Polish fertilizer and chemicals company Grupa Azoty SA said on April 11 it will take a Pln34.2 million (approximately $8 million at current exchange rates) hit to its FY22 financial results from the recent production stoppage at subsidiary Zakłady Chemiczne Police S.A, according to a Polish Press Agency (PAP) report, citing a company market filing.
At Police, the negative impact of the stoppage is estimated at Pln60 million.
The hit is due to the cost of repairing two boilers at the power plant at the Police production site that caused the production stoppage and the loss of profit as a result of the production outage.
Zakłady Chemiczne Police on March 9 declared a force majeure event due to the failure of the two boilers, which resulted in “a temporary stoppage or a very significant limitation of production” (GM March 18, p. 32).
The subsidiary was able to partly restore production later that month after it was able to fix one of the two boilers that had broken down (GM March 25, p. 29). This week, the company reported the stoppage fully ended on April 8.
Meanwhile, Grupa Azoty posted preliminary results for fourth-quarter 2021, ending Dec. 31. It expects group net profit to soar to Pln365 million, up from the year-ago Pln92, according to a company market filing cited by PAP.
Group EBITDA is also expected to surge to Pln887 million in the fourth quarter, up from Pln318.7 million, while revenues are expected to double to Pln5.48 million from Pln2.74 million.
Grupa Azoty’s Fertilizers/Agro business segment is expected to see a fourth-quarter EBITDA of Pln355 million.
The fertilizers and chemicals group said the segment’s positive results were boosted by higher sales prices of all the fertilizer products, which offset declines in sales volumes. It highlighted that the higher prices came on the back of higher production costs, mirroring trends seen by other European fertilizer producers.
Grupa Azoty reminded it did not stop or reduce fertilizer production in the fourth quarter, and said its fertilizer prices were “one of the lowest in the European Union” as the group made efforts to secure the demand on the domestic market.
The group sees full-year 2021 net profit at Pln633 million and EBITDA at Pln1.95 billion. Full-year revenues are expected to come in at Pln15.9 billion.
It expects to publish its 2021 financial report on April 27.