All posts by mickeybarb@charter.net

Minbos Inks EPCM for Angola Project

Africa, Australia, News, News Briefs, Phosphate

Minbos Resources Ltd., Subiaco, Western Australia, reported that it has signed an Engineering Procurement and Construction Management (EPCM) Limited Notice to Proceed (LNTP) Agreement with Brazilian-based EPC Engenharia e Projetos de Infraestrutura Ltda (EPC Engenharia) to begin work on design and scheduling programs for the Cabinda Phosphate Fertilizer Project in Angola.

EPC Engenharia will subcontract to Dar Al-Handasah Consultants, an established EPCM contractor with a long history of working in Angola.

The work will be overseen by newly-appointed Implementation Manager Mauro Lopes and in-country General Manager Operations Thomas Brueckner, who recently joined CEO Lindsay Reed in Angola to oversee project development works. Minbos said Lopes is a mechanical engineer with over 20 years of mining industry, while Brueckner is an experienced logistics professional, previously serving as Chief Operating Officer of the Porto de Caio (Port of Cabinda).

Minbos, an ASX-listed exploration and development company, won an international tender for the Cabinda Phosphate Project in March 2020 (GM March 20, p. 30). Minbos and its in-country partner, Soul Rock Ltda, won the tender based on producing enhanced phosphate rock as a substitute for fertilizers currently imported by the Angolan government.

Potash Supply Anxieties Ratchet Up as Force Majeure Declared on Belarus Potash

Belarus, Brazil, Canada, China, Featured, India, Israel, Lithuania, News, Potash

JSC Belarusian Potash Co. (BPC) notified customers that Belarus producer Belaruskali OAO on Feb. 16 told the company that force majeure conditions were forced upon it after it could not find alternatives to railing product to the Lithuanian port of Klaipėda, according to reliable sources, citing a notice from BPC.

While widely anticipated by most market participants since Lithuania halted the transit of Belarusian potash via its territory at midnight on Jan. 31, the Belarusian declaration of force majeure has ratcheted up global supply anxieties that already were being driven by U.S. and E.U. sanctions on Belarus, pushing soaring global potash prices still higher.

Belarus potash typically accounts for around 15 percent of global potash exports, but is now effectively out of the market.

This week, Canpotex settled new standard potash supply contracts through the end of this year with India’s biggest potash importer, Indian Potash Ltd. (IPL), and China’s potash buying committee at $590/mt CFR – a price hike on last year’s contract prices of $145-$310/mt CFR and a $343/mt CFR, respectively (see Markets).

ICL Ltd. also has agreed to the same price for standard potash deliveries to its customers in China for deliveries to the end of this year.

“Global potash contracts have settled at the highest price since 2008, ensuring another year of pricey inputs for farmers and strong earnings for producers,” said Green Markets Research Director Alexis Maxwell.

“U.S. sanctions on Belarus eliminated a key competitor – about 15 percent of the global traded market – for publicly traded potash producers Nutrien, ICL, and K+S, with no readily available alternative supplier waiting in the wings,” she said.

Last year, BPC was the first producer to sign new contracts with China and India.

BPC, in a statement sent by the company to its Brazilian customers on Feb. 16, said it won’t be able to meet contracts due to sanctions imposed on Belarus by the E.U. and the U.S., but that it was doing “what’s possible to find a solution to the supply disruption, “according to a Bloomberg report, citing Brazilian newspaper Valor Economico.

Brazilian farmers already are facing shortages of key fertilizer nutrients.

Russian fertilizer producers have said they will double their supplies to the country, according to a Reuters report, citing Brazilian President Jair Bolsonaro after he had attended a Russian-Brazilian business conference in Moscow on Feb. 16.

Brazil depends on imports for 95 percent of its potash, last year importing some 12.8 million mt, according to Trade Data Monitor. Of this total, 2.4 million mt, or some 19 percent, came from Belarus.

Nutrien Ltd. Interim President and CEO Ken Seitz told analysts at a company earnings call on Feb. 17 that with what Nutrien was seeing in the market “it is absolutely the case that some traditional BPC customers are inquiring about volumes, and it is also the case we are seeing less BPC volumes shipping at the moment.”

Seitz said Nutrien plans to boost its own potash sales volumes to 13.7-14.3 million in 2022, up from 2021’s 13.6 million mt. He said it may produce another 500,000 mt in the second-half if demand warrants. However, he said the company would only proceed with a 5 million mt brownfield expansion if it sees prolonged challenges in Belarus. Nutrien puts current capacity at 18 million mt.

BMO Capital last week warned that Belarusian potash mines may soon cease production after the firm spoke with various potash suppliers, according to a report in real-time financial news publisher The Fly (GM Feb. 11, p. 1). BMO Capital analyst Joel Jackson had understood the last shipment from the potash mines in Belarus to Lithuania was over a week previous and that he would “not be surprised to see the Belarusian potash mines” stopping production “any day.”

The Lithuanian government decision to terminate Lithuanian state-owned railway Lietuvos Geležinkeliai’s (LTG) contract to transport Belarusian potash to Klaipėda port effectively blocked the export shipment of around 90 percent of Belarus’ potash (GM Jan. 14, p. 1). Lithuania’s decision was taken due to “national security concerns.”

There were reports late this week that Russian President Vladimir Putin has ordered the building of a new port near St Petersburg to handle Belarusian potash shipments, according to a Bloomberg report, citing Belarusian President Alexander Lukashenko during a televised joint news conference in Moscow on Feb. 18.

According to Lukashenko, Belarus expects to start loading “millions” of tons of cargo at the new port in 12-18 months. He said Belarus may not renew potash shipments via Lithuania and Ukraine.

There were also reports that Russia plans to start rail shipments of fertilizers from Belarus this year, according to an Interfax report, citing Russian Deputy Transport Minister Dmitry Zverev. The minister was speaking at a meeting of the State Duma Energy Committee on Feb. 17, convened as part of a discussion on a bill concerning ship-or-pay contracts for coal shipments to ports in the Far East.

According to the report, Zverev said such terms could be applied to transit freight from Belarus. He pointed to the fact that Belarus signed ship-or-pay contracts with Russian railways and Russian seaports in February 2020 for oil freight. Starting this year, there will additional types of freight from Belarus, including fertilizers, he said.

According to the minister, it will be possible to receive an additional 2.15 million mt for the Russian railways and the same volumes for the ports this year. However, even if it proves to be feasible, this is just a fifth of  the 11 million mt/y or so of potash that Belarus previously transported via Lithuanian railways via Klaipėda port.

Certainly, market participants and analysts have questioned whether sufficient spare transshipment capacity is, and can be, made available at Russian ports to handle an additional 10-12 million mt/y of Belarusian potash.

Belarusian Minister of Foreign Affairs Vladimir Makei this week had claimed agreements had been reached with Russia for Belarus to use Russian ports for the transshipment of potash and other Belarusian cargo, according to a BelTA report, citing comments made by the minister at a press conference in Minsk on Feb. 16.

Like Russia’s Deputy Transport Minister, Makei did not specify through which Russian ports Belarusian potash would be shipped. But previous statements coming out of Belarus have cited the port of St Petersburg and ports in Russia’s Leningrad region, as well as the port of Murmansk. Leningrad region ports include the Baltic Sea ports of Ust-Luga and Primorsk.

However, Russian Ambassador to Belarus Boris Gryzlov last week was cited as saying Belarus could begin transshipping potash this year through the Russian port of St. Petersburg and ports in Russia’s Leningrad region, according to an Interfax report.

Responding to an analyst’s question about the ability of Belarus calling to ship out of the Russian Baltic port of Ust-Luga and other Russian ports at a company earnings call on Feb. 17, Seitz said Nutrien had looked closely at the possibility, and he believes the options are limited for BPC getting access to “tidewater” at the present time.

He noted the Russian port of St Petersburg was the closest in distance to Belarus, but that there was not a lot of spare transshipment capacity at the port, given the amount of cargo moving through it.

Regarding the more northern port of Murmansk in Russia’s Leningrad region, which also has been cited as a potential option for Belarus potash transshipment, Seitz reminded that the port is more than 2,000 km from Belarusian potash production, so that option “obviously has challenges,” he said.

Meanwhile, Ukraine was set to introduce temporary restrictions on the transit of Belarusian potash through its territory to CIS and Baltic countries from Feb. 16, according to a report by Belarus-based pro-democracy and pro-human rights news site Charter97, citing the website of Ukraine’s State Administration of Railway Transport.

According to the report, the Belarusian potash transported through Ukraine is mainly to Turkey, Hungary, Poland, the Czech Republic, Romania, and Austria. However, the Belarusian potash volumes transported via Ukraine are understood to be small.

While the restrictions are described as “temporary,” the railway company did not indicate how long they would last. Ukraine last week was reported to have refused to participate in the export of Belarusian potash, according to an Interfax report.

Uralkali/Uralchem Have No Plans to Buy Belarusian Potash Assets, Says Report

Belarus, News, News Briefs, Potash, Russia

PJSC Uralkali has no plans to buy potash assets in Belarus, according to a Reuters report this week, citing Uralchem JSC Board Chairman and Deputy CEO – Director of Sales and Marketing Dmitry Konyaev.

Local media in Belarus reported earlier in this week that the Russian potash company was considering buying potash producer Belaruskali OAO and Slavkaliy, a potash development project in Belarus that was started by Russian billionaire Mikhail Gutseriev, who transferred his stake to a family member after he was sanctioned by the E.U. last year (GM Dec. 3, 2021). Like Belaruskali, Gutseriev is also under U.S. sanction.

Konyaev said Uralkali is not considering the development of potash assets outside the Perm region in Russia, and its interests in potash are concentrated only in this region.

Uralchem, via its majority owner Dmitry Mazepin, has owned 81.47 percent of Uralkali since the end of November 2020 (GM Dec. 4, 2020).

BHP 1H Profits Up 77 Percent

Australia, Earnings, News

BHP Ltd., Melbourne, on Feb. 15 reported a 77 percent increase in its fiscal first-half underlying attributable profit to US$10.69 billion for the six months to Dec. 31, 2021, with underlying attributable profit from continued operations of US$9.72 billion, up from US$6.20 billion in the prior corresponding period.

Net income came in at US$9.44 billion versus the year-ago US$3.88 billion, beating analysts’ average estimate of US$9.14 billion (Bloomberg Consensus).

Underlying basic earnings per ordinary share were up 77 percent, to 211.2 cents versus the year-ago 119.4 cents. Revenue from continuing operations increased 27 percent to US$30.53 billion.

The mining group cited higher sales prices across its major commodities, near-record production at Western Australia Iron Ore (WAIO) and higher copper concentrate sales from the Chilean Spence operation, and favorable exchange rate movements for the profits boost.

It said it would pay a record interim dividend of US$1.50 per share, up from last year’s US1.01.

Nutrien Beats Analyst Guidance; More Potash Volumes Expected in 2022

Earnings, News, Nitrogen, Phosphate, Potash, Saskatchewan

Nutrien Ltd. beat analyst guidance for both fourth-quarter and full-year adjusted EBITDA. The company posted fourth-quarter adjusted EBITDA of $2.46 billion, compared to guidance of $2.41 billion. The company tripled the year-ago $768 million. Nutrien’s full-year performance was $7.13 billion versus $7.07 billion from the Bloomberg Consensus, the average of major analysts. 2021 adjusted EBITDA was $3.67 billion.

Fourth-quarter net earnings were $1.21 billion ($2.11 per diluted share) on sales of $7.3 billion, up from the year-ago $316 million ($0.55 per share) and $4.05 billion, respectively. Full-year net earnings were $3.18 billion ($5.52 per share) on sales of $27.7 billion up from $459 million ($0.81 per share) and $20.9 billion, respectively.

“The advantages of Nutrien’s integrated business were demonstrated in 2021 as we delivered record financial results and made significant progress on our long-term strategic targets, including our key sustainability priorities,” said Ken Seitz, Nutrien’s Interim President and CEO. “We utilized the scale and reliability of our world-class supply chain and the strong execution of our teams to ensure customers had the products and services they needed, when they needed them.

“The outlook for global agriculture and crop input markets is very strong, and we are well positioned to deliver significant growth in earnings and free cash flow in 2022,” he added. “We will continue to advance our strategic priorities and maintain a disciplined approach to deploying capital, using our strong financial position to grow the business and return significant cash to shareholders.”

Seitz said Nutrien plans to boost its potash sales volumes to 13.7-14.3 million in 2022, up from 2021’s 13.6 million mt. He said the forecast assumes sanctions on Belarus have a temporary impact on the global market. The company expects global shipments at 68-71 million mt.

However, Seitz said Nutrien may produce another 500,000 mt in the second-half if demand warrants. He said the company would only proceed with a 5 million mt brownfield expansion if it sees prolonged challenges in Belarus. Nutrien puts its current capacity at 18 million mt (see Belarus Story).

In the U.S. market, Nutrien expects 91-93 million acres of corn and 87-89 million acres of soybeans.

For full-year 2022, Nutrien is projecting adjusted EBITDA of $10-$11.2 million ($10.20-$11.80 per share). Adjusted EBITDA for its segments include Retail $1.7-$1.8 billion, Potash $5.0-5.5 billion, Nitrogen $3.2-$3.6 billion, and Phosphate $500-$600 million. Potash sales are expected at 13.7-14.3 million mt, with nitrogen volumes put at 10.8-11.3 million mt.

Nutrien also reported that its Board of Directors declared a quarterly dividend of US$0.48 per share, representing a four percent increase from the prior dividend declared in November, equating to an annualized dividend of US$1.92 per share.

The Board also approved the purchase of up to ten percent of the public float of Nutrien’s common shares over a one-year period through a normal course issuer bid.

Retail (millions) 4Q-21 4Q-20 2021 2020
Adjusted EBITDA 442 297 1,939 1,430
Gross Margin 1,173 885 4,600 3,736
Total Sales 3,878 2,618 17,734 14,785
CN Sales 2,035 1,108 7,290 5,200
CN Margins 428 236 1,597 1,130
CN Volume (000 mt) 2,821 2,685 13,383 12,732
Avg ($/mt) 721 413 545 408
CN gross margin per mt 152 88 119 89
Potash (millions) 4Q-21 4Q-20 2021 2020
Adjusted EBITDA 1,053 220 2,736 1,190
Gross Margin 1,115 145 2,751 963
Total Sales 1,420 450 4,036 2,146
Sales Volume (000 mt) 3,056 2,654 13,625 12,824
Avg ($/mt) 465 170 296 167
Nitrogen (millions) 4Q-21 4Q-20 2021 2020
Adjusted EBITDA 921 266 2,308 1,080
Gross Margin 754 112 1,726 475
Total Sales 1,456 555 3,984 2,222
Sales Volume (000 mt) 2,835 2,845 10,725 10,966
Avg ($/mt) 514 195 371 203
Gas Costs ($/mmBtu) 6.40 2.74 4.61 2.36
Phosphate (millions) 4Q-21 4Q-20 2021 2020
Adjusted EBITDA 196 63 540 232
Gross Margin 163 16 421 36
Total Sales 532 280 1,628 1,075
Sales Volume (000 mt) 711 648 2,619 2,781
Avg ($/mt) 749 433 622 387

BHP Jansen Project on Track; New Equipment Contract Reported

Australia, News, News Briefs, Potash, Saskatchewan, Vancouver

BHP Ltd., Melbourne, said the Jansen potash mine project under development in Saskatchewan is tracking to plan, with the shaft project now 98 percent completed. The mining group in January commenced contract awards for the Jansen Stage 1 project (GM Jan. 21, p. 34).

It said this week around US$1.2 billion in contracts, out of the US$5.7 billion investment, already are awarded, including the Port Engineering, Procurement, and Construction Management (EPCM) contractor.

BHP Canada Inc., a subsidiary of BHP Group, inked an agreement last July with Vancouver-based Westshore Terminals LP, a wholly-owned subsidiary of Westshore Terminals Investment Corp., for the terminal company to provide port services to the proposed Jansen potash mine at its Westshore terminal in Delta, B.C. (GM July 23, 2021). Certain existing infrastructure at the Westshore terminal will be modified to support handling potash at the terminal’s berth 2.

Sweden’s Sandvik Mining and Rock Solutions is also reported to have secured a contract with a total value SEK2 billion (approximately US$215.5 million at current exchange rates) for the Jansen Stage 1 project, according to a Global Mining Review report. The delivery period for the equipment is expected to start in third quarter 2023 and extends to 2026.

As previously reported, the mining group said the Jansen Stage 1 project is currently 3 percent complete. BHP’s Board took the final investment decision to go ahead with Stage 1 last August (GM Aug. 20, 2021). On completion – currently targeted for calendar 2027 – Stage 1 will have capacity to produce 4.35 mt/y to of potassium chloride.

The mining group in its fiscal half-year results statement noted that potash prices have increased sharply over the last 18 months, despite latent excess production capacity. Longer term, it continues to see potash standing to benefit from the intersection of a number of global megatrends: rising population, changing diets, and the need for the sustainable intensification of agriculture.

“The compelling demand picture, and the maturity of the existing asset base, offers an attractive entry opportunity for a world-class opportunity later this decade,” said BHP.

In late January, BHP completed the unification of BHP’s dual-listed corporate structure (GM Feb. 4, p. 30).

OCI Back to Black for 4Q, FY20; Higher Selling Prices Cited

Ammonia, Calcium Ammonium Nitrate, Earnings, Europe, Methanol, News, UAN, Urea

OCI NV, Amsterdam, reported a net income attributable to shareholders of the company of $294.8 million for the fourth quarter ended Dec. 31, 2021, compared with a net loss of $56.9 million the previous year. Adjusted net income came in at $447.4 million versus a year-ago net loss of $44.8 million.

Diluted earnings per share were $1.397, up from a negative $0.271 per share in the corresponding prior-year period.

Fourth-quarter adjusted EBITDA increased 291 percent to $1.04 billion, up from the prior-year $265.9 million, while revenues more than doubled, to $2.20 billion versus $1.04 billion a year ago.

OCI attributed the EBITDA jump to higher selling prices year-over-year for all products, which more than offset lower sales volumes due to turnarounds and despite record high natural gas prices in Europe.

The company saw total sales volumes fall 16 percent in the fourth quarter compared with the corresponding prior-year period to 3.43 million mt, down from 4.09 million mt. Total own-product sales volumes were down by 21 percent, to 2.69 million mt from the year-ago 3.4 million mt.

Total own-product fertilizer sales volumes fell by 17 percent, to 2.13 million mt versus the year-ago 2.58 million mt. But total traded third-party sales volumes increased 6 percent during the fourth quarter against the same year-earlier period to 738,600 mt, up from 696,600 mt.

“Our end markets continued their upward trend during the fourth quarter, and we expect the first half of 2022 to be strong, driven by attractive farm economics for our nitrogen fertilizers; strong demand in our industrial end markets for ammonia, methanol, melamine, and DEF; and our advantaged feedstock costs in MENA and the U.S.,” said OCI NV CEO Ahmed El-Hoshy.

“Our current order book looks healthy with some sales into second-quarter 2022. Our distribution capabilities, including the ability to manage inventories close to key demand centers coupled with a disciplined commercial strategy, allow us to optimize benefits from current market conditions,” continued Hoshy.

The CEO highlighted the recent award to Fertiglobe, OCI’s Abu-Dhabi-based Middle Eastern joint venture partnership with Abu Dhabi’s state-energy company, Abu Dhabi National Oil Corp. (ADNOC), to supply 500,000 mt of urea to Ethiopia in the first and second quarters of this year “at an average price of around $725/mt.”

The company noted that in Europe significantly higher gas prices in the fourth quarter versus the corresponding prior-year period resulted in a negative impact of around $147 million, and in the U.S., higher gas prices in the quarter had a negative impact of around $37 million.

OCI’s Nitrogen segment reported a 320 percent increase in adjusted EBITDA to $877.2 million in the fourth quarter, despite the turnarounds and the higher gas prices in Europe and the U.S. This compares to the year-ago $209.1 million.

In the U.S., following the extended turnaround at Iowa Fertilizer Co. (IFCo) during the third quarter of 2021, OCI said IFCo’s contribution to the Nitrogen segment’s – and company-wide – results “increased considerably” compared to the fourth quarter of 2020 and the third quarter of 2021.

The adjusted EBITDA in the Nitrogen U.S. segment increased by 270 percent to $168.5 million in fourth-quarter 2021 from $45.5 million, as higher selling prices more than offset lower volumes and higher gas prices year-on-year.

OCI reported that the Nitrogen Europe segment continued to perform well in a difficult market environment with record-high natural gas input costs. It noted the segment benefited from the company’s flexible business model as well as increased throughput capabilities at the OCI ammonia import terminal in Rotterdam, where throughput capabilities were increased by an annualized rate of around 300,000 mt during the fourth quarter (GM Nov. 12, 2021).

The company said this allowed it to maintain production of its downstream products – CAN, UAN, and melamine – after it temporarily closed one of the two OCI Nitrogen ammonia plants due to the high gas prices in Europe at the beginning of the fourth quarter 2021.

The Nitrogen Europe segment posted a 251 percent increase in fourth-quarter adjusted EBITDA compared with the same prior-year period, to $72.4 million, up from the prior-year $20.6 million, boosted by higher selling prices for all products, and offsetting the negative impact of increased gas prices.

The company noted that CAN sales volumes were relatively flat year-over-year in the fourth quarter, but highlighted the healthy order book in nitrates for the first half of the year. It said it also expected to benefit from its logistics close to core demand centers once the new season starts off.

OCI’s Methanol segment reported a 200 percent jump in adjusted EBITDA for the fourth quarter to $199.3 million, up from the year-ago $88.3 million. The company cited higher methanol prices and the sale of excess EUAs (EU Emission Allowances) more than offsetting lower sales volumes and higher gas prices in the Netherlands and the U.S. compared to a year ago.

The company said its methanol plant in the Netherlands remains shut down due to the high gas price environment after the facility was temporarily shut down in June 2021.

At the Natgasoline facility in Beaumont, Texas, after a period of relatively low operating rates, following the plant’s inaugural planned turnaround starting in the third quarter of 2021, and the resumption of production at the beginning of December, OCI said the plant has achieved rates close to maximum production capacity.

The company also reported good onstream performance at the OCI Beaumont, Texas, plant during the fourth quarter.

Earlier this month, OCI announced it had signed definitive legal agreements to create a strategic alliance with Abu Dhabi’s ADQ and Alpha Dhabi Holding, under which the Abu Dhabi firms will acquire a 15 percent stake in the OCI Methanol Group for $375 million (GM Feb. 11, p. 35). OCI had reported last November it had entered into the strategic alliance (GM Nov. 24, 2021).

The alliance is aimed at positioning the OCI Methanol Group to be able to pursue future growth opportunities in hydrogen-based applications, including fuel.

For full-year 2021, OCI posted a net income attributable to shareholders of the company of $570.5 million, versus a net loss of $177.7 million for FY2020. Adjusted net income came in at $731.8 million compared with a year-ago net loss of $213.4 million.

FY2021 diluted earnings per share were $2.703, versus a negative $0.847 for the previous year.

Adjusted EBITDA for the year increased by 190 percent to $2.53 billion, up from the prior-year $869.8 million, while revenues grew 82 percent, to $6.32 billion versus $3.47 billion in FY2020.

OCI announced a semi-annual interim distribution for the second half of 2021 of €1.45 per share or around $350 million including a $200 million base.

Fertiglobe’s financial results are reported separately in this issue.

OCI Product Sales Volumes

‘000 mt 4Q-2021 4Q-2020 % change FY-2021 FY-2020 % change
Own product            
Ammonia 443.0 380.0 +17 2,090.3 1,656.8 +26
Urea 995.6 1,472.4 (32) 4,327.6 4,763.2 (9)
CAN 279.0 290.7 (4) 1,176.4 1,371.8 (14)
UAN 412.7 434.2 (5) 1,354.8 1,749.9 (23)
Total fertilizer 2,130.2 2,577.3 (17) 8,949.0 9,541.7 (6)
Melamine 35.2 37.0 (5) 131.9 144.6 (9)
DEF 187.2 181.0 +3 612.1 636.2 (4)
Total nitrogen products 2,352.6 2,795.3 (16) 9,692.9 10,322.5 (6)
Methanol1 336.7 602.4 (44) 1,747.2 1,926.5 (9)
Total own products sold 2,689.4 3,397.7 (21) 11,440.1 12,249.0 (7)
Traded third party            
Ammonia 69.2 108.1 (36) 255.5 284.3 (10)
Urea 252.9 275.1 (8) 1,295.2 910.5 +42
UAN 16.9 22.6 (25) 48.5 41.3 +18
Methanol 209.0 35.2 +494 524.4 258.8 +103
AS 124.6 200.7 (38) 467.8 712.8 (34)
DEF 66.2 54.9 +21 362.2 227.0 +60
Total traded third party 738.6 696.6 +6 2,953.6 2,434.7 +21
Total own product and traded third party 3,428.1 4,094.3 (16) 14,393.7 14,683.7 +2

1 Including OCI’s 50 percent share of Natgasoline volumes

Fertiglobe 4Q Profits Jump on Higher Prices, Despite Lower Sales Volumes

ADNOC - Abu Dhabi, Ammonia, Earnings, Europe, News, Urea

Fertiglobe, the Abu-Dhabi-based Middle Eastern joint venture partnership between OCI NV, Amsterdam, and Abu Dhabi’s state-energy company, Abu Dhabi National Oil Corp. (ADNOC), reported a big jump in net income attributable to shareholders of $366.5 million for the fourth quarter ended Dec. 31, 2021, up from $45.1 million for the corresponding prior-year period. Adjusted net income was $376.6 million, versus $43.6 million the previous year.

Diluted earnings per share were $0.044, up from $0.005.

Fourth-quarter adjusted EBITDA more than trebled to $647.6 million, up from $144.9 million, while revenues increased by 138 percent to $1.18 billion from $498.5 million a year ago.

Fertiglobe attributed the robust results to higher selling prices, which offset lower sales volumes due to planned turnarounds.

Total sales volumes were 22 percent lower in the fourth quarter compared with the same year-ago period, dropping to 1.43 million mt from 1.83 million mt.

Of this total, the company’s own-produced sales volumes also were down 22 percent to 1.23 million mt, down from 1.58 million mt.

Own-produced ammonia sales volumes in the quarter grew 64 percent year-over-year to 243,000 mt from 148,000 mt, but this was more than offset by a 31 percent fall in own-produced urea sales volumes, which fell to 991,000 mt versus the year-ago 1.43 million. The company cited turnarounds at the Fertil operation in Abu Dhabi during the fourth quarter of last year as mainly behind the urea sales volume turndown.

Fertiglobe’s traded third-party volumes too were 24 percent lower in the final quarter of 2021, dropping to 193,000 mt from 253,000 mt a year ago.

“Fertiglobe delivered a solid set of results in fourth-quarter 2021, further underpinning our exciting growth potential,” said Fertiglobe CEO Ahmed El-Hoshy. “Our current order book looks healthy into second-quarter 2022, and we expect first-half 2022 to be strong, driven by attractive farm economics, strong demand for our ammonia end markets, and our globally competitive position.”

For the full-year ended Dec. 31, 2021, Fertiglobe posted another big jump in net income attributable to shareholders, to $702.7 million, up from the previous year $74.3 million. Adjusted net income was $736.6 million versus the year-ago $66.1 million.

Full-year diluted earnings per share were $0.085, up from $0.009.

Adjusted EBITDA for the year came in at $1.55 billion, up the prior year $453.3 million, while revenues more than doubled, to $3.31 billion versus $1.55 billion a year earlier.

Full-year total sales volumes increased by 7 percent to 6.59 million mt, up from 6.15 million in 2020. Of these, own-product sales volumes increased by 2 percent, to 5.57 million mt, while third-party traded volumes grew by 47 percent, reaching 1.02 million mt.

Fertiglobe confirmed a second-half 2021 interim dividend of AED0.15 per share (about $340 million), payable in April 2022, which exceeds the previous guidance of from “at least $240 million” (GM Oct. 15, 2021). It will be the company’s first dividend since the successful listing of the company on the Abu Dhabi Securities Exchange (ADX) on Oct. 27 last year (GM Oct. 29, 2021).

Based on the current outlook, the company expects the first-half 2022 interim dividend, payable in October 2022 to be higher than the current guidance of “at least $200 million,” with an update to be provided during the first-quarter 2022 results in May.

Following the IPO, OCI continues to own a majority stake in Fertiglobe’s share capital – calculated to be just over half – while ADNOC now indirectly owns a 36.2 percent interest.

Fertiglobe Product Sales Volumes (‘000 mt)

  Q4-2021 Q4-2020 % change FY-2021 FY-2020 % change
Own Product            
Ammonia 243 148 +64 1,287 896 +44
Urea 991 1,431 (31) 4,286 4,565 (6)
Total own product sold 1,234 1,579 +22 5,573 5,461 +2
Third-party traded            
Ammonia 40 67 (40) 144 130 +10
Urea 153 186 (18) 873 563 +55
Total traded third-party product 193 253 (24) 1,017 693 +47
Total own product and traded third-party 1,427 1,832 (22) 6,590 6,154 +7

Acron Boosts Domestic NPK Sales

Earnings, News, NPK, Russia

Acron Group, Moscow, reported its sales of NPK to the domestic market increased by 6 percent in 2021, reaching around 460,000 mt. The group’s total sales to the Russian market last year were about 1.2 million mt, according to a Feb. 15 statement by the Russian fertilizer group.

Acron reminded that ammonium nitrate (AN) is still the most popular fertilizer product with Russian growers. To meet this growing demand, the group – as previously reported – is upgrading the ammonia unit, building a new nitric acid unit, and increasing AN production capacity at its Dorogobuzh subsidiary production site in Russia’s Smolensk region (GM Dec. 3, 2021).

On completion of the project, Dorogobuzh’s ammonia production capacity will increase by 130,000 mt/y to 730,000 mt/y, and AN production capacity will rise by 180,000 mt/y.

Acron said it also launched last year a new online fertilizer store so that small and medium-sized growers “can easily buy high-quality Acron fertilizers without going through intermediaries.”

Co-Alliance Cooperative Plans New Headquarters

Eastern Cornbelt, News, News Briefs

Indiana-based agriculture and energy cooperative Co-Alliance Cooperative announced that it will be moving its corporate headquarters to a larger site at 770 North High School Road in Indianapolis, Ind. The new location is 10 miles east of its current headquarters in Avon, Ind., and directly off Interstate 465 at the 10th Street exit. 

Renovations are being completed, and the move to the new offices is planned for early summer 2022. Co-Alliance said the new facility will better accommodate its growing team and is more centrally located in its current footprint. It will also allow the company to host larger groups for meetings and collaboration. The current office in Avon is for sale through the Commercial Real Estate Services of CBRE.

“With the tremendous growth of our member-owned cooperative, we have simply outgrown our current facility,” said Kevin Still, President and CEO. “The new headquarters will be more centrally located for employees and will allow our team to conduct business more efficiently in a space that better suites our expanding needs. We are excited about a future where we can collaborate more efficiently and better serve our members.”   

Co-Alliance’s overall employee numbers grew by one-third in 2021 through a merger with Harvest Land Co-op (GM Jan. 29, 2021), and now numbers more than 1,000. The company serves customers in Indiana, Ohio, Michigan, and Illinois from some 90 locations, and operates four core divisions in Agronomy, Energy, Grain, and Swine and Animal Nutrition.