REG-PJSC PhosAgro: PhosAgro Fertilizer Output up 19% y-o-y in 3Q 2017 <Origin Href="QuoteRef">PHOR.MM</Origin>

PhosAgro PAOAnnouncement

01/11/2017 09:26

For Immediate Release   1 November 2017 

PhosAgro Fertilizer Output up 19% y-o-y in 3Q 2017

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 (3Q) and nine months (9M) ended 30
September 2017. Overall fertilizer production for 3Q and 9M 2017 grew by
almost 19% and 12% year-on-year to nearly 2.1 and 6.1 million tonnes,
respectevely.

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

                          Production volumes by type                          
 (‘000 mt)              3Q 2017  3Q 2016  Chg y/y  9M 2017  9M 2016  Chg y/y  
 Phosphate-based & MCP  1,683.6  1,453.1   15.9%   4,913.9  4,347.8   13.0%   
 Nitrogen-based          405.5    307.5    31.9%   1,173.1  1,088.9    7.7%   
 Total fertilizers      2,089.1  1,760.6   18.7%   6,087.0  5,436.7   12.0%   
 PhosRock & nepheline   2,668.1  2,327.8   14.6%   7,897.4  7,031.7   12.3%   
 Other products           35.1     33.9     3.5%     89.5    102.7   (12.9%)  

   

                            Sales volumes by type                             
 (‘000 mt)              3Q 2017  3Q 2016  Chg y/y  9M 2017  9M 2016  Chg y/y  
 Phosphate-based & MCP  1,715.8  1,557.7   10.1%   4,889.8  4,411.1   10.9%   
 Nitrogen-based          309.4    280.0    10.5%   1,205.1  1,066.7   13.0%   
 Total fertilizers      2,025.2  1,837.7   10.2%   6,094.9  5,477.8   11.3%   
 PhosRock & nepheline    901.4    873.0     3.3%   2,733.8  2,579.6    6.0%   
 Other products           56.0     36.6    53.0%    131.1    140.0    (6.4%)  

Commenting on the 3Q 2017 operational results, PhosAgro CEO Andrey Guryev
said:

“PhosAgro’s position as one of the world’s leading phosphate-based
producers in terms of cash costs has been further strengthened by our
continuous focus on vertical integration and efficiency, as well as the
ramp-up of the new ammonia unit. This has enabled us to deliver sustainable,
record high operating results in both our upstream and downstream divisions,
and to offset the negative effects of currency fluctuations and market prices,
meaning we continue to create value for PhosAgro’s shareholders and
investors.

“In 3Q 2017, downstream production of fertilizers grew by almost 19%
year-on-year to nearly 2.1 million tonnes, supported by a healthy 16%
year-on-year increase in the output of phosphate-based products to 1.7 million
tonnes, while the production of nitrogen-based fertilizers grew by 32%
year-on-year and exceeded 0.4 million tonnes.

“With our major investment projects completed, PhosAgro’s strategy will
continue to focus on organic growth, which we believe is the most effective
way to navigate the current market environment while remaining fully ready to
shift into high gear as soon as the market cycle turns upward, with no
significant burden on the Company’s balance sheet.

“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, and is
the best way for PhosAgro to capture value as we grow production volumes and
maintain the flexibility to adjust to agricultural producers’ changing
fertilizer usage trends. We believe that our expanded portfolio of fertilizer
grades, coupled with growing volumes and exceptionally high quality
fertilizers that are virtually free from potentially harmful heavy metals and
other impurities, make PhosAgro crop nutrients the ‘natural’ choice for
farmers and food consumers around the world in light of growing concerns about
the quality of fertilizers and potential impact on human health.”

Sales overview
* In 3Q17 Sales of both complex NPK/NPS/PKS crop nutrients and concentrated
DAP/MAP saw similar 12% year-on-year growth. Demand for DAP/MAP was supported
by more than 25% year-on-year growth in MAP sales, primarily to the Russian
and CIS markets.
* Russia remains a priority market for the Company; PhosAgro’s domestic
sales in 9M 2017 increased by almost 20% year-on-year and have already
exceeded 2.1 million tonnes. Overall, our domestic market accounted for almost
35% of total sales in the first nine months of 2017. According to the Russian
Association of Fertilizer Producers, total fertilizer sales in Russia grew by
only 5% year-on-year.
* Sales to CIS countries other than Russia grew by more than 60% year-on-year,
while volumes to North America more than doubled. Sales of phosphate-based
fertilizers to Europe grew by 17% year-on-year during 9M 2017. Russia and
Europe remain two of the key priority markers for the Company
Market overview
* In 3Q17 export-oriented capacities expanded with the ramp-up of
Ma’aden’s new capacity coupled with further growth in exports from China.
However, the export of phosphates (DAP/MAP/NP/TSP) from China grew by 20%
year-on-year in 3Q 2017, which represents a slowdown from the 30% year-on-year
increase seen in 6M 2017.
* On the demand side, Brazilian imports of phosphates were resilient in 3Q
2017, growing by 80% year-on-year (in P(2)O(5) content), while MAP and NP
imports increased by 60% and 80% year-on-year, respectively. According to
preliminary data, DAP imports into India for 9M 2017 were down by 20%
year-on-year and amounted to 3.1 mln tonnes.
Outlook
* Looking ahead to the rest of 2017 and the beginning of 2018, significant
inflation in main feedstock prices (ammonia and sulphur), growth in coal
prices in China (the main feedstock for ammonia production), and tighter
environmental regulation in China should protect market prices against
additional supply coming from new units at OCP and Ma’aden, while a decrease
in inventories in India this year should result in demand emerged earlier than
usual in 2018.
The table below provides a breakdown of production volumes by major product:

                              Production volumes                               
 ('000 MT)              3Q 2017  3Q 2016   Chg y/y  9M 2017  9M 2016  Chg y/y  
 Apatit mine and beneficiation plant                                           
 Phosphate rock         2,414.2  2,064.6    16.9%   7,161.1  6,290.9   13.8%   
 Nepheline concentrate   253.9    263.2    (3.5%)    736.3    740.8    (0.6%)  
 Phosphate-based fertilizers                                                   
 DAP/MAP                 746.8    616.0     21.2%   2,274.3  2,022.0   12.5%   
 NPK                     676.3    516.9     30.8%   1,873.6  1,472.0   27.3%   
 NPS                     135.0    178.6    (24.4%)   288.5    407.6   (29.2%)  
 APP                      30.2     35.4    (14.7%)   115.4     98.8    16.8%   
 MCP                      82.5     79.1     4.3%     276.1    254.8     8.4%   
 PKS                      12.8     21.2    (39.6%)    83.3     71.8    16.0%   
 SOP                      0.0      5.9    (100.0%)    2.7      20.8   (87.0%)  
 Nitrogen-based fertilizers                                                    
 AN                       93.4     78.4     19.1%    355.6    321.4    10.6%   
 Urea                    312.1    229.1     36.2%    817.5    767.5     6.5%   
 Other products                                                                
 AlF3                     11.9     11.5     3.5%      34.9     34.4     1.5%   
 STPP                     23.2     22.4     3.6%      54.6     68.3   (20.1%)  
 Feed stock                                                                    
 Ammonia                 364.1    276.4     31.7%    951.5    884.5     7.6%   
 Phosphoric acid         641.0    548.2     16.9%   1,877.6  1,670.5   12.4%   
 Sulphuric acid         1,398.6  1,185.7    18.0%   4,047.4  3,650.8   10.9%   

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

                                Sales volumes                                 
 ('000 mt)              3Q 2017  3Q 2016  Chg y/y  9M 2017  9M 2016  Chg y/y  
 Apatit mine and beneficiation plant                                          
 Phosphate rock          653.9    613.5     6.6%   1,998.1  1,839.8    8.6%   
 Nepheline concentrate   247.5    259.5    (4.6%)   735.7    739.8    (0.6%)  
 Phosphate-based fertilizers                                                  
 DAP/MAP                 769.0    689.8    11.5%   2,268.1  2,058.8   10.2%   
 NPK                     749.2    585.4    28.0%   1,918.3  1,540.6   24.5%   
 NPS                      52.5    132.0   (60.2%)   209.9    365.5   (42.6%)  
 APP                      34.1     30.1    13.3%    135.5     95.5    41.9%   
 MCP                      85.0     80.3     5.9%    260.4    245.8     5.9%   
 PKS                      25.9     29.0   (10.7%)    93.4     82.3    13.5%   
 SOP                      0.1      11.1   (99.1%)    4.2      22.6   (81.4%)  
 Nitrogen-based fertilizers                                                   
 AN                       30.3     50.9   (40.5%)   399.3    309.6    29.0%   
 Urea                    279.1    229.1    21.8%    805.8    757.1     6.4%   
 Other products                                                               
 AlF3                     13.0     10.7    21.5%     36.3     33.8     7.4%   
 STPP                     22.0     22.0     0.0%     60.2     76.3   (21.1%)  

* 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 37% (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,
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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