REG-PJSC PhosAgro: PhosAgro 2017 Fertilizer Output Exceeds 8.3 mln t <Origin Href="QuoteRef">PHOR.MM</Origin>

PhosAgro PAOAnnouncement

05/02/2018 08:05

For Immediate Release   5 February 2018 

PhosAgro 2017 Fertilizer Output Exceeds 8.3 mln t

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 (4Q) and full year (FY) ended 31
December 2017. Overall fertilizer production for 4Q and FY 2017 grew by more
than 13% and 12% year-on-year to 2.3 and more than 8.3 million tonnes,
respectively.

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

                          Production volumes by type                           
 (‘000 mt)              4Q 2017  4Q 2016  Chg y/y   FY 2017  FY 2016  Chg y/y  
 Phosphate-based & MCP  1,692.3  1,582.1    7.0%    6,606.2  5,929.9   11.4%   
 Nitrogen-based          561.5    406.1    38.3%    1,734.6  1,495.0   16.0%   
 Total fertilizers      2,253.8  1,988.2   13.4%    8,340.8  7,424.9   12.3%   
 PhosRock & nepheline   2,641.0  2,456.6    7.5%   10,538.4  9,488.3   11.1%   
 Other products           30.4     36.2    -16.0%    119.9    138.9    -13.7%  

   

                            Sales volumes by type                             
 (‘000 mt)              4Q 2017  4Q 2016  Chg y/y  FY 2017  FY 2016  Chg y/y  
 Phosphate-based & MCP  1,599.1  1,418.1   12.8%   6,489.0  5,829.2   11.3%   
 Nitrogen-based          410.7    327.3    25.5%   1,615.8  1,394.0   15.9%   
 Total fertilizers      2,009.8  1,745.4   15.1%   8,104.8  7,223.2   12.2%   
 PhosRock & nepheline   1,000.2   838.4    19.3%   3,734.0  3,418.0    9.2%   
 Other products           73.2     50.2    45.8%    204.3    190.2     7.4%   

Commenting on the 4Q 2017 operational results, PhosAgro CEO Andrey Guryev
said:

“I am very pleased that PhosAgro has entered 2018 in good shape, having
passed major milestones in 2017. We continue to leverage our experience with
successful organic growth, which remains the most cost-effective development
option available to PhosAgro. It has enabled the Company to sustain its
leadership position on the cash cost curve in our sector, and to be well
positioned to benefit from the ongoing recovery in fertilizer prices. Last but
not least, in 2017 we finalised the construction of our two major investment
projects: the ammonia and granulated urea units in Cherepovets. Both
facilities are running close to full capacity now, and produced more than 360
and 200 thousand tonnes of ammonia and granulated urea, respectively, in 2017.

“As for production milestones, in 2017 the Company increased output of
phosphate-based fertilizers by more than 10% year-on-year and achieved the new
absolute record of 6.6 million tonnes. The most profitable NPK/NPS/PKS
products now account for half of our phosphate-based portfolio. Production of
nitrogen fertilizers grew by 16% year-on-year and exceeded 1.7 million tonnes.
Finally, in the upstream division we managed to produce more than 9.5 million
tonnes of phosphate rock, which is the highest level in the last 25 years.  

“Our sales strategy, which is based on the principle of ‘moving closer to
our end customers’ is also a cornerstone of our long-term strategy. In 2017
we managed to increase the share of direct sales to more than 90%. On top of
this, we continued to achieve double-digit growth in our priority markets. In
2017, we managed to increase overall sales to Russia and the CIS by almost 20%
year-on-year, to 3.1 million tonnes; sales in Europe grew by 30% year-on-year
to 1.8 million tonnes and Latin American sales were up by 16% year-on-year to
1.6 million tonnes.

“Looking ahead to market conditions in 2018, we remain optimistic on price
dynamics on the back of several factors: a likely decrease in exports from
China due to the spike in coal prices, tighter environmental regulation and
the potential launch of the 5.5 million tonnes strategic spring stockpiling
programme; a substantial decrease in stocks in India; and healthy demand in
Latin America, coupled with the closure of the Plant City facility by Mosaic.
We believe that the recovery in phosphate prices that kicked off in 4Q 2017,
driven by inflation in the main feedstock prices (ammonia and sulphur), should
continue through the beginning of the spring season for key markets.”

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

                              Production volumes                              
       ('000 MT)        4Q 2017  4Q 2016  Chg y/y  FY 2017  FY 2016  Chg y/y  
 Apatit mine and beneficiation plant                                          
 Phosphate rock         2,379.2  2,239.3    6.2%   9,540.3  8,530.2   11.8%   
 Nepheline concentrate   261.8    217.3    20.5%    998.1    958.1     4.2%   
 Phosphate-based fertilizers                                                  
 DAP/MAP                 729.7    746.9    -2.3%   3,004.0  2,768.9    8.5%   
 NPK                     692.9    588.0    17.8%   2,566.5  2,060.0   24.6%   
 NPS                     134.9    104.8    28.7%    423.4    512.4    -17.4%  
 APP                      40.0     40.0     0.0%    155.4    138.8    12.0%   
 MCP                      78.3     83.8    -6.6%    354.4    338.6     4.7%   
 PKS                      16.5     13.3    24.1%     99.8     85.1    17.3%   
 SOP                      0.0      5.3    -100.0%    2.7      26.1    -89.7%  
 Nitrogen-based fertilizers                                                   
 AN                      140.8    137.5     2.4%    496.4    458.9     8.2%   
 Urea                    420.7    268.6    56.6%   1,238.2  1,036.1   19.5%   
 Other products                                                               
 AlF3                     12.1     11.6     4.3%     47.0     46.0     2.2%   
 STPP                     18.3     24.6    -25.6%    72.9     92.9    -21.5%  
 Feed stock                                                                   
 Ammonia                 503.4    314.1    60.3%   1,454.9  1,198.6   21.4%   
 Phosphoric acid         591.6    591.0     0.1%   2,469.2  2,261.5    9.2%   
 Sulphuric acid         1,390.4  1,275.3    9.0%   5,437.8  4,926.1   10.4%   

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

                                Sales volumes                                 
 ('000 mt)              4Q 2017  4Q 2016  Chg y/y  FY 2017  FY 2016  Chg y/y  
 Apatit mine and beneficiation plant                                          
 Phosphate rock          734.1    608.5    20.6%   2,732.2  2,448.3   11.6%   
 Nepheline concentrate   266.1    229.9    15.7%   1,001.8   969.7     3.3%   
 Phosphate-based fertilizers                                                  
 DAP/MAP                 695.8    637.6     9.1%   2,963.9  2,696.4    9.9%   
 NPK                     570.5    502.9    13.4%   2,488.8  2,043.5   21.8%   
 NPS                     199.9    151.8    31.7%    409.8    517.3    -20.8%  
 APP                      35.2     19.9    76.9%    170.7    115.4    47.9%   
 MCP                      90.0     92.7    -2.9%    350.4    338.5     3.5%   
 PKS                      7.8      7.8      0.0%    101.2     90.1    12.3%   
 SOP                      0.0      5.4    -100.0%    4.2      28.0    -85.0%  
 Nitrogen-based fertilizers                                                   
 AN                       76.7     65.9    16.4%    476.0    375.5    26.8%   
 Urea                    334.0    261.4    27.8%   1,139.8  1,018.5   11.9%   
 Other products                                                               
 AlF3                     13.1     12.2     7.4%     49.4     46.0     7.4%   
 STPP                     20.9     19.8     5.6%     81.1     96.1    -15.6%  

* 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).

The Company is the largest phosphate-based fertilizer producer in Europe, the
largest producer of high-grade phosphate rock (with a P(2)O(5) content of not
less than 37%) worldwide and the third largest MAP/DAP producer in the world
(excluding China), according to IFA. PhosAgro is also one of the leading
producers of feed phosphates (MCP) in Europe, and the only producer in Russia.
PhosAgro is Russia’s only producer of nepheline concentrate.

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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