OJSC PhosAgro (PHOR)
PhosAgro Board of Directors Recognises Effectiveness of Andrey
Guryev's Work as CEO and Recommends that Shareholders Approve Dividend
Payment
28-Aug-2019 / 09:33 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
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announcement.
For Immediate Release 27 August 2019
PhosAgro Board of Directors Recognises Effectiveness of Andrey
Guryev's Work as CEO and Recommends that Shareholders Approve Dividend
Payment
Moscow - The Board of Directors of PhosAgro, one of the world's leading
producers of phosphate-based fertilizers, heard a report by Andrey Guryev on
the results of his work as CEO of the Company over the past six years and
about the Company's medium-term plans. Members of the Board of Directors
noted the Company's significant progress in all major areas of activity.
Summing up his six years as the CEO of PhosAgro, Andrey Guryev noted that:
? PhosAgro's production volumes have grown more than 1.6 times, from 5.9
million in 2013 to 9.4-9.5 million tonnes expected in 2019;
? The EBITDA margin increased from 23% in 2013 to 32% in 2018, and the
Company consistently generates profit and high profitability levels;
? PhosAgro's EBITDA over the same period increased from RUB 23.9 billion
in 2013 to RUB 74.9 billion last year;
? An even more significant result is the more than 300% increase in
dividends paid compared to the 2013 level.
Andrey Guryev also emphasised progress in its social and environmental
performance:
? The Company invests over RUB 2.5 billion every year into social
programmes. In 2018 PhosAgro spent over RUB 8 billion on environmental
protection projects and currently operates some of the most advanced
purification equipment in the industry;
? PhosAgro's new strategy to 2025 prioritises sustainable development and
adherence to high standards in the social sphere, environmental
performance, corporate governance;
? The Company created the Sustainability Committee of the Board of
Directors, which just held its first meeting. Former UNESCO
Director-General Irina Bokova chairs the Committee;
? PhosAgro's annual report for 2018 was prepared in accordance with GRI
4.0 standards and received external verification by the Company's
auditors.
During his report, PhosAgro CEO Andrey Guryev said: "PhosAgro has
consistently delivered solid operational and financial results thanks to the
well-coordinated work of the entire team, including the miners of Kirovsk,
chemists in Cherepovets, Balakovo and Volkhov, and management. Thanks to
active work on the international stage, we are successfully seeking to
strengthen our reputation, increase brand recognition, and succeed in
promoting our products globally. As a result of all these efforts, we
receive both external recognition and, even more importantly, the
recognition and loyalty of our team.
"The unique corporate standards for fertilizer purity, which exceed even the
most stringent international requirements by a large margin, help to
guarantee growing demand for PhosAgro fertilizers for many years into the
future. This enables us to set and achieve ambitious goals, implement
large-scale investment programmes and long-term development strategies,
generate stable cash flows, pay balanced dividends and implement new
investment, social and charitable projects, without increasing our debt
levels."
In 2019, PhosAgro production volumes continue to grow, with mineral
fertilizer and feed phosphate output up by 3.4% year-on-year in the 1H 2019.
This was achieved thanks to the implementation of investment projects, the
most significant of which is the programme for increasing the capacities of
the phosphates complex in Cherepovets (the main facilities were put into
operation at the end of 2018), as well as business process optimisation at
all production sites aimed at removing bottlenecks, improving production
discipline and operational efficiency.
PhosAgro's production Kirovsk site has achieved an impressive 160% increase
in labour productivity since 2013, while other production facilities
achieved a 170% rise. Company-wide, labour productivity is growing at a pace
of around 27% annually.
This year, the Company plans to commission a new sulphuric acid line with a
capacity of 1.2 million tonnes per year and an ammonium sulphate production
plant with a capacity of 300 ths tonnes per year at its Cherepovets site,
which will make PhosAgro nearly fully self-sufficient in these key inputs.
In addition, a new nitric acid line, which will enable PhosAgro to increase
ammonium nitrate production by over 170 ths tonnes per year and take
advantage of consistently high demand for this product in the domestic
market.
Xavier Rolet, Chairman of the Board of Directors of PhosAgro, said: "I have
known Andrey Guryev and PhosAgro since before I joined the Board of
Directors. Andrey's appointment as CEO marked the start of an impressive
period of growth and development during which the Company invested over 50%
of its EBITDA into major strategic projects, continued to refine its
governance practices and adopted changes to its dividend policy to make
PhosAgro even more attractive to global investors.
"Central to its strategy is the sustainability and environmentally-friendly
nature of its production, underpinned by its unique line of cadmium-free
phosphate-based products. The Company's major commitment to employee safety,
welfare and education is also well known and has made it a global leader in
its industry.
"Under Andrey's leadership, PhosAgro has also put in place an impressive
programme of active cooperation with numerous international organisations to
further support the cause of environmentally-friendly fertilizer production,
technological innovation and education to sustainably feed a world
population estimated by the UN to reach 10.5 billion by the end of this
century.
"I am pleased to express the Board's continued confidence and total support
for Andrey and his world-class management team as the Company takes its
rightful place as the undisputed global industry leader in the years to
come."
"PhosAgro's commitment to the principles of sustainable development and the
UN Global Compact represent the ambitions of a truly global company and we
take this work very seriously. PhosAgro contributes to the achievement of 10
of the 17 Sustainable Development Goals of the UN, but PhosAgro's main
contribution to global sustainable development is to help ensure food
security in more than 100 countries of the world where the Company's
products are used. PhosAgro fertilizers do not contain toxic impurities,
meaning they are safe for human health and they do not harm the soil. This
is especially important, since 52% of the Earth's soil resources are already
subject to degradation. Given the growing global concern over the purity of
fertilizers, the importance of PhosAgro's contribution to sustainable
development will only increase," said Irina Bokova, Chair of the Committee
for Sustainable Development of the PhosAgro Board of Directors.
Taking into account PhosAgro's stable cash flows and positive financial
performance dynamics, the Company's management presented options for a new
dividend policy. The Board of Directors decided to further analyse with the
intention of giving final approval at a meeting on 24 September 2019,
immediately before PhosAgro's Capital Markets Day, where the Company's
strategy to 2025 will be presented.
The Board of Directors also recommended that the Extraordinary General
Meeting of Shareholders ("EGM") approve a dividend payment of RUB 6.993
billion, or RUB 54 per ordinary share (RUB 18 per Global Depositary Receipt)
from retained earnings as of 31 December 2018. This recommendation was made
based on the results of the Board's discussion of the Company's financial
results for 1H 2019, including the interim consolidated IFRS financial
statements, which are scheduled to be disclosed tomorrow, 28 August 2019.
The EGM will be held by absentee ballot on 4 October 2019 and the record
date for shareholders eligible to participate has been set as 9 September
2019. The Board has recommended that the shareholders meeting set 15 October
2019 as the record date for dividends.
The Board of Directors also confirmed that its Independent Directors meet
the criteria of independence, as defined by PhosAgro's bylaws for the Board
of Directors, the Corporate Governance Code recommended by the Central Bank
of Russia for joint stock companies and the Moscow Exchange listing Rules.
The Board also set the payment for RAS audit services and considered or
reviewed other issues on the agenda.
For further information please contact:
PhosAgro
Andrey Serov, Head of Investor Relations Department
+7 495 232 9689 ext 2183
ir@phosagro.ru
Timur Belov, Press Officer
+7 495 232 9689
EM
Sam VanDerlip
vanderlip@em-comms.com
+44 7554 993 032
+7 499 918 3134
Dmitriy Zhadan
zhadan@em-comms.com
+7 495 363 2849
+7 916 770 89 09
About the Company
PhosAgro is one of the world's leading vertically integrated phosphate-based
fertilizer producers in terms of production volumes of phosphate-based
fertilizers and high-grade phosphate rock with a P2O5 content of 39% and
higher.
The Company is the largest phosphate-based fertilizer producer in Europe (by
total combined capacity for DAP/MAP/NP/NPK/NPS), the largest producer of
high-grade phosphate rock with a P2O5 content of 39%, a top-three producer
of MAP/DAP globally, one of the leading producers of feed phosphates (MCP)
in Europe, and the only producer in Russia, and Russia's only producer of
nepheline concentrate (according to the RAFP).
PhosAgro's main products include phosphate rock, 39 grades of fertilizers,
feed phosphates, ammonia, and sodium tripolyphosphate, which are used by
customers in 100 countries spanning all of the world's inhabited continents.
The Company's priority markets outside of Russia and the CIS are Latin
America, Europe and Asia.
PhosAgro's shares are traded on the Moscow Exchange, and Global Depositary
Receipts (GDRs) for shares trade on the London Stock Exchange (under the
ticker PHOR). Since 1 June 2016, the Company's GDRs have been included in
the MSCI Russia and MSCI Emerging Markets indexes.
More information about PhosAgro can be found on the website: www.phosagro.ru
[1].
ISIN: US71922G2093
Category Code: DIV
TIDM: PHOR
LEI Code: 635400F8A3KGJIIBIK95
Sequence No.: 18237
EQS News ID: 864375
End of Announcement EQS News Service
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August 28, 2019 03:33 ET (07:33 GMT)
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