Polish fertilizers and chemicals company Grupa Azoty SA, Tarnów, posted a net profit attributable to shareholders of Pln853.6 million (approximately $199 million at current exchange rates) for the first quarter ended March 31, 2022, versus the prior year Pln87.6 million.
First-quarter EBITDA came in at Pln1.34 billion, compared with Pln405.1 million the previous year, while revenue more than doubled to Pln6.83 billion versus the year-ago Pln3.36 billion.
“Despite the challenging market landscape and feedstock pressure, Grupa Azoty delivered positive EBITDA across all business segments,” Grupa Azoty President of the Management Board Tomasz Hinc said in the company’s earnings statement.
“Although gas prices are at all-time highs, we have been able to maintain nitrogen fertilizer production at levels reflecting maximum available capacity, ensuring fertilizer availability ahead of the peak of application season,” he said.
While Azoty in the quarter saw “high and volatile” prices for feedstocks, mainly for natural gas, phosphate rock, potassium chloride, benzene, phenol, and propylene, it also noted increased prices for fertilizers, chemicals, and plastic products during the period.
But sales volumes in Azoty’s Fertilisers/Agro business segment and in the Chemicals business segment were lower year-over-year. The company attributed the lower sales volumes in Fertilisers/Agro as mainly reflecting reduced output of compound fertilizers resulting from a failure of power steam generators at subsidiary Zakłady Chemiczne Police SA in March (GM March 25, p. 29; March 18, p. 32). The stoppage fully ended on April 8 (GM April 15, p. 26).
In the Plastics segment, sales volumes remained largely unchanged versus the same year-ago quarter.
Azoty said due to increased fertilizer demand in Poland during the first quarter, it continued the efforts initiated in the second half of 2021 to redirect its products from foreign markets to the domestic market.
The Fertilisers/Agro business segment accounts for the largest share of Azoty’s results in the first quarter of each year due to the seasonality of fertilizer sales. The first quarter of 2022 was no exception.
This business segment reported a 224% surge in first-quarter EBITDA to Pln814.3 million, while revenue more than doubled to Pln4.22 billion, up from the previous year Pln2.02 billion.
Azoty said the key to the segment’s “solid first-quarter performance” was “its strategy to maximize internal production of nitrogen fertilizers whilest keeping product prices among the lowest in the European Union.”