REG-PJSC PhosAgro: PhosAgro 1Q18 Fertilizer Output Increases 18.5% YoY

PhosAgro PAOAnnouncement

26/04/2018 10:50

For Immediate Release   26 April 2018 

PhosAgro 1Q18 Fertilizer Output Increases 18.5% YoY

Moscow – PhosAgro (Moscow Exchange, LSE: PHOR), one of the world’s leading
vertically integrated phosphate-based fertilizer producers, announces its
operational results for the three months (1Q) ended 31 March 2018. Overall
fertilizer production for 1Q 2018 grew by 18.5% year-on-year and exceeded 2.3
million tonnes.

PhosAgro’s production and sales volumes are summarised in the tables below.

            Production volumes by type             
 (‘000 mt)              1Q 2018  1Q 2017  Chg y/y  
 Phosphate-based & MCP  1,757.2  1,573.6   11.7%   
 Nitrogen-based          560.8    382.6    46.6%   
 Total fertilizers      2,318.0  1,956.2   18.5%   
 PhosRock & nepheline   2,789.7  2,502.3   11.5%   
 Other products           42.9     28.8    49.0%   

   

               Sales volumes by type               
 (‘000 mt)              1Q 2018  1Q 2017  Chg y/y  
 Phosphate-based & MCP  1,753.0  1,533.2   14.3%   
 Nitrogen-based          652.0    460.5    41.6%   
 Total fertilizers      2,405.0  1,996.5   20.5%   
 PhosRock & nepheline    956.0    910.6     5.0%   
 Other products           56.0     36.0    55.6%   

Commenting on the 1Q 2018 operational results, PhosAgro CEO Andrey Guryev
said:

“I am very pleased that PhosAgro is off to a strong start for the year, with
a nearly 20% year-on-year increase in downstream production and a more than
10% year-on-year rise in upstream output. The impressive growth in our
downstream operations was provided by a nearly 50% year-on-year jump in the
production of nitrogen products after the launch of our new granulated urea
line in August 2017. Phosphate-based fertilizer production remained on a
growth trajectory as well, with a double-digit year-on-year increase. With the
solid operating performance PhosAgro delivered in the first quarter, we feel
comfortable confirming our annual production guidance of nearly 9 million
tonnes of finished products.

“As for production by key products, in 1Q 2018 the Company increased output
of its most marginal NPK(S) grades by 20% year-on-year to more than 0.8
million tonnes, while the share of complex fertilizers in the overall
phosphate basket reached nearly 50%. DAP production increased by a similar 20%
year-on-year. Looking at mid-stream products, we increased ammonia output by
80% to half a million tonnes after the launch of our new ammonia line in July
2017, while sulphuric acid output jumped by over 15% thanks to the
modernisation of existing units. Both of these are important parts of our
further vertical integration in key feedstocks.    

“PhosAgro’s geography of sales in 1Q 2018 saw nearly flat year-on-year
performance for the Russian market (affected by the cold weather in March),
while sales to our priority European and Latin American markets advanced by
55% and 24% year-on-year, respectively. In addition, our sales to North
America grew by almost 60% year-on-year to 0.4 million tonnes.

“Looking ahead to market conditions in 2Q 2018, we remain cautiously
optimistic on prices, despite the end of the high season and more phosphate
products becoming available for export from China. Our view is based on weak
import numbers in 1Q 2018 in Brazil (MAP imports were down by half
year-on-year), as well as subdued activity in mature markets like Europe and
the US due to cold weather, meaning additional demand is likely to appear in
the second quarter. These factors, coupled with seasonally high activity in
South Asia (India and Pakistan), the recent increase in phosphoric acid prices
by OCP and stabilisation in sulphur prices (which determine cash costs in
China) should help to absorb additional volumes from China and contributions
from the new unit that is expected from OCP in the second quarter.     

The table below provides a breakdown of production volumes by major product:

                Production volumes                 
 ('000 MT)              1Q 2018  1Q 2017  Chg y/y  
 Apatit mine and beneficiation plant               
 Phosphate rock         2,523.9  2,290.4   10.2%   
 Nepheline concentrate   265.8    211.9    25.4%   
 Phosphate-based fertilizers                       
 DAP/MAP                 798.1    751.9     6.1%   
 NPK                     646.6    532.5    21.4%   
 NPS                     132.7    115.8    14.6%   
 APP                      51.7     43.2    19.7%   
 MCP                      88.2     96.4    (8.5%)  
 PKS                      39.9     33.8    18.0%   
 Nitrogen-based fertilizers                        
 AN                      143.5    129.8    10.6%   
 Urea                    417.3    252.8    65.1%   
 Other products                                    
 STPP                     24.8     15.3    62.1%   
 Other                    18.1     13.5    34.1%   
 Feed stock                                        
 Ammonia                 496.1    279.3    77.6%   
 Phosphoric acid         656.1    596.4    10.0%   
 Sulphuric acid         1,483.9  1,284.3   15.5%   

The table below provides a breakdown of sales volumes by major product:

                   Sales volumes                   
 ('000 mt)              1Q 2018  1Q 2017  Chg y/y  
 Apatit mine and beneficiation plant               
 Phosphate rock          691.0    687.0     0.6%   
 Nepheline concentrate   265.0    223.6    18.5%   
 Phosphate-based fertilizers                       
 DAP/MAP                 809.0    733.9    10.2%   
 NPK                     647.0    502.1    28.9%   
 NPS                     136.0    118.9    14.4%   
 APP                      47.0     56.9   (17.4%)  
 MCP                      85.0     89.5    (5.0%)  
 PKS                      29.0     31.9    (9.1%)  
 Nitrogen-based fertilizers                        
 AN                      249.0    228.3     9.1%   
 Urea                    403.0    232.2    73.6%   
 Other products                                    
 STPP                     24.0     16.2    48.1%   
 Other                    32.0     19.8    61.6%   

* Excluding intra-group sales 

** Excluding feedstock

For further information please contact: 

PJSC PhosAgro
Alexander Seleznev, Head of Investor Relations
ir@phosagro.ru
+7 495 232 96 89 ex 21 87

Timur Belov, Press Officer
Anastacia Basos, Deputy Press Secretary
+7 495 232 9689

EM
Sam VanDerlip
vanderlip@em-comms.com
+44 7554 993 032
+7 499 918 3134

Notes to Editors

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 P(2)O(5)
content of not less than 39% (according to IFA, Fertecon and CRU).

PhosAgro’s main products include phosphate rock, over 35 grades of
fertilizers, feed phosphates, ammonia, and sodium tripolyphosphate, which are
used by customers in 100 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.



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