Polish fertilizers and chemicals group Grupa Azoty AS, will post a group net loss of Pln555 million (approximately $133.6 million at current exchange rates) and sees an EBITDA loss of Pln401 million for the first quarter ended March 31, 2023, according to a May 15 report by the Polish Press Agency (PAP), citing a preliminary results filing by the group.
The net loss attributable to shareholders of the group is seen at Pln0.6 million versus a reported attributable net profit of Pln882 million for the first quarter of last year. The loss comes despite the receipt of some Pln234 million in government subsidies.
Revenues for the quarter are seen 43% lower year-over-year at Pln3.895 billion, down from Pln6.83 billion the previous year, according to the report.
Azoty’s Fertilisers/Agro segment, the group’s biggest division, will post a Pln140 million EBITDA loss in the first quarter versus a Pln814 million positive EBITDA a year ago, based on the preliminary results.
In light of the preliminary figures, the group warned it may breach debt covenants at the end of the second quarter, initially sending its shares down to Pln20.06, the lowest level since October. By close on May 18, Azoty’s shares had recovered to Pln29.68 per share.
According to a Bloomberg report, Azoty sees the risk that it will exceed net debt/EBITDA limits at the end of June, and is seeking measures to mitigate the risk. As of the end of last year, the Polish group had Pln2.17 billion of net debt, with the total outstanding value of loans at Pln5.66 billion, according to the report.
According to Bloomberg, Poland’s State Treasury – which owns a 33% stake in Azoty – may help to obtain a covenant waiver, and boost Azoty’s capital through a transfer of hydropower producer ZEW Niedzica, which Azoty has been seeking to acquire from the State Treasury (GM Sept. 16, 2022). However, it is not certain whether this may be achieved without a tender offer for the remaining stake.
Azoty will publish its full first-quarter earnings report on May 22.