Uralkali, Moscow, moved into the red in FY2020, reporting a IFRS net loss of $43 million, versus a prior-year net profit of $1.22 billion. In its earnings statement, the company cited mainly foreign exchange losses and losses on revaluation of derivatives totaling $733 million as behind the profitability downturn.
The company saw EBITDA fall 23 percent, to $1.22 billion, down from the year-ago $1.58 billion, while revenue dipped 3 percent, to $2.7 billion from $2.78 billion.
Potassium chloride production increased 2 percent to 11.3 million mt last year, up from the previous year’s 11.1 million mt, while sales volumes were up by close to 30 percent on the year, to 12.7 million mt from 9.8 million mt.
The biggest increase was in export sales volumes, which rose 36 percent to 10.1 million mt, up from 7.4 million mt, which the company attributed mainly to the recovery of demand and “the favorable environment” in the global potash market.
While Uralkali did not provide regional sales volumes figures, revenue from sales to China, India, and Southeast Asia in aggregate were up 38 percent year-over-year to $1.01 billion, while revenue from sales to Latin America and the U.S. was down 26 percent, according to the company’s consolidated financial statements for FY 2020. Revenue from sales to Europe and other countries increased 5 percent over the prior year.
Proportion of revenue by region (percent)
| FY2020 | FY2019 | % year-on-year change in sales revenues | |
| Russia | 17 | 21 | (19) |
| China, India, and Southeast Asia | 37 | 26 | +38 |
| Latin America and the U.S. | 30 | 38 | (26) |
| Europe, other countries | 16 | 15 | +5 |
| Total revenues | 100 | 100 | (3) |
Sales to the domestic market increased 8 percent over last year, to 2.6 million mt, up from 2.4 mt, with the company citing increased supplies to agricultural producers.
However, the average export price per mt of potassium chloride on FCA terms declined 29 percent year-over-year to $166/mt, down from $235/mt in 2019, reflecting the price changes in international markets.
“In general, 2020 saw a gradual recovery of demand for potash in most key markets, which in turn had a positive impact on last year’s pricing,” said Uralkali CEO Vitaly Lauk. “We are optimistic about the potash industry’s dynamics in 2021 and believe that both short-term and mid-term positive market conditions will be preserved.”
The potash producer estimates that global potash deliveries last year increased to 67 million mt, up from 64 million mt in 2019.
For 2021, Uralkali said it expects global potash demand to remain at a high level amid supply availability, favorable weather, and major crop expectations, and estimates global potash sales increasing to 68-69 million mt this year.
Uralkali’s net debt stood at $4.195 billion as of Dec. 31, 2020, and its net debt/EBITDA ratio increased to 3.43x (End 2019: 3.07x).
Since early December last year, Uralkali has been majority owned by Dmitry Mazepin’s Uralchem, when Mazepin/Uralchem increased its stake to 81.47 percent from 46.4 percent (GM Dec. 4, 2020). Just the week before, Uralkali named Vitaly Lauk as the potash company’s new CEO, replacing Dmitry Osipov, who had been in the position since December 2013 (GM Nov. 27, 2020).