PhosAgro Reports Operating and Financial Results for FY 2023
Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, today announces its consolidated financial results for the 12 months (FY) ended 31 December 2023.
FY 2023 highlights
In FY 2023, production of mineral fertilizers and feed phosphates increased by 2.1% year-on-year to 11 million tonnes, while the production of other agrochemicals amounted to about 0.3 million tonnes.
This growth was driven by an 8.4% increase in DAP/MAP production to more than 4.5 million tonnes, a 4.4% increase in ammonium nitrate production to 723 thousand tonnes and a 1.6% increase in urea production to 1.7 million tonnes.
Total fertilizer sales in FY 2023 rose 2.0% year-on-year to around 11.4 million tonnes.
Among the factors driving increased sales were the Company's flexible sales policy and the affordability of fertilizers, which boosted sales considerably not only in the priority domestic market but also in key export markets. Relatively low inventories were also noted in key markets.
Revenue for FY 2023 amounted to RUB 440.3 billion (USD 5.23 billion), down 22.7% year-on-year amid a correction in fertilizer prices in global markets in 2023, following record highs in 2022.
The Company's EBITDA was RUB 183.0 billion (USD 2.19 billion) in FY 2023, down 29% year-on-year. The high EBITDA margin of 41.6% was driven by effective cost management and increased sales of high-margin products.
In FY 2023, the Company's free cash flow amounted to RUB 70.2 billion (USD 0.91 billion). The decrease in free cash flow from the previous year was due to the record-high figure for FY 2022 and a change in the regional sales mix. Nevertheless, FY 2023 was one of the Company's best years for free cash flow in the last decade.
Net debt as of 31 December 2023 amounted to RUB 223.2 billion (USD 2.49 billion), and the net debt/EBITDA ratio at the end of the year was a comfortable 1.2x.
Financial and operating highlights:
Financial highlights | |||
RUB mln | FY 2023 | FY 2022 | Change, % |
Revenue | 440,304 | 569,527 | -22.7% |
EBITDA* | 183,038 | 257,879 | -29.0% |
EBITDA margin | 41.6% | 45.3% | |
Net profit | 86,141 | 184,714 | -53.4% |
Adj. net profit** | 104,105 | 182,297 | -42.9% |
Free cash flow | 70,208 | 104,295 | -32.7% |
31.12.2023 | 31.12.2022 | ||
Net debt | 223,207 | 180,338 | |
ND/LTM EBITDA | 1.2x | 0.7x |
Operating highlights | |||
Production volumes by category | |||
kt | FY 2023 | FY 2022 | Change, % |
Phosphate-based fertilizers and feed phosphates | 8,388.7 | 8,224.4 | 2.0% |
Nitrogen-based fertilizers | 2,605.3 | 2,546.6 | 2.3% |
Other products | 286.0 | 301.9 | -5.3% |
TOTAL agrochemicals | 11,280.0 | 11,072.9 | 1.9% |
Sales volumes by category | |||
kt | FY 2023 | FY 2022 | Change, % |
Phosphate-based fertilizers and feed phosphates | 8,578.2 | 8,402.8 | 2.1% |
Nitrogen-based fertilizers | 2,560.5 | 2,550.8 | 0.4% |
Other products | 214.8 | 179.5 | 19.7% |
TOTAL agrochemicals | 11,353.5 | 11,133.1 | 2.0% |
RUB/USD exchange rates: average for FY 2023: 85.2466; average for FY 2022: 68.5494; as of 31 December 2023: 89.6883; as of 31 December 2022: 70.3375.
* EBITDA is calculated as operating profit adjusted for depreciation and amortisation.
** Adj. net profit is net profit as reported minus FX gain or loss.
The Company's revenue and EBITDA for FY 2023 decreased to the level of the previous year due to the stabilisation of global fertilizer prices after reaching all-time highs in 2022.
At the same time, the EBITDA margin remained above 40% as of the end of the year. This high level of profitability was driven by increased production of high-margin fertilizers and basic feedstocks as well as the Company's flexible sales policy.
Thanks to a year-on-year increase of over 50% in sales to countries in Latin America, the Company was able to take full advantage of the favourable pricing environment at a time when fertilizers were becoming more affordable, and traders were short of inventories.
The Company enjoyed a high level of free cash flow (FCF) of over RUB 70 billion in FY 2023. This excellent result was possible despite the Company's negative FCF in 4Q 2023, which was impacted by an additional drain on liquidity from the payment of export duties, a payment at the end of the year for excess profit tax in the amount of RUB 6.4 billion and high capital expenditures, which are typically made in the last quarter of the year.
In light of the above-mentioned drain on liquidity and in accordance with PhosAgro's dividend policy, a decision was taken not to include the issue of profit distribution for 2023 on the agenda for the Board of Directors meeting where the Company's annual financial statements are to be discussed. This issue is expected to be included on the agenda for the Board of Directors meeting that will discuss the Company's 1Q 2024 performance.
Thanks to its strong financial position, capital investments within budget and high free cash flow, the Company was able to service all its debt obligations on time and in full, including those denominated in a foreign currency. As of the end of FY 2023, the Company's debt load remained at a comfortable level. As of 31 December 2023, net debt amounted to RUB 223.2 billion, and the net debt/EBITDA ratio was 1.2x. The substantial increase in RUB-denominated debt was driven to a large extent by the weakening of the rouble against the US dollar throughout 2023 and the revaluation of the Company's FX-denominated debt at new rates at the end of the year.
At the same time, it should be noted that the percentage of USD-denominated in debt in the Company's loan portfolio is decreasing thanks in part to the replacement of redeemed PHOR-23 Eurobonds with RUB- and RMB-denominated exchange-traded bonds and RMB-denominated bank loans.
A number of important events affirmed the Company's high credit quality, including the issuance of RUB 20 billion and RMB 2 billion in exchange-traded bonds, as well as the replacement of two remaining issues of Eurobonds, PHOR-25 and PHOR-28. As a result of this process, more than 74% of the two Eurobond issues worth USD 740.4 million was replaced.
The successful public debt offering in the Russian market and the replacement of Eurobonds once again affirmed the Company's high credit quality and its full compliance with its credit ratings from ACRA (AAA (RU)) and Expert RA (ruAAA) at the country ceiling level.
Fertilizer market in 4Q 2023
The global fertilizer market in 4Q 2023 was marked by mixed price trends: prices for nitrogen-based and potash fertilizers declined under pressure from excess supply, while prices for phosphate-based fertilizers remained stable as a result of the overall market balance.
Restrictions on exports from China, in favour of supplying the domestic market, also supported prices for phosphate-based fertilizers. In addition, demand in Asian and Latin American markets remained stable. The average price for MAP in 4Q 2023 was USD 511 per tonne (FOB Baltic).
Prices for nitrogen-based fertilizers gradually declined due to weaker demand in India following the launch of new domestic capacities in 2022-2023 (resulting in decreased dependence on imports). Demand in Latin America (Brazil) decreased in response to weaker agricultural markets and the impact of inclement weather. The average price of urea in 4Q 2023 was USD 319 per tonne (FOB Baltic).
Prices for potash fertilizers decreased due to excess supply in the market. The average price for standard potassium chloride in 4Q 2023 was USD 236 per tonne (FOB Baltic).
Trends in early 2024
The development of seasonal demand in key Western markets - in Europe, North America and Central America - is the main factor affecting the global mineral fertilizer market. The announcement of a major tender for the purchase of urea in India combined with the earlier development of seasonal demand in South-East Asian markets drove up prices for nitrogen-based fertilizers early in the quarter. Continuing restrictions on fertilizer exports from China are helping stabilise markets for phosphate-based fertilizers - at existing levels - above USD 500 per tonne (FOB Baltic) for DAP/MAP.
For further information, please contact:
PJSC PhosAgro
Andrey Serov, Head of the Investor Relations Department
+7 495 231 2747 ext. 2183
ir@phosagro.ru
Timur Belov, Press Officer
+7 495 231 2747 ext. 2652
pr@phosagro.ru
About Us
PhosAgro (www.phosagro.com) is a vertically integrated Russian company and one of the world's leading producers of phosphate-based fertilizers and high-grade phosphate rock with P2O5 content of 39% or higher. PhosAgro's high-performance fertilizers produce crops with advanced features.
PhosAgro Group is the largest producer of phosphate-based fertilizers in Europe (by total combined capacity for the production of DAP, MAP, NP, NPK and NPS fertilizers), the largest producer of high-grade phosphate rock with P2O5 content of 39%, one of the leading producers of MAP and DAP fertilizers globally, one of the leading producers of monocalcium feed phosphates (MCP) in Europe - and the only such producer in Russia - and Russia's only producer of nepheline concentrate.
PhosAgro's main products, including phosphate rock, 58 grades of fertilizers, feed phosphates, ammonia and sodium tripolyphosphate, are used by customers in 100 countries spanning all the world's inhabited continents. The Company's priority markets beyond Russia and the CIS are Latin America, Europe and Asia.
The Company's shares are listed on the Moscow Exchange and its global depositary receipts (GDRs) are listed on the London Stock Exchange (MOEX and LSE ticker: PHOR).
More information about PhosAgro can be found on our website:https://www.phosagro.com/
Консолидированный промежуточный сокращенный отчет о движении денежных средств за девять месяцев, закончившихся 31 декабря 2022 года
RUB million | 2023 | 2022 | |
Revenues | 440,304 | 569,527 | |
Cost of Group products sold | (235,560) | (253,419) | |
Cost of products for resale | (16,056) | (15,599) | |
Gross profit | 188,688 | 300,509 | |
Administrative and selling expenses | (32,282) | (42,403) | |
Taxes, other than income tax | (12,779) | (11,327) | |
Other expenses, net | (7,557) | (9,371) | |
Foreign exchange gain/(loss) from operating activities, net | 14,686 | (9,068) | |
Operating profit | 150,756 | 228,340 | |
Finance income | 3,353 | 4,439 | |
Finance costs | (7,881) | (11,967) | |
Gain from revaluation of investments in equity instruments measured at fair value through profit or loss | 1,025 | - | |
Foreign exchange (loss)/gain from financing activities, net | (32,650) | 11,485 | |
Profit before tax | 114,603 | 232,297 | |
Income tax expense | (28,462) | (47,583) | |
Profit for the year | 86,141 | 184,714 | |
Attributable to: | |||
Shareholders of the Company | 86,084 | 184,662 | |
Non-controlling interests* | 57 | 52 | |
Basic and diluted earnings per share (in RUB) | 665 | 1,426 | |
Other comprehensive loss | |||
Items that will never be reclassified to profit or loss | |||
Actuarial losses | (35) | (276) | |
Items that may be reclassified subsequently to profit or loss | |||
Foreign currency translation difference | - | (2,929) | |
Foreign currency translation difference reclassified to profit or loss upon loss of control over foreign subsidiaries | - | (6,302) | |
Actuarial losses reclassified to profit or loss upon loss of control over foreign subsidiaries | - | 61 | |
Other comprehensive loss for the year | (35) | (9,446) | |
Total comprehensive income for the year | 86,106 | 175,268 | |
Attributable to: | |||
Shareholders of the Company | 86,049 | 175,216 | |
Non-controlling interests* | 57 | 52 | |
*Non-controlling interests are the minority shareholders of the subsidiaries of PJSC "PhosAgro"
PJSC "PhosAgro"
Consolidated Statement of Profit or Loss and Other Comprehensive Income for 2023
RUB million | 31 December 2023 | 31 December 2022 | |
Assets | |||
Property, plant and equipment | 308,663 | 274,522 | |
Advances issued for property, plant and equipment | 10,337 | 9,270 | |
Deferred tax assets | 9,751 | 7,903 | |
Other non-current assets | 8,262 | 8,546 | |
Non-current spare parts | 8,059 | 5,125 | |
Right-of-use assets | 7,240 | 4,277 | |
Intangible assets | 2,773 | 2,099 | |
Catalysts | 2,667 | 1,965 | |
Investments in associates and joint ventures | 636 | 592 | |
Non-current assets | 358,388 | 314,299 | |
Trade and other receivables | 66,362 | 75,741 | |
Inventories | 48,468 | 39,349 | |
Cash and cash equivalents | 29,163 | 13,356 | |
VAT and other taxes receivable | 10,119 | 12,565 | |
Security payment for windfall tax | 6,355 | - | |
Other financial assets | 5,083 | 210 | |
Income tax receivable | 1,703 | 93 | |
Current assets | 167,253 | 141,314 | |
Total assets | 525,641 | 455,613 | |
Equity | |||
Share capital | 372 | 372 | |
Share premium | 7,494 | 7,494 | |
Retained earnings | 144,658 | 190,664 | |
Actuarial losses | (1,003) | (968) | |
Equity attributable to shareholders of the Company | 151,521 | 197,562 | |
Equity attributable to non-controlling interests | 84 | 158 | |
Total equity | 151,605 | 197,720 | |
Liabilities | |||
Loans and borrowings | 161,710 | 109,784 | |
Deferred tax liabilities | 13,603 | 17,820 | |
Lease liabilities | 2,818 | 1,660 | |
Defined benefit obligations | 1,129 | 1,050 | |
Non-current liabilities | 179,260 | 130,314 | |
Loans and borrowings | 86,429 | 80,974 | |
Dividends payable | 54,919 | 82 | |
Trade and other payables | 42,653 | 39,412 | |
Windfall tax payable | 6,355 | - | |
VAT and other taxes payable | 2,799 | 5,632 | |
Lease liabilities | 1,413 | 1,276 | |
Income tax payable | 208 | 203 | |
Current liabilities | 194,776 | 127,579 | |
Total equity and liabilities | 525,641 | 455,613 | |
PJSC "PhosAgro"
Consolidated Statement of Financial Position as at 31 December 2023
RUB million | 2023 | 2022 | |
Cash flows from operating activities | |||
Operating profit | 150,756 | 228,340 | |
Adjustments for: | |||
Depreciation and amortisation | 32,282 | 29,539 | |
Loss on disposal of property, plant and equipment and intangible assets | 365 | 429 | |
Operating profit before changes in working capital | 183,403 | 258,308 | |
Decrease in trade and other receivables1 | 6,063 | 7,498 | |
Increase in inventories, catalysts and non-current spare parts | (11,624) | (12,308) | |
Decrease in trade and other payables1 | (46) | (3,131) | |
Cash flows from operations before income tax and interest paid | 177,796 | 250,367 | |
Income tax paid | (29,777) | (41,811) | |
Finance costs paid | (7,378) | (5,275) | |
Windfall tax security payment | (6,355) | - | |
Cash flows from operating activities | 134,286 | 203,281 | |
Cash flows from investing activities | |||
Finance income | 2,000 | 3,783 | |
Acquisition of property, plant and equipment and intangible assets | (64,232) | (63,021) | |
Borrowing cost capitalised paid | (1,896) | (976) | |
Advances issued for right-of-use assets | (94) | (850) | |
Cash and cash equivalents disposed as a result of loss of control over foreign subsidiaries | - | (36,729) | |
Loans issued | - | (3,130) | |
Proceeds from disposal of financial assets measured at fair value through profit or loss | - | 1,778 | |
Other | 144 | 159 | |
Cash flows used in investing activities | (64,078) | (98,986) | |
Cash flows from financing activities | |||
Proceeds from borrowings, net of transaction costs | 172,906 | 57,171 | |
Repayment of borrowings | (155,306) | (23,926) | |
Refund of dividends paid2 | 17,256 | 9 | |
Dividends paid to shareholders of the Company | (94,509) | (142,120) | |
Lease payments | (1,416) | (1,429) | |
Dividends paid to non-controlling interests | (131) | - | |
Cash flows used in financing activities | (61,200) | (110,295) | |
Net increase/(decrease) in cash and cash equivalents | 9,008 | (6,000) | |
Cash and cash equivalents at 1 January | 13,356 | 21,710 | |
Effect of exchange rates fluctuations | 6,799 | (2,354) | |
Cash and cash equivalents at 31 December | 29,163 | 13,356 | |
1 Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activities.
2 TheGroupreceived cash refund fromdepositoriespaidasdividendstopartieswhowereentitledtoreceivethem,butdidn't receive dividends due to reasons beyond the depositories'control.
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OAO PhosAgro published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 16:52:07 UTC.