OCP Group SA, Casablanca, reported a net income attributable to shareholders of the company of MAD16.85 billion (approximately $1.5 billion at current exchange rates) for the six months to June 30, 2022, up from the year-ago MAD4.63 billion.
Revenue in US dollars increased by 58% to $5.76 billion, up from $3.65 billion the previous year. Six-month EBITDA more than doubled to $2.89 billion from the prior-year $1.41 billion.
OCP attributed its “exceptional financial performance” in the first half of 2022 to higher selling prices across all its product categories, together with continued production and operating efficiencies.
“Substantial double-digit revenue growth was achieved in each of our three product categories, as higher prices more than offset lower volumes, “said OCP in its results statement.
The producer highlighted the sharpest revenue increase was seen in fertilizers, where revenue increased 69% year-over-year to represent “a record” 63% of the group’s total first-half revenue, up from 60% in the same prior-year period. It said high-demand markets such as South America and Africa accounted for 56% of total six-month revenues, and mitigated the impact of lower export volumes.
First-half phosphate rock revenues were up 63%, with OCP citing improved rock prices year-over-year which again offset lower export volumes to most key importing regions.
Higher selling prices also boosted phosphoric acid revenues, which increased 24% from a year-ago. The company noted the price increase was partially offset by lower acid export volumes to Asia, as a result of delayed second-quarter phosphoric acid imports.
Revenue breakdown by product
| $ million | 1H-2022 | 1H-2021 | % change |
| Phosphate rock | 897 | 551 | +63 |
| Phosphoric acid | 692 | 559 | +24 |
| Fertilizers | 3,659 | 2,165 | +69 |
Second-quarter revenues increased by 51% to $3.09 billion, up from the year-ago $2.05 billion, while EBITDA for the quarter doubled to $1.67 billion from $809 million.
Looking ahead, OCP said the record first-half results “have set the stage” for 2022 to be another year of strong operating and financial performance for the group.
The producer noted that prices have eased “substantially” in line with lower input costs, and expects them to remain stable throughout the second-half of 2022. At current prices, demand should increase from first-half levels, reflecting more favorable farm economics and low inventories in several regions, together with limited global supply, it said.
Regionally, OCP expects high Indian phosphates imports to continue in 2022/2023, given the good monsoon and low stocks compared with historical levels. It also believes US and European demand should pick-up after two consecutive bad seasons.
On the supply side, OCP sees China export restrictions continuing to at least the first quarter of 2023, and adding more tightness to the market.
The producer reported its ongoing capacity expansion program, which it noted is modular in design, should yield additional customized product capacity beginning in fourth-quarter 2022. It reported it would have “additional” TSP capacity available in the fourth-quarter of 2022, but did not provide any numbers.
OCP further said it has “major production ramp-ups” scheduled for 2023 and 2024, but these would be “calibrated” to market conditions.
The group sees limited new supply capacities elsewhere.