OCP SA, Casablanca, reported a first-half net profit of MAD4.698 billion (approximately $517 million at current exchange rates), versus a year-ago net loss of MAD573 million. Revenues increased by 19 percent, to MAD32.48 billion ($3.65 billion), up from the year-ago MAD27.40 billion ($2.8 billion).
Six-month EBITDA increased by 48 percent, to MAD12.53 billion ($1.41 billion), up from MAD8.49 billion ($868 million) the previous year.
OCP released preliminary revenues and capex figures for the reporting period at the beginning of this month (GM Sept. 3, p. 25).
“OCP’s industrial flexibility enabled us to shift a portion of our export volumes to phosphoric acid to accommodate changing demand trends. This, combined with favorable pricing and our streamlined cost structure, resulted in a 19 percent year-on-year increase in revenues in local currency and an 800 basis-point increase in our EBITDA margin to 39 percent [1H 2020: 31 percent], the highest level in the past decade,” said OCP Chairman and CEO Mostafa Terrab.
“These strong results were achieved as OCP’s processed phosphate production increased from first-half 2020 levels, representing higher demand for phosphoric acid, while fertilizer production volumes were lower,” he said.
First-half phosphate rock revenues in local currency were up 11 percent on the prior year, while phosphoric acid and fertilizer revenues increased 27 percent and 20 percent, respectively. In U.S. dollars, rock revenues increased 21 percent, acid revenues were up 39 percent, and fertilizers revenues rose 31 percent.
OCP revenues breakdown
| $ million | 1H-2021 | IH-2020 | % change |
| Total Revenue1 | 3,650 | 2,800 | +30 |
| Of which: | |||
| Phosphate rock | 455 | 551 | +21 |
| Phosphoric acid | 402 | 559 | +39 |
| Fertilizers | 1,653 | 2,165 | +31 |
1 Includes other revenues sources
The group said the improved prices across all three product categories, as well as the higher acid export volumes, helped mitigate lower rock and fertilizer sales volumes compared with a year ago.
OCP attributed the lower fertilizer volumes as primarily due to the group’s depleted inventory levels at the start of 2021 – given, it said, the high production and export volumes achieved in 2020, which included 11 million mt of fertilizers. The shift of a portion of its exports to phosphoric acid to match demand also impacted fertilizer sales volumes.
OCP selected export volumes1
| 1H-2021 | IH-2020 | % change | |
| Phosphoric acid million mt P2O5 | 0.962 | 0.814 | +18 |
| Fertilizers million mt | 5.2 | 5.7 | (9) |
| Of which: | |||
| DAP/MAP | 3.1 | 3.7 | (16) |
| TSP | 0.6 | 0.5 | +20 |
| NPS and NPK | 1.6 | 1.5 | +7 |
1 Excludes phosphate rock exports
OCP said it saw a 0.2 million mt increase in its first-half fertilizer exports to Africa, but a 0.4 million mt decrease in fertilizer exports to North America and a 0.3 million mt fall to South America, compared with the same year-ago period.
The group posted a 20 percent rise in second-quarter revenues to MAD18.19 billion ($2.05 billion), up from the previous year’s MAD15.13 billion ($1.53 billion). Second-quarter EBITDA came in 39 percent up, at MAD7.2 billion ($809 million), versus the year-ago MAD5.17 billion ($523 million).
OCP expects market conditions to remain “very favorable” in the second half of 2021.
“Strong agricultural fundamentals, a balanced supply/demand position, and increased raw materials prices will drive further pricing improvement, particularly in the third quarter ahead of primary application season in most countries,” Terrab said. “Specifically, we expect high demand in the Americas, supported by solid corn and soybean prices and in India, where inventories remain low.”
OCP reported its capital expenditure in the first-half of 2021 totalled MAD4.3 billion ($482 million), 15 percent lower in local currency terms than the year-ago spend of MAD5.09 billion ($520 million).