OCP Group SA reported a 49% drop in net income for the 12 months to Dec. 31, 2023, to MAD14.37 billion (approximately $1.4 billion at current exchange rates) from MAD28.19 billion the previous year.
Full-year EBITDA fell by 41%, to MAD29.40 billion ($2.9 billion) from the prior year’s MAD50.08 billion ($4.93 billion), while revenues were down 20%, to MAD91.28 billion ($9.02 billion) from MAD114.57 billion ($11.28 billion).
“The significant downward pressure on prices seen in the first half of 2023, following the exceptional price levels of 2022, eased during the third and fourth quarters,” the company said in a March 28 media release.
OCP noted that this improvement was driven by a number of factors, including lower Chinese exports coupled with a gradual increase in demand across major agricultural regions, including the US, Europe, and Brazil, driven by depleted inventory levels and favorable economic conditions for farmers.
The company also highlighted that since the start of July 2023, the cost of raw materials, especially ammonia, increased sharply as a result of unforeseen supplier shutdowns and a significant uptick in gas prices in Europe, further contributing to the upward pressure on fertilizer prices during the second half of the year.
OCP cited lower selling prices across all its product categories compared with 2022 for the decrease in FY2023 revenues. The company provided a preliminary report on its FY2023/4Q 2023 revenues in late February (GM March 1, p. 27).
OCP FY2023 Revenues
| $ million | FY2023 | FY2022 | % change |
| Total revenue | 9,020 | 11,284 | (20) |
| Phosphate Rock | 1,506 | 1,812 | (17) |
| Phosphoric Acid | 720 | 1,215 | (41) |
| Fertilizers | 5,976 | 7,278 | (18) |
The company noted that despite a material fall in fertilizer export prices, its full-year fertilizer revenues were only 18% below FY2022 levels in local currency. It said the decline was somewhat mitigated by rising export volumes, bolstered by improved demand in some regions including South America and Europe.
Rock revenues were down 18% and phosphoric acid revenues down 40% compared to the previous year in local currency. OCP said these results primarily reflected the normalization of prices after 2022, which was partially offset by increased export volumes in the second half of 2023. The company highlighted a significant increase in exports to India to serve last-minute demand late in the third quarter and through the fourth quarter.
Fertilizers contributed 66% to OCP’s revenues in 2023, with TSP volumes increasing substantially year-over-year, accounting for 15% of fertilizer sales volumes, up from 11% in 2022. The company said TSP saw increased demand particularly among clients in India, Brazil, and other parts of South America and Africa “due to its efficacy in responding to demand for fertilizers across various soil types.”
OCP said it sold 11.3 million mt of fertilizers in 2023, a 30% increase on the 8.7 million mt sold the previous year. Of that total, it sold 1.7 million mt of TSP last year, up from 0.9 million mt in 2022, with 0.5 million mt going to Bangladesh and 0.8 million mt to Brazil.
The company brought into operation the first of two TSP fertilizer production lines at the Jorf Lasfar Chemical Site in May and December last year, and is scheduling the third line to become operational by the end of this year’s first quarter. OCP said it would deploy the new TSP capacities gradually “to support the anticipated demand recovery.” Each of these three lines is capable of producing 1 million mt/y equivalent of DAP, it said.
OCP reported a 72% increase in fourth-quarter EBITDA, to MAD12.22 billion ($1.20 billion) from MAD7.11 billion ($615 million) in 2022. Fourth-quarter revenues rose 21%, to MAD30.24 billion ($2.99 billion) from MAD25.04 billion ($2.33 billion) in 2022. OCP cited higher 4Q demand and a “substantial” increase in volumes across all product categories compared with 2022, which more than offset the impact of lower prices.
Looking ahead, the company sees a balanced supply and demand market in 2024 reflecting anticipated continued demand recovery in North America, Southeast Asia, and Europe, and “at least stable” imports for India and Brazil thanks to globally low stocks and favorable weather. OCP also sees continued growth in Africa.
OCP, which is 94.6% owned by the Moroccan government, plans to pay out MAD9.1 billion (approximately $889 million at current exchange rates) in dividends for 2023, despite the 49% drop in its net income, according to a Bloomberg report on March 28.