OCP SA, Casablanca, reported a 14 percent rise in net profit for full-year 2020 for controlling interests, to MAD3.23 billion (approximately $354 million at current exchange rates) on revenue of MAD56.18 billion ($5.93 billion), up from the previous year’s MAD2.84 billion and MAD54.09 billion ($5.62 billion), respectively.
Full-year EBITDA increased 22 percent to MAD18.66 billion ($1.96 billion), up from MAD15.33 billion ($1.59 billion).
“The year 2020 was one of the most challenging business periods in recent history … Nevertheless, the full-year results represented significant year-on-year gains across all key metrics,” said OCP Chairman and CEO Mostafa Terrab.
“Our results benefited from a gradually improving market environment, which led to a progressive increase in prices throughout the year. Higher fertilizer exports, coupled with lower raw material prices and cost savings, contributed to substantial operating leverage in 2020, resulting in the full year EBITDA growth of 22 percent on a 4 percent revenue increase expressed in local currency,” he added.
The revenue increase was largely driven by higher fertilizer and phosphate rock export volumes last year compared with 2019.
Revenue by product
| Millions of dirhams | FY2020 | FY2019 | % change |
| Phosphate rock | 9,287 | 9,474 | (2) |
| Phosphoric acid | 8,076 | 9,433 | (14) |
| Fertilizer | 32,749 | 29,257 | +12 |
| Other income | 6,070 | 5,929 | +2 |
| Total revenue1 | 56,182 | 54,092 | +4 |
1 Totals may not add up due to rounding
While rock revenues fell 2 percent in 2020, due primarily to lower rock prices and a less favorable product mix, the higher export volumes helped offset a portion of the price decline, as did closure of some worldwide production units due to COVID-19, the group said.
Phosphate rock volumes increased 9 percent in 2020, to 10.3 million mt, up from the previous year’s 9.5 million mt. The higher rock export volumes were mostly to Europe and Latin America. OCP said the increased rock export volumes were also driven “by strong demand in North America explained by sales to the Mosaic Co. following the closure of the Bayovar mine in Peru.” Mosaic’s Peruvian Miski Mayo phos rock mining operation was impacted by COVID-19 early last year (GM March 27, 2020).
OCP’s fertilizer sales revenues expressed in local currency increased by 12 percent last year, due to higher export volumes that offset the impact of year-over-year price declines. OCP said the increase in sales volumes was driven by strong demand from major importing regions, notably India and Brazil.
Fertilizer sales volumes increased 27 percent year-over-year to 11.3 million mt, up from 9.0 million mt. The group noted increased export volumes to Brazil, India, and the African continent “largely offset” the drop in phosphate fertilizer exports to North America, particularly the U.S., following the U.S. decision to impose countervailing duties on imports of phosphate fertilizers from Morocco and Russia (GM Feb. 12, p. 1; Nov. 25 & Dec. 31, 2020), as well as a drop in volumes exported to Asia, especially to Bangladesh following the implementation of government restrictions on imports.
Phosphoric acid sales volumes last year, however, were 7 percent down over 2019, at 1.8 million mt P2O5 versus 2.0 million mt P2O5.
The group reported that its strong FY2020 performance was supported by lower year-over-year sulfur and ammonia prices.
For the fourth quarter of 2020, OCP reported a more than doubling in EBITDA expressed in local currency, to MAD4.98 billion ($544 million), up from the prior year MAD2.26 billion ($233 million), while revenues for the quarter grew 25 percent to MAD14.50 billion ($1.6 billion), up from MAD11.64 billion ($1.21 billion).
OCP said market fundamentals should remain strong in 2021, with good consumption expected in all regions over the year, reflecting improved farmer economics across geographies as well as lower inventories in certain markets.
“Specifically, we anticipate strong growth in Africa, good spring application in the U.S., and steady consumption levels in Europe,” said the group. “In Brazil, favorable currency dynamics and strong soybean demand from China should drive increased consumption. In India, imports should be higher resulting from lower inventories and increased subsidy.”
The Moroccan group expects pricing conditions to remain favorable this year, as supply remains stable and raw material prices are on the rise.
OCP reported its capital expenditure last year fell by 31 percent compared to the 2019 capex in local currency, to MAD9.57 billion ($1.0 billion), down from MAD13.96 billion ($1.45 billion).