PJSC PhosAgro, Moscow, reported a 223 percent increase in fourth-quarter net income to RUB41.83 billion on revenue of RUB127.92 billion, up from RUB12.96 billion and RUB58.89 billion, respectively, a year ago.
Net profit adjusted for non-cash foreign exchange gain/loss came in at RUB45.14 billion ($622 million), up from RUB2.17 billion, while EBITDA for the quarter jumped to RUB61.52 billion ($847 million) versus the year-earlier RUB17.87 billion.
The Russian fertilizer group attributed the earnings boost to upgrades to its production assets, efficiency improvements at key production units, and high levels of self-sufficiency in key inputs.
The more than double year-over-year revenue growth, it said, was driven mainly by “record-setting” production volumes, the global recovery in fertilizer prices during the year, and strong end-user demand combined with low inventories in key markets.
Fertilizer production increased 13 percent in the fourth quarter, to 2.76 million mt, up from the previous year’s 2.44 million mt, while fertilizer sales were up 21 percent, to 2.47 million mt from 2.04 million mt (GM Jan. 28, p. 25).
Fourth-quarter EBITDA in the phosphate-based fertilizers segment came in at RUB45.1 billion ($621 million), a more than three-fold increase year-over-year. The group said the higher profitability was driven by increased sales volumes on the back of high demand in global markets.
EBITDA in the quarter in the nitrogen-based fertilizer segment was RUB16.0 billion ($221 million), up more than four-fold year-over-year. PhosAgro cited the considerable increase in prices for nitrogen-based fertilizers in late 2021 amid the gas crisis in Europe for the growth.
For the full-year, PhosAgro also reported a 200 percent increase in adjusted net profit to RUB130.21 billion ($1.8 billion) on revenue of RUB420.49 billion ($5.7 billion), up from FY2020’s RUB43.37 billion and RUB253.88 billion, respectively.
EBITDA for the full year increased to RUB191.8 billion ($2.6 billion), up from RUB85.66 billion, while revenue grew 66 percent to RUB420.49 billion from the prior year RUB253.88 billion.
Full-year fertilizer production grew by 3 percent, to 10.31 million mt from the previous year’s 9.98 million mt, and fertilizer sales also increased by 3 percent to 10.26 million mt from 9.95 million mt.
Commenting on the market outlook, PhosAgro CEO Andrey Guryev noted the start of 2022 has been marked by continued high demand for phosphate-based fertilizers thanks to the early resumption of DAP/NPK purchases from India due to low carry-over stocks and higher subsidies for fertilizer purchases.
“Since the beginning of the year, India has already purchased more than 1.5 million mt of phosphate-based fertilizers for delivery during the first quarter of 2022, thus counterbalancing off-season activity in other markets,” he said.
An additional factor supporting prices is the ongoing restrictions on fertilizer exports from China in favor of supplies to the domestic market, Guryev noted.
He said urea markets are seeing a price correction in the wake of the active phase of import purchases in most major markets, while global ammonia prices remain at record highs on the back of high natural gas prices and continued import demand from Europe.