DJ PhosAgro Boosts Fertilizer Production to a Record 9.5 Million Tonnes in 2019
OJSC PhosAgro (PHOR)
PhosAgro Boosts Fertilizer Production to a Record 9.5 Million Tonnes in 2019
29-Jan-2020 / 12:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
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announcement.
For Immediate Release
PhosAgro Boosts Fertilizer Production to a Record 9.5 Million Tonnes in 2019
Moscow, Russia - 29 January 2020 - PhosAgro (MOEX/LSE ticker: PHOR), one of
the world's leading vertically integrated phosphate-based fertilizer
producers, announces that its 4Q 2019 fertilizer sales volumes increased by
16% year-on-year to 2.3 million tonnes.
Total fertilizer production in 4Q 2019 increased by 2.8% year-on-year to
2,358.9 kt. Fertilizer and feed phosphate output for FY 2019 grew by 6.1%
year-on-year to a record 9,521.8 kt.
Phosphate rock and nepheline concentrate production in 4Q 2019 rose by 3.2%
year-on-year to 2,897.0 kt. For FY 2019, the output of phosphate rock and
nepheline concentrate was up by 5.8% year-on-year and reached 11,694.7 kt.
Sales of phosphate-based fertilizers in 4Q 2019 grew by 16.6% year-on-year
to 1,738.4 kt. Sales of phosphate-based fertilizers for FY 2019 increased by
9.4% year-on-year and reached 7,255.0 kt.
Sales of nitrogen fertilizers in 4Q 2019 rose by 14.5% year-on-year and
amounted to 537.1 kt. Sales of nitrogen fertilizers for FY 2019 increased by
0.1% year-on-year and amounted to 2,197.3 kt.
Sales of phosphate rock and nepheline concentrate in 4Q 2019 grew by 4.6%
year-on-year and amounted to 1,152.9 kt. For FY 2019, sales of phosphate
rock and nepheline concentrate increased by 12.6% year-on-year and amounted
to 4,446.2 kt.
PhosAgro production and sales volumes
Production volume by category
(kt) 4Q 4Q 2018 Chg y/y FY 2019 FY 2018 Chg y/y
2019
Phosphate-based 1,780. 1,741.0 2.3% 7,271.3 6,852.0 6.1%
& MCP 3
Nitrogen-based 578.6 553.0 4.6% 2,250.5 2,123.0 6.0%
TOTAL 2,358. 2,294.0 2.8% 9,521.8 8,975.0 6.1%
fertilizers 9
Phosphate rock 2,897. 2,806.7 3.2% 11,694. 11,052. 5.8%
and nepheline 0 7 6
concentrate
Other products 44.6 52.3 -14.8% 177.5 204.0 -13.0%
Sales volumes by category
(kt) 4Q 4Q 2018 Chg y/y FY 2019 FY 2018 Chg y/y
2019
Phosphate-based 1,738. 1,491.5 16.6% 7,255.0 6,634.7 9.4%
& MCP 4
Nitrogen-based 537.1 469.2 14.5% 2,197.3 2,195.6 0.1%
TOTAL 2,275. 1,960.7 16.1% 9,452.4 8,830.2 7.1%
fertilizers 5
Phosphate rock 1,152. 1,102.1 4.6% 4,446.2 3,947.3 12.6%
and nepheline 9
concentrate
Other products 48.2 47.6 1.3% 185.6 182.3 1.8%
Commenting on the 4Q and FY 2019 operating results, PhosAgro CEO Andrey
Guryev said:
"The Company continued its steady development in 2019 by unlocking the
potential created during the previous investment cycle. Stable demand in our
primary sales markets during the year made it possible to increase
production volumes at our production facilities, and a balanced approach to
ordinary maintenance enabled us to mitigate seasonal fluctuations in sales
of our end product.
"As a result, fertilizer production surpassed 9.5 million tonnes in 2019,
which was fully in line with the Company's announced production guidance.
This is a record level for us.
"Fertilizer production grew together with higher production volumes of
feedstocks like phosphate rock, ammonia, sulphuric acid and phosphoric acid,
which enabled us to maintain our self-sufficiency in these key inputs and
guaranteed our cost advantage, thus increasing our global competitive
position.
"PhosAgro's flexible sales model enabled us to increase sales in 2019 to
priority sales markets. For example, sales to the Russian and CIS markets
grew by more than 10% year-on-year, exceeding 3 million tonnes, and sales to
the European market over the same period increased by 28% to more than 2.6
million tonnes. As a result of this growth, these markets accounted for more
than 32% and 28% of total sales volumes, respectively.
"Looking at fertilizer prices in late 2019 and early 2020, I would note that
the price correction we saw throughout 2019 led to a large part of global
producers reaching marginal profitability levels, which made the market more
rational. This has laid the foundation for price growth in anticipation of
seasonal recovery in demand."
Production volumes by type
Production volumes by category
(kt) 4Q 4Q 2018 Chg y/y FY FY 2018 Chg
2019 2019 y/y
Apatit mine and beneficiation plant
Phosphate 2,606. 2,552.7 2.1% 10,506 10,067.0 4.4%
rock 9 .6
Nepheline 290.1 254.0 14.2% 1,188. 985.7 20.5%
concentrat 1
e
TOTAL 2,897. 2,806.7 3.2% 11,694 11,052.6 5.8%
0 .7
Phosphate-based fertilizers
DAP/MAP 771.6 774.7 -0.4% 3,202. 2,995.0 6.9%
9
NPK 672.7 692.8 -2.9% 2,770. 2,799.0 -1.0%
4
NPS 155.3 120.7 28.6% 643.8 419.0 53.6%
APP 59.9 53.6 11.8% 193.4 216.0 -10.4%
MCP 99.3 92.4 7.5% 367.7 356.0 3.3%
PKS 21.5 6.8 216.1% 93.0 67.0 38.9%
TOTAL 1,780. 1,741.0 2.3% 7,271. 6,852.0 6.1%
fertilizer 3 3
s
Nitrogen-based fertilizers
AN 165.8 153.1 8.3% 566.4 533.0 6.3%
Urea 412.8 399.9 3.2% 1,684. 1,590.0 5.9%
1
TOTAL 578.6 553.0 4.6% 2,250. 2,123.0 6.0%
fertilizer 5
s
Other products
STPP 25.6 26.8 -4.5% 98.9 105.0 -5.8%
Other 19.0 25.5 -25.6% 78.5 99.0 -20.7%
TOTAL 44.6 52.3 -14.8% 177.5 204.0 -13.0%
other
products
Feedstocks
Ammonia 460.1 465.0 -1.0% 1,930. 1,866.0 3.4%
2
Phosphoric 663.9 622.6 6.6% 2,701. 2,546.0 6.1%
acid 4
Sulphuric 1,512. 1,444.4 4.7% 6,123, 5,732.0 6.8%
acid 2 0
TOTAL 2,176. 2,067.0 5.3% 8,824. 8,278.0 6.6%
feedstocks 2 4
In 4Q 2019, production in the phosphate and nitrogen segments increased by
2.3% and 4.6% year-on-year, respectively, due to an increase in productivity
following the completion of technical upgrades at the Company's production
facilities in Cherepovets and Balakovo at the end of the last year. This
growth was partially limited by the large volume of scheduled maintenance
conducted in 4Q 2019, which were moved to the end of the year amid
expectations of a seasonal slowdown in demand.
Sulphuric acid production increased by 4.7% year-on-year to 1,512.2 kt due
to upgrades to one of the production lines in Cherepovets in December 2018.
Sales volumes by type
Sales volumes by category
(kt) 4Q 2019 4Q 2018 Chg y/y FY 2019 FY 2018 Chg y/y
Apatit mine and beneficiation plant
Phosphate 857.9 845.0 1.5% 3,256.4 2,964.2 9.9%
rock
Nepheline 295.0 257.2 14.7% 1,189.8 983.1 21.0%
concentrat
e
TOTAL 1,152.9 1,102.1 4.6% 4,446.2 3,947.3 12.6%
Phosphate-based fertilizers
DAP/MAP 694.8 644.5 7.8% 3,204.6 2,912.6 10.0%
NPK 670.2 603.4 11.1% 2,775.7 2,664.4 4.2%
NPS 177.6 101.4 75.1% 616.0 423.5 45.4%
APP 64.9 54.5 19.1% 198.4 209.4 -5.3%
MCP 122.9 84.4 45.6% 377.4 347.2 8.7%
PKS 8.1 3.3 142.2% 82.9 77.6 6.9%
TOTAL 1,738.4 1,491.5 16.6% 7,255.0 6,634.7 9.4%
fertilizer
s
Nitrogen-based fertilizers
AN 115.0 136.2 -15.5% 506.4 595.3 -14.9%
Urea 422.0 333.0 26.7% 1,690.9 1,600.3 5.7%
TOTAL 537.1 469.2 14.5% 2,197.3 2,195.6 0.1%
fertilizer
s
Other products
STPP 25.9 23.0 12.2% 103.5 98.6 4.9%
Other 22.4 24.5 -8.9% 82.2 83.7 -1.8%
TOTAL 48.2 47.6 1.3% 185.6 182.3 1.8%
other
products
In 4Q 2019, PhosAgro's fertilizer sales rose by 16.1% year-on-year to
2,275.5 kt thanks to the favourable price ratio for agricultural products
and fertilizers. Another factor behind the substantial increase in sales was
the low base effect from 4Q 2018, when transport restrictions in Europe
prevented the complete sale of traders' stocks.
In 4Q 2019, sales of phosphate-based fertilizers grew by 16.6% year-on-year
to 1,738.4 kt, mainly driven by increased sales of NPK and NPS fertilizers,
which enjoyed more stable prices compared to DAP/MAP, and the premium for
nutrients increased. Thus, the share of NPK(S) grades in the phosphate
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January 29, 2020 04:00 ET (09:00 GMT)
segment increased to almost 49% (from 47% in 4Q 2018).
In addition, PhosAgro increased sales of MCP by 45.6% year-on-year to 122.9
kt thanks to successful efforts to promote this product in the US market.
Phosphate-based fertilizers were mainly delivered to Europe, India and Latin
America, where there was a more favourable pricing environment relative to
the North American market. Sales in our priority domestic market in 4Q 2019
increased by 15.0% year-on-year due to the earlier start of seasonal demand
and an effective distribution system that enables the Company to quickly
respond to market changes.
In 4Q 2019, sales of nitrogen-based fertilizers rose by 14.5% year-on-year
to 537.1 kt thanks to the start of seasonal demand for urea in world markets
alongside affordable prices.
Sales volumes by key markets
Sales volumes by region
Phosphate-based fertilizers
(Kt) 4Q 2019 4Q 2018 Chg y/y FY 2019 FY 2018 Chg y/y
Russia 268.1 233.2 15.0% 2,194.7 1,927.6 13.9%
North 165.9 303.5 -45.3% 592.4 849.0 -30.2%
America
Latin 409.6 356.6 14.9% 1,033.8 1,150.0 -10.1%
America
Europe 580.2 455.2 27.4% 2,098.7 1,631.7 28.6%
CIS 53.9 65.5 -17.7% 367.5 316.7 16.1%
Other 260.7 77.5 236.5% 967.8 759.7 27.4%
Nitrogen-based fertilizers
(Kt) 4Q 2019 4Q 2018 Chg y/y FY 2019 FY 2018 Chg y/y
Russia 121.1 105.9 14.4% 492.4 503.8 -2.3%
North 89.2 56.8 57.0% 289.5 263.3 10.0%
America
Latin 163.1 173.6 -6.1% 710.5 856.6 -17.1%
America
Europe 122.9 84.2 45.9% 535.3 418.3 28.0%
CIS 0.0 0.0 0.0% 13.4 13.6 -1.4%
Other 40.8 48.6 -16.1% 156.3 139.9 11.7%
Main market factors
The prices of the main phosphate-based fertilizers continued to decrease in
4Q 2019 due to the end of seasonal demand in the key markets of Asia (India)
and Latin America (Brazil, Argentina), along with weak demand coming from
the United States and Western Europe.
At the end of December 2019, the world's leading producers in Morocco, the
United States and China announced plans to reduce production in order to
stabilise prices in global markets.
In addition, seasonal demand in the markets of Europe and North America is
expected to grow in 1Q 2020, and favourable weather conditions in India will
help reduce inventories and, as a consequence, lead to earlier resumption of
import demand.
The affordability of fertilizers relative to prices for agricultural
products will remain the main driver behind the restoration of global prices
for phosphate-based fertilizers in the short term.
All of the above factors have already started supporting demand for
fertilizers in January 2020 and have led to a recovery in prices for the
main product groups.
Contacts
PJSC PhosAgro
Andrey Serov, Head of Investor Relations Department
+7 495 232 9689 ext 2187
ir@phosagro.ru
Timur Belov, Press Officer
+7 495 232 9689
EM
Sam VanDerlip
vanderlip@em-comms.com
+44 207 002 7859
Dmitry Zhadan
zhadan@em-comms.com
+7 916 770-89-09
About the Company
PhosAgro (www.phosagro.com [1]) 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. PhosAgro's environmentally friendly
fertilizers stand out for their high efficiency, and they do not lead to the
contamination of soils with heavy metals.
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% and one of the leading
producers 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.com [1].
ISIN: US71922G2093
Category Code: TST
TIDM: PHOR
LEI Code: 635400F8A3KGJIIBIK95
OAM Categories: 2.2. Inside information
Sequence No.: 43311
EQS News ID: 963183
End of Announcement EQS News Service
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January 29, 2020 04:00 ET (09:00 GMT)
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