EuroChem Group AG, Zug, Switzerland reported a 17 percent increase in full-year 2020 EBITDA to $1.81 million, up from the year-ago $1.55 million. Sales were marginally down on the year at $6.17 billion, versus the previous year’s $6.18 billion.
“The company-record EBITDA figure comes despite the turbulence of the global coronavirus pandemic and lower average prices for fertilizers during 2020,” the group said. “The key contributors were an increase in output, strong prices for iron ore concentrate, EuroChem’s key byproduct, and favorable currency exchange rates.”
The $1.8 billion EBITDA figure beats the previous company high of $1.7 billion posted in 2011.
EuroChem’s EBITDA margin for FY2020 appreciated by 4 percentage points and reached 29 percent, which the group attributed chiefly to an increase in potash production from its Usolskiy potash plant, south of Berezniki. Usolskiy produced 2.223 million mt last year, almost double 2019’s output of 1.14 million mt.
The group cited mainly a softer pricing environment in fertilizers for the flat total sales result in monetary terms. However, it reported that mining segment sales in monetary terms improved by 36 percent on high iron ore concentrate prices, despite just a 2 percent increase in sales volumes.
EuroChem’ s total sales volumes increased 8 percent to 25.63 million mt, up from 23.62 million mt in the previous year. Fertilizer sales accounted for 70 percent of the total, accounting for 17.91 million mt. Fertilizer sales volumes were 12 percent higher year-over-year, with the group citing production increases at the Usolskiy Potash Project and the EuroChem Northwest ammonia facility at Kingisepp. It said the Northwest ammonia plant was operating at full capacity in 2020. A 10 percent rise in third-party product sales also contributed.
Sales volumes of nitrogen, accounting for 35 percent of total sales volumes, rose by 3 percent, with CAN and UAN the leading product performers. A doubling of ammonia sales volumes, representing a 6 percent share in the nitrogen segment, contributed to the performance of nitrogen fertilizers as well.
Phosphates and complex fertilizers sales increased by 9 percent in volume terms, with NPKs and MAP the major drivers. DAP sales volumes decreased by 16 percent as the group prioritized MAP production due to more favorable market conditions. EuroChem said it changed the trade flows of its phosphate fertilizers mostly in favor of the Latin American market after the imposition of preliminary duties on phosphate fertilizers by the U.S. Department of Commerce in November 2020.
EuroChem’s potash sales doubled in 2020, reaching a new high of 2.2 million mt, and reflected the further ramp-up of its Usolskiy potash operation.
EuroChem Sales
| ‘000 mt | 2020 | 2019 | Percent Change |
| Nitrogen products | 8,949 | 8,652 | +3 |
| Nitrogen fertilizers | 8,912 | 8,637 | +3 |
| Phosphate products & complex fertilizers | 6,774 | 6,228 | +9 |
| Phosphate fertilizers | 2,681 | 2,542 | +5 |
| Complex fertilizers | 3,705 | 3,297 | +12 |
| Potash fertilizers | 2,191 | 1,104 | +98 |
| Total fertilizer sales | 17,914 | 15,984 | +12 |
| Total sales including third party | 25,626 | 23,624 | +8 |
| Third party sales | 5,349 | 4,844 | +10 |
The fertilizer group reported its sales to Latin America rose 20 percent in 2020 to 5.1 million mt, up from in the prior year. It said the region accounted for 25 percent of its total sales, with Brazil constituting the major driver at 22 percent.
EuroChem highlighted the Latin America’s importance to the group was underlined by the full consolidation of its main distributor in Brazil, fertilizer blender and distributor, Fertilizantes Tocantins (FTO), in August 2020, and ahead of schedule (GM Aug. 21, 2020; July 17, 2020). The group said it acquired the outstanding 50 percent holding interest minus one share for US$240 million.
The group bought its original 50 percent plus one share stake in FTO in July 2016 (GM July 8, 2016). It has added three new fertilizer blending plants to the six that were already part of the Brazilian company’s portfolio. The most recent blending unit at Araguari in Minas Gerais state was opened in June 2019 (GM June 7, 2019).
EuroChem Geography of Sales
| ‘000 mt | 2020 | 2019 | Percent change |
| Europe | 6,224 | 5,966 | +4 |
| Latin America | 5,089 | 4,255 | +20 |
| North America | 3,243 | 3,097 | +5 |
| Russia | 4,294 | 5,955 | (28) |
| Asia Pacific | 6,208 | 3,929 | +58 |
| Africa | 568 | 422 | +35 |
| Total Sales | 25,626 | 23,624 | +8 |