PhosAgro, Moscow, reported a 93 percent increase in fourth-quarter net income, to RUB12.96 billion on revenue of RUB58.89 billion ($773 million), up from the year-ago RUB6.7 billion and RUB53.14 billion, respectively.
Net income adjusted for non-cash foreign exchange gain and other non-cash items came in almost three times up on the year at RUB7.48 billion ($98 million), up from RUB2.53 billion.
Fourth-quarter EBITDA increased 64 percent year-over-year, to RUB18.39 billion ($241 million), up from RUB11.19 billion, but missed analysts’ average estimate of RUB18.93 billion (Interfax, five estimates).
The Russian fertilizer group attributed the main growth drivers for the EBITDA increase as the recovery in global fertilizer prices and the completion of equipment upgrades and operational improvements at production facilities. Additional supporting factors were the weakening of the ruble against the U.S. dollar and low prices for primary feedstocks, it said.
Revenue for the quarter increased by 11 percent year-on-year to RUB 58.9 billion ($773 million) with the recovery of prices for phosphate- and nitrogen-based fertilizers on the back of a weaker rouble as the main drivers.
“2020 was a record year for PhosAgro in terms of both production volumes and the group’s ability to generate cash flows,” said PhosAgro CEO Andrey Guryev. “Implementation of our long-term development strategy enabled us to exceed, for the first time, 10 million mt of commercial production in a year, and fertilizer sales increased by more than 5 percent year-on-year.”
The group’s full-year net income sunk to RUB16.92 billion on foreign exchange losses, down from the previous year’s RUB49.41 billion. However, net income adjusted for these forex losses was RUB46.79.billion ($649 million), some 26 percent higher than the year-earlier RUB37.06 billion.
Full-year EBITDA rose 12 percent, to RUB84.28 billion ($1.17 billion), up from RUB75.58 billion, while revenue increased 2 percent year-on-year, to RUB253.88 billion ($3.5 billion), up from RUB248.13 billion.
Total sales volumes in 2020 reached 9.96 million mt, but fourth-quarter sales declined 10 percent on the corresponding year-earlier quarter, to 2.04 million mt.
The PhosAgro CEO is positive about demand and prices going forward.
“The start of 2021 has shown a noticeable increase in prices for major agricultural crops, which, combined with the growth in seasonal demand in key sales markets (Europe, the U.S. domestic market, and China in particular), contributed to a significant increase in demand and prices for all major types of mineral fertilizers and raw materials for production,” said Guryev.
In addition to these factors, the CEO highlighted that support for fertilizer demand in the near term can be expected from the Indian market, where he sees low carryover stocks may be conducive to an earlier start of major seasonal purchases.
PhosAgro Sales Volumes
| ‘000 mt | 4Q-2020 | 4Q-2019 | % change | FY-2020 | FY-2019 | % change |
| Phosphate-based fertilizers | 1,545 | 1,738 | (11) | 7,669 | 7,255 | +6 |
| Nitrogen-based fertilizers | 500 | 537 | (7) | 2,286 | 2,197 | +4 |
| Total sales | 2,045 | 2,275 | (10) | 9,955 | 9,452 | +5 |