OCP SA,
Casablanca, reported a 14 percent rise in net profit for full-year 2020 for
controlling interests, to MAD3.23 billion (approximately $354 million at
current exchange rates) on revenue of MAD56.18 billion ($5.93 billion), up from
the previous year’s MAD2.84 billion and MAD54.09 billion ($5.62 billion),
respectively.
Full-year
EBITDA increased 22 percent to MAD18.66 billion ($1.96 billion), up from
MAD15.33 billion ($1.59 billion).
“The
year 2020 was one of the most challenging business periods in recent history …
Nevertheless, the full-year results represented significant year-on-year gains
across all key metrics,” said OCP Chairman and CEO Mostafa Terrab.
“Our
results benefited from a gradually improving market environment, which led to a
progressive increase in prices throughout the year. Higher fertilizer exports,
coupled with lower raw material prices and cost savings, contributed to
substantial operating leverage in 2020, resulting in the full year EBITDA
growth of 22 percent on a 4 percent revenue increase expressed in local
currency,” he added.
The
revenue increase was largely driven by higher fertilizer and phosphate rock
export volumes last year compared with 2019.
Revenue by product
|
Millions
of dirhams
|
FY2020
|
FY2019
|
% change
|
|
Phosphate
rock
|
9,287
|
9,474
|
(2)
|
|
Phosphoric
acid
|
8,076
|
9,433
|
(14)
|
|
Fertilizer
|
32,749
|
29,257
|
+12
|
|
Other
income
|
6,070
|
5,929
|
+2
|
|
Total revenue1
|
56,182
|
54,092
|
+4
|
1 Totals may not
add up due to rounding
While
rock revenues fell 2 percent in 2020, due primarily to lower rock prices and a
less favorable product mix, the higher export volumes helped offset a portion
of the price decline, as did closure of some worldwide production units due to
COVID-19, the group said.
Phosphate
rock volumes increased 9 percent in 2020, to 10.3 million mt, up from the
previous year’s 9.5 million mt. The higher rock export volumes were mostly to
Europe and Latin America. OCP said the increased rock export volumes were also
driven “by strong demand in North America explained by sales to the Mosaic
Co. following the closure of the Bayovar mine in Peru.” Mosaic’s Peruvian
Miski Mayo phos rock mining operation was impacted by COVID-19 early last year
(GM March 27, 2020).
OCP’s
fertilizer sales revenues expressed in local currency increased by 12 percent
last year, due to higher export volumes that offset the impact of year-over-year
price declines. OCP said the increase in sales volumes was driven by strong
demand from major importing regions, notably India and Brazil.
Fertilizer
sales volumes increased 27 percent year-over-year to 11.3 million mt, up from
9.0 million mt. The group noted increased export volumes to Brazil, India, and
the African continent “largely offset” the drop in phosphate
fertilizer exports to North America, particularly the U.S., following the U.S.
decision to impose countervailing duties on imports of phosphate fertilizers
from Morocco and Russia (GM Feb. 12,
p. 1; Nov. 25 & Dec. 31, 2020), as well as a drop in volumes exported to
Asia, especially to Bangladesh following the implementation of government
restrictions on imports.
Phosphoric
acid sales volumes last year, however, were 7 percent down over 2019, at 1.8
million mt P2O5 versus 2.0 million mt P2O5.
The
group reported that its strong FY2020 performance was supported by lower
year-over-year sulfur and ammonia prices.
For the
fourth quarter of 2020, OCP reported a more than doubling in EBITDA expressed
in local currency, to MAD4.98 billion ($544 million), up from the prior year
MAD2.26 billion ($233 million), while revenues for the quarter grew 25 percent
to MAD14.50 billion ($1.6 billion), up from MAD11.64 billion ($1.21 billion).
OCP
said market fundamentals should remain strong in 2021, with good consumption
expected in all regions over the year, reflecting improved farmer economics
across geographies as well as lower inventories in certain markets.
“Specifically,
we anticipate strong growth in Africa, good spring application in the U.S., and
steady consumption levels in Europe,” said the group. “In Brazil,
favorable currency dynamics and strong soybean demand from China should drive
increased consumption. In India, imports should be higher resulting from lower
inventories and increased subsidy.”
The
Moroccan group expects pricing conditions to remain favorable this year, as
supply remains stable and raw material prices are on the rise.
OCP
reported its capital expenditure last year fell by 31 percent compared to the
2019 capex in local currency, to MAD9.57 billion ($1.0 billion), down from MAD13.96
billion ($1.45 billion).
