Morocco’s OCP SA reported a 55 percent increase in full-year 2015 EBITDA, to MAD17,660 million ($1.8 billion) on revenues of MAD47,747 million ($4.9 billion), up from 2014’s MAD11,402 million ($1.4 billion) and MAD41,436 million ($4.9 billion), respectively.
Fourth-quarter EBITDA was 31 percent higher year-on-year at MAD3,737 million ($377 million) on revenues of MAD10,610 million ($1.1 billion), up from the year-ago MAD2,848 million and MAD10,521 million, respectively.
“Our ability to deliver improved fourth-quarter margins in a difficult industry environment reflects targeted investments over recent years to enhance our production optimization and achieve further cost efficiencies,” said Mostafa Terrab, OCP chairman and CEO. “In the quarter, we benefited from transportation and energy cost savings following the ramp-up of the slurry pipeline, and realized competitive raw material sourcing.” He said the investment program is also increasing the company’s industrial flexibility, which enables it to quickly adapt its production mix to optimize capacity and margins.
OCP attributed the 15 percent year-on-year increase in full-year revenues on a local currency basis to higher phosphate rock and acid revenues, which, it said, offset decreased fertilizer sales. The company’s 2015 top-line results benefited from higher prices for rock and acid, stable fertilizer prices, and growing Indian demand and higher sales to Africa. These compensated for lower Brazilian fertilizer imports and higher Chinese exports.
In local currency terms, full-year revenues from phosphate rock came in 24 percent higher at MAD12.83 billion, up from MAD10.30 billion a year ago, while phosphoric acid revenues increased 34 percent to MAD11.37 billion from MAD8.45 billion. Fertilizer revenues were 4.2 percent higher at MAD19.39 billion, up from MAD18.61 billion.
OCP said it achieved a “significant” increase in new product sales through expanding in high-growth markets, notably Africa. In 2015, Africa accounted for 24 percent of the company’s total fertilizer exports, up from 13 percent in 2014. The company’s sales of new finished products to all markets increased nearly 50 percent to 1.19 million mt last year, up from 796,000 mt a year ago.
OCP’s 2015 capital expenditure totaled MAD14,264 million ($1.5 billion) as part of its ongoing industrial investment program, initiated in 2008. Key projects completed last year were: the continued ramp-up of the Jorf Lasfar slurry pipeline, which transported 6.5 million mt of rock in 2015, more than double the 2.7 million mt transported in the previous year, resulting in MAD0.8 billion of cost savings; the first integrated fertilizer plant at Jorf Lasfar became operational in the first half of the year, with the second plant expected to come online by mid-2016; the first phosphoric acid line adapted for processing phosphate pulp was launched in September; and the desalination plant at Jorf Lasfar had its first start-up tests in July and has since begun commercial operations.
Looking ahead, OCP sees stable-to-softening conditions in the phosphate market this year, but expects continuing resilience in comparison to other commodities. While it anticipates improving demand in the Americas – the U.S., Brazil, and Argentina – higher inventories in India and subsidy decisions suggest lower Indian imports especially in the first half, it said.