Fertiglobe, the OCI NV- Abu Dhabi National Oil Co. (ADNOC) Middle Eastern ammonia and urea joint venture, reported a 75% increase in adjusted net profit attributable to shareholders of the company for the 12 months to Dec. 31, 2022, to $1.29 billion, up from $736.6 million the previous year. Diluted earnings per share were $0.151, versus the year-ago $0.085.
Last year, marked the company’s first full year trading as a listed company, being listed on the Abu Dhabi Securities Exchange (ADX) on Oct. 27, 2021 (GM Oct. 29, 2021).
But fourth-quarter adjusted net profit attributable to shareholders dropped 48%, to $196.4 million (diluted EPS $0.021) compared with the year-ago $375.5 million (diluted EPS $0.044).
Adjusted EBITDA for the quarter fell 27% year-over-year, to $472.1 million, down from $647.6 million. Fourth-quarter revenues declined by 11% to $1.05 billion, down from $1.18 billion a year earlier.
The company cited lower urea selling prices compared to both fourth-quarter 2021 and third-quarter 2023, largely as a result of a drop in European natural gas prices combined with a delay in demand during the seasonally slow winter months.
Major turnarounds at the company’s facilities in the UAE and Egypt during the quarter also impacted the result.
Nevertheless, total product sales volumes in the quarter were 6% up year-over-year, reaching 1.51 million mt, up from 1.43 million mt. Of these totals, Fertiglobe own product sold volumes increased 3% to 1.27 million mt, while third-party traded volumes grew 24% to 240,000 mt.
For the full-year 2022, adjusted EBITDA came in 59% higher to $2.47 billion, up from $1.55 billion the previous year, while revenues increased 52% to $5.03 billion against the year-ago $3.31 billion.
FY2022 sales volumes dipped 1%, to 6.52 million mt from 6.59 million mt. Fertiglobe’s own product sales volumes fell 3%, to 5.43 million mt from the year-ago 5.57 million mt, which more than offset a 7% increase in third-party traded volumes to 1.09 million mt, up from 1.02 million mt.
After the completion of several turnarounds across its plants last year, including in the fourth quarter in the UAE and Egypt, Fertiglobe said it does not have further turnarounds planned at these facilities in 2023.
Fertiglobe reported that it has a good order book going into the first quarter of 2023. The company also highlighted that it made trial shipments of Diesel Exhaust Fuel (DEF/AdBlue) from Egypt to Europe in the fourth quarter of 2022 and early 2023, and expects to deliver more shipments over the course of this year.
Looking ahead, Fertiglobe believes that despite the recent declines in European gas and nitrogen fertilizer markets, fundamentals for nitrogen and farm economics are healthy. The company consequently expects demand to recover in 2023 to support the rebuilding of “decades-low global grain stocks,” which it believes will take at least until 2025.
The company also sees tight supply dynamics over 2023-2027, citing industry consultations’ expectations of no new major greenfield urea supply coming online in 2023 and limited additions to 2026, and new Russian supply still delayed.
It expects feedstock pricing to remain volatile in the short-term given weather and regulation intervention, but sees feedstock pricing remaining “well above historical averages,” with 2023-2025 forward European natural gas prices at around $17/mmBtu (around 3x higher than 2015-2019).
Fertiglobe announced second-half dividends at $700 million, or the equivalent of AED 0.31 per share, in line with its previous guidance. The dividend will be presented for approval at the next AGM, the date of which is yet to be announced, and is payable in April. It brings total dividends payout for the full-year 2022 to $1.45 billion (including the $750 million first-half 2022 dividend paid to shareholders in October).
Fertiglobe product sales volumes (‘000 mt)
| 4Q-2022 | 4Q-2021 | % change | FY2022 | FY2021 | % change | |
| Own product | ||||||
| Ammonia | 325 | 243 | +34 | 1,227 | 1,287 | (5) |
| Urea | 947 | 991 | (4) | 4,204 | 4,286 | (2) |
| Total own product sold | 1,272 | 1,234 | +3 | 5,431 | 5,573 | (3) |
| Ammonia | 84 | 40 | +109 | 297 | 144 | +106 |
| Urea | 156 | 153 | +2 | 791 | 873 | (9) |
| Total traded third-party product | 240 | 193 | +24 | 1,088 | 1,017 | +7 |
| Total own product and traded third-party | 1,512 | 1,427 | +6 | 6,519 | 6,590 | (1) |