Russian fertilizer group PhosAgro PJSC, Moscow, reported that its production of fertilizers and other chemicals reached 11.1 million mt in 2022, a 4.6% increase compared with 10.59 million mt the previous year (GM Feb. 3, p. 27).
Fertilizer sales volumes in 2022 grew 6% year-over-year, to 11.1 million mt from 10.43 million mt in 2021. FY2022 sales volumes were an all-time record, the group said in a March 3 statement.
Phosphate-based fertilizer and feed phosphate sales volumes increased by 8%, to 8.4 million mt from the prior year’s 7.76 million mt, while nitrogen fertilizer sales volumes were up 2%, to 2.55 million mt from 2.5 million mt the previous year.
PhosAgro attributed the sales volume growth to the increase in production volumes and strong demand for fertilizers in Russian and global markets.
The increased sales volumes of end products, combined with higher average sales prices in world markets and a focus on sales of high-margin fertilizers, helped boost PhosAgro’s FY2022 revenue by 35% compared with the previous year, the group reported.
At the same time, revenue grew faster than the cost of sales, which rose by about 23% during the 12 months. Revenue reached RUB569.5 billion ($8.3 billion), up from RUB420.5 billion the year before.
FY2022 adjusted EBITDA increased 39%, to RUB266.9 billion ($3.9 billion) from RUB192.1 billion. Adjusted net profit for the year rose 40%, reaching RUB182.3 billion, up from RUB130.5 billion.
PhosAgro’s results for the fourth quarter of 2022, however, were weaker than last year. Lower phosphate fertilizer prices and a stronger ruble led to a 14% drop in revenue, Interfax reported.
Adjusted EBITDA for the final quarter was down almost 28% at RUB44.5 billion, and below the Interfax Consensus estimates of RUB46.3 billion. Downward pressure came from rising commodity prices, higher inflation, and a higher Mineral Extraction Tax (MET) for apatite-nepheline ore production compared to the year before, according to the report.
Fourth-quarter adjusted profit fell 29% on the previous year, to RUB32.1 billion, slightly missing analysts’ expectations of RUB32.6 billion.
Looking ahead, PhosAgro said the market for nitrogen-based fertilizers in the first quarter of 2023 has been marked by excess supply due to high levels of carryover stocks in European countries, as well as in North and South America, which the company said continues to have a negative impact on prices.
The group said phosphate-based fertilizers have now stabilized. “Prices can expect support from an increase in seasonal activity in South America, and in Brazil in particular, as well as in the US domestic market following a significant reduction in imports in 2022,” PhosAgro said.
The group reported that its net debt as of Dec. 31, 2022, had increased to RUB180.3 billion ($2.6 billion), up from RUB153.7 billion as of Dec. 31, 2021. The group’s net debt/EBITDA ratio, however, decreased to 0.68x at the end of 2022 versus 0.80x at the end of 2021.
Based on the FY2022 results, PhosAgro’s Board of Directors has recommended paying dividends of RUB465 ($6.11) per share from retained earnings, and approved April 4 as the dividend record date. The dividend will be discussed at a general meeting on March 24.
PhosAgro Production and Sales Volumes
| ‘000 mt | FY2022 | FY2021 | % change |
| Production | |||
| Phosphate fertilizers and feed phosphates | 8,224 | 7,894 | +4 |
| Nitrogen fertilizers | 2,547 | 2,412 | +6 |
| Other products | 302 | 280 | +8 |
| Total | 11,073 | 10,585 | +5 |
| Sales Volumes | |||
| Phosphate fertilizers and feed phosphates | 8,403 | 7,762 | +8 |
| Nitrogen fertilizers | 2,551 | 2,495 | +2 |
| Other products | 144 | 177 | (19) |
| Total | 11,098 | 10,434 | +6 |