Polish fertilizers and chemicals producer Grupa Azoty SA confirmed a Pln79.4 million (approximately $17.48 million at current exchange rates) net loss for the third quarter ended Sept. 30, 2022, and an 11% decline in EBITDA in line with the preliminary figure (GM Nov. 4, p. 32) to Pln266.6 million, according to the company’s third-quarter financial statement.
The third-quarter net loss compared with a net profit of Pln14 million and an EBITDA of Pln300.2 million for the same year ago period. Revenue increased by 63% to Pln6.31 billion, up from Pln3.88 billion the previous year.
Azoty said the financial results were driven primarily by the impact of Russia’s invasion of Ukraine and an unprecedented rise in the price of natural gas as the key feedstock used in fertilizer production.
It said the key negative driver of the group’s performance was production cuts due to high feedstock prices that resulted in lower sales volumes.
Azoty noted gas prices hit all-time highs this past August, which resulted in the decision to temporarily curtail production at some of the group companies’ plants in Tarnów, Puławy, and Kędzierzyn-Kožle (GM Aug. 26, p. 1).
Fertilizer production was resumed by the group companies in October (GM Oct. 28, p. 29; Oct. 14, p. 28).
The Fertilizers/Agro business segment – the group’s biggest segment in terms of turnover – posted a 228% jump in third-quarter EBITDA to Pln62.2 million, up from the year-ago Pln18.97 million. Segment revenue increased by 87% year-over-year to Pln3.94 billion, up from Pln2.11 billion.
Following the restart of fertilizer production, Azoty and Puławy have offered their customers “much lower prices” for nitrogen fertilizers, indicating prices “significantly below the Pln4,000 per mt mark are what the market expects, allowing the continuation of economically viable agricultural production” (GM Oct. 21, p. 31).
For the nine-months to Sept. 30, 2022, Azoty reported a jump in net profit to Pln1.6 billion on revenues of Pln19.55 billion, up from the same prior-year period Pln267.69 million and Pln10.42 billion, respectively.
Nine-months EBITDA rose by 165% to Pln2.84 billion, up from the same year-ago period Pln1.07 billion.