PJSC Uralkali, Moscow, swung to a first-half IFRS net profit of $535 million compared to a year-ago net loss of $180 million. Revenue was up 10 percent, to $1.46 billion versus $1.32 billion the previous year. EBITDA came in 31 percent higher, at $748 million, up from $570 million, with an EBITDA margin of 65 percent versus 54 percent in the same prior-year period.
“Global potash market conditions in the first half of 2021 were favorable, which reflects the operating results of the company. During the reporting period, there was a steady upward trend in potash prices in key spot markets, with predominant growth in the second quarter of the year, as well as an increase in global potash deliveries amid record major crops price levels supported by strong global demand, and reducing potash inventories in key regions due to limited supply,” Uralkali said.
Uralkali said the significant improvement in net profit mainly related to a $130 million gain from foreign exchange differences and fair value revaluation of derivative financial instruments in the reporting period compared to a $499 million loss in first-half 2020, as well as the increase in operating profits.
The company increased its potash output 19 percent year-over-year in the first half of 2021 to 6.2 million mt, up from 5.2 million mt.
But potash sales were down 2 percent, to 6.0 million mt from the year-ago 6.1 million mt. Export sales fell 4 percent to 4.6 million mt, down from 4.8 million mt. But deliveries to the domestic market increased 8 percent, to 1.4 million mt from 1.3 million mt, which the group attributed mainly to increased sales for complex fertilizers production, as well as to agricultural producers.
Six-month revenue from potassium chloride sales amounted to $1.27 billion, an increase of 6 percent. Revenue from sales of granular grades of potash accounted for 38 percent of potassium chloride sales, up from 36 percent a year-ago.
Industry fundamentals remain strong, and the company expects market conditions will continue to improve in the second-half.
The company sees global potassium chloride deliveries reaching 70-71 million mt this year.
As of June 30, 2021, the group’s net debt stood at $4.488 billion (June 30, 2020: $4.634 billion), with the ratio of net debt/EBITDA for the last 12 months amounting to 3.21x. In June, Urakali secured a sustainability-linked syndicated loan agreement with 18 international banks and financial institutions for a total of $1.25 billion, and was the first Central and Eastern European fertilizer producer to sign such a loan deal (GM June 11, p. 32).
Uralkali since December 2020 has been majority-owned (81.47 percent holding) by Dmitry Mazepin via Uralchem. Mazepin is also the Russian potash company’s co-Deputy Chairman (GM Dec. 4, 2020).