

 

Proceeds from settlement of derivatives, net

 

 

-

 

112

 

Cash flows used in financing activities

 

 

(34,785)

 

(32,966)

 

Net increase/(decrease) in cash and cash equivalents

 

 

4,880

 

(402)

 

Cash and cash equivalents at 1 January

 

 

8,236

 

9,320

 

Effect of exchange rates fluctuations

 

 

2,292

 

(1,049)

 

Cash and cash equivalents at 30 September

 

 

15,408

 

7,869

 

 

 

 

 

 

 

 

ISIN:

US71922G2093

Category Code:

QRT

TIDM:

PHOR

LEI Code:

25340053KRUNNYUWF472

OAM Categories:

2.2. Inside information

Sequence No.:

87432

EQS News ID:

1146380


 

End of Announcement

EQS News Service

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