Polish fertilizers and chemicals group Grupa Azoty SA will get a Pln182.2 million (approximately $44.6 million at current exchange rates) boost to its second-quarter group EBIT and EBITDA results from the sale of excess European Union allowances (EUA) by its subsidiary Zakłady Azotowe Puławy, according to a Polish News Agency (PAP) report, citing a company filing.
The excess EUAs are due to lower production in 2022 amid soaring gas prices, and ensuing lower CO2 emissions. The value of the EUA sales totaled €80.8 million (approximately $88.3 million at current exchange rates) or Pln360.2 million, according to the report.
The sale will also help Azoty’s liquidity situation and its consolidated net debt level, the Polish group said.
Azoty posted a group net loss of Pln555 million and an EBITDA loss of Pln401 million for the first quarter ended March 31, 2023 (GM May 26, p. 26). The group has warned that it may breach debt covenants at the end of the second quarter (GM May 19, p. 26). Azoty has said it likely will exceed the 4.0x net debt-to-EBITDA level allowed in covenants at the end of the first half of 2023.
In a move to improve its financial standing, the Polish fertilizers and chemicals group in early June signed a cooperation and non-disclosure agreement with Polish energy group Orlen SA for the potential sale of Puławy (GM June 9, p. 1). The Puławy unit, which produces urea, ammonium nitrate, caprolactam, and melamine, is Azoty’s most profitable subsidiary.