Arab Potash Co. (APC) reported a 44 percent increase in nine-month net profit after taxes, provisions, and royalties to JD88.8 million (approximately $125.2 million) on consolidated revenue of JD350 million, up from the year-ago JD61.7 million and JD312 million, respectively.
APC Chairman Jamal Al-Sarayrah attributed the growth in profits to the increase in potash prices following the inking of new contract deals with China and India during the second half of the year. China and India accounted for around 47 percent of the company’s annual potash sales volumes last year. He added that the nine-month profits also coincided with “the huge budget” allocated for the maintenance of APC’s plants and infrastructure.
Potash sales revenues last year accounted for some 86 percent of the company’s total sales revenues.
Nine-month potash production increased by 7 percent to 1.81 million mt, up from the year-ago 1.68 million mt. Potash sales volumes were 3 percent higher at 1.82 million mt, against 1.77 million mt in the same prior-year period.
APC President and CEO Brent Heimann believes potential incremental supply additions to the international market during 2019 following the entry of new producers may put downward pressure on international potash prices. He warned that this could accordingly affect the Jordanian producer’s profit margin, especially given the company’s production costs are among the highest when compared to other international producers, despite its efforts over recent years to reduce production costs.
In this regard, APC has been seeking alternatives to expensive energy sources as an important part of its strategy to reduce its production costs.