Acron Group, Moscow, reported an 85 percent drop in net profit for FY2020, down to RUB3.84 billion ($53 million) on revenue of RUB119.9 billion ($1.66 billion), versus the prior-year RUB24.79 billion ($383 million) and RUB114.8 billion ($1.77 billion), respectively.
EBITDA came in 1 percent lower on the year at RUB35.3 billion ($489 million), down from RUB35.7 billion ($552 million). Revenues increased 4 percent, boosted by an 11 percent surge in the average U.S. dollar exchange rate.
“Early 2020 was challenging, as global prices for mineral fertilizer prices dropped to multi-year lows, and the situation was aggravated by the COVID-19 pandemic in spring,” said Acron Group Chairman Alexander Popov.
He cited non-monetary items, such as exchange rate differences, as also contributing to the fall in net income. The group reported a net exchange loss of RUB10.74 billion in 2020, driven by a revaluation of assets, loans, and liabilities, against a RUB7.01 billion exchange profit a year earlier.
Acron Group’s output of key products increased 7 percent last year, reaching 7.98 million mt, while sales of key products were up 3 percent, to 7.81 million mt.
Popov reported that in response to weak UAN prices, Acron shifted its production structure towards products with a greater margin, including granular urea and ammonium nitrate. He said the group also increased its sales last year to growing markets in Latin America, and its priority Russian market.
“In early 2021, the mineral fertilizer markets showed significant improvement, with global prices actively recovering from multi-year lows amid strong demand in various regions,” said Popov.
“However, we remain cautiously optimistic and focused on controlling the group’s debt burden,” he said.
Acron Group’s net debt in dollar equivalent stood at $1.348 billion as of Dec.31, 2020, an 11 percent increase on the end-2019 position of $1.215 billion. At the end of the current reporting period, the net debt/EBITDA ratio in dollar equivalent was 2.8 against 2.2 a year earlier.
The group plans to shift its main dividend payments to shareholders towards the end of 2021, which it said would, combined with limiting capex, allow it to reduce the group’s debt burden.
“We still have the goal of paying out at least $200 million per calendar year in dividends, but in 2021 we expect the board to issue recommendations regarding the allocation of the major portion of the amount towards the end of the year,” said Popov.
Capex is planned at approximately $210 million in 2021, down 16 percent on last year’s capital investments totalling $249 million.