REG-PhosAgro PJSC PhosAgro PJSC: PhosAgro Reports Operating and Financial Results for 9M 2022
03/11/2022 17:45
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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 ( 1 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:
2 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 (23,039) (690)
activities, net
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 61 -
loss of control over subsidiaries
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 12,079 13,237
equipment and other non-current assets
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 219,852 164,537
the Parent
Equity attributable to non-controlling 112 106
interests
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 260 147
other non-current assets
Operating profit before changes in working capital and 199,698 130,438
provisions
Increase in inventories, catalysts and non-current (9,955) (2,257)
spare parts
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 201,608 111,628
interest paid
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 (41,998) (31,681)
intangible assets
Cash and cash equivalents disposed as a result of loss (36,729) -
of control over subsidiaries
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 1,778 -
fair value through profit or loss
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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