OJSC PhosAgro (PHOR)
2Q and 1H 2020 Operating Results: PhosAgro Breaks 5 mln Tonne Record for
Fertilizer Production in Half Year, Increasing Production by Nearly 7%
22-Jul-2020 / 14:00 MSK
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For Immediate Release 22 July 2020
2Q and 1H 2020 Operating Results: PhosAgro Breaks 5 mln Tonne Record for
Fertilizer Production in Half Year, Increasing Production by Nearly 7%
Moscow - PhosAgro (the "Company", the "Group", MOEX, LSE: PHOR), one of the
world's leading vertically-integrated phosphate-based fertilizer producers,
reports that fertilizer sales increased by 10% year-on-year to 5.2 million
tonnes in 1H 2020.
2Q and 1H 2020 highlights
In 1H 2020, production of phosphate rock and nepheline concentrate increased
by 1.2% year-on-year to 5.9 million tonnes. In 2Q 2020, production increased
by 1.6% year-on-year to 2,976.4 thousand tonnes.
In 1H 2020, fertilizer production increased by almost 7% year-on-year to 5.0
million tonnes. This growth was the result of upgrades to production
capacities and efficiency gains achieved during the previous year. Total
fertilizer production in 2Q 2020 amounted to 2,458.6 thousand tonnes, an
increase of 4.3% year-on-year.
Fertilizer sales in 1H 2020 increased by more than 10% year-on-year to 5.2
million tonnes due to positive performance in the Company's priority sales
markets. In 2Q 2020 fertilizer sales amounted to 2,392.9 thousand tonnes, an
increase of 10.8% year-on-year.
Domestic fertilizer sales accounted for 30% of the total in 1H 2020, the
same as a year earlier.
PhosAgro production and sales volumes
Production volumes by category
(kt) 1H 1H 2019 Chg 2Q 2020 2Q 2019 Chg
2020
Phosphate-based 3,807. 3,559.8 7.0% 1,869.6 1,782.2 4.9%
& MCP 5
Nitrogen-based 1,206. 1,141.8 5.7% 589.0 574.2 2.6%
fertilizers 4
TOTAL 5,013. 4,701.6 6.6% 2,458.6 2,356.4 4.3%
fertilizers 9
Phosphate rock 5,931. 5,858.7 1.2% 2,976.4 2,930.5 1.6%
and nepheline 3
concentrate
Other products 101.6 86.9 16.9% 51.5 39.9 29.1%
Sales volumes by category
(kt) 1H 1H 2019 Chg 2Q 2020 2Q 2019 Chg
2020
Phosphate-based 3,876. 3,557.8 9.0% 1,789.4 1,628.8 9.9%
& MCP 7
Nitrogen-based 1,306. 1,148.3 13.8% 603.5 530.9 13.7%
fertilizers 3
TOTAL 5,183. 4,706.1 10.1% 2,392.9 2,159.7 10.8%
fertilizers 0
Phosphate rock 2,159. 2,263.7 -4.6% 1,084.0 1,142.0 -5.1%
and nepheline 7
concentrate
Other products 90.7 89.7 1.1% 39.1 40.5 -3.5%
PhosAgro CEO Andrey Guryev said:
"Given the ongoing epidemic risks, ensuring the safety of PhosAgro's
workforce remains the Company's priority. Our enterprises continue to
implement the comprehensive measures introduced when we saw the first signs
of the impending pandemic. The issue of the safety of the Company's
employees is inseparable from ensuring the health, including protection
against the virus, of all of the residents of the cities where we operate.
Due to the pandemic, we have bolstered our traditional support for local
hospitals and clinics by purchasing needed equipment, including personal
protective equipment.
"Separately, I am proud to note a 40% year-on-year decrease in LTIFR in the
first half of 2020 to 0.54 (compared to 0.9 for the first six months of
2019). We did not have any fatal accidents during this period.
"This positive development was the result of a comprehensive programme to
transform PhosAgro's safety culture in an effort to prevent accidents and
injuries. Every incident and potentially dangerous situation is
investigated, and preventive measures are taken to prevent similar incidents
from occurring in the future.
"Looking at the Company's operating results for the first half of 2020, I
would like to note that at a time when the world has been facing a
challenging situation with the COVID-19 pandemic, we were able to increase
fertilizer production by nearly 7% year-on-year, while sales of finished
products grew by 10% to 5.2 million tonnes.
"I would also highlight the 12% increase in sales of phosphate-based
fertilizers to Russian farmers. This is a very important indicator for us:
we consider the Russian market a priority, and we aim to further strengthen
our positions in Russia as part of our long-term development strategy.
"In terms of global fertilizer markets, prices in the second quarter
remained stable, with an upward trend, despite the end of seasonal demand in
Europe, the United States and Russia. At the same time, we saw higher demand
in the markets of India and Latin America."
Production volumes by type
Production volumes by category
(kt) 1H 2020 1H 2019 Chg 2Q 2020 2Q 2019 Chg
Phosphate 5,354.2 5,258.4 1.8% 2,684.6 2,621.0 2.4%
rock
Nepheline 577.1 600.3 -3.9% 291.8 309.5 -5.7%
concentrat
e
TOTAL 5,931.3 5,858.7 1.2% 2,976.4 2,930.5 1.6%
Phosphate-based fertilizers
DAP/MAP 1,617.1 1,611.9 0.3% 770.8 799.0 -3.5%
NPK 1,386.6 1,301.4 6.5% 693.2 701.6 -1.2%
NPS 444.0 311.4 42.6% 235.0 113.1 107.8%
APP 116.7 85.6 36.3% 58.0 36.0 61.1%
MCP 202.2 185.9 8.8% 101.9 89.4 14.0%
PKS 40.9 63.6 -35.7% 10.7 43.1 -75.2%
TOTAL 3,807.5 3,559.8 7.0% 1,869.6 1,782.2 4.9%
Nitrogen-based fertilizers
AN 362.8 283.8 27.8% 180.9 138.5 30.6%
Urea 843.6 858.0 -1.7% 408.1 435.7 -6.3%
TOTAL 1,206.4 1,141.8 5.7% 589.0 574.2 2.6%
TOTAL 5,013.9 4,701.6 6.6% 2,458.6 2,356.4 4.3%
fertilizer
s
Other products
STPP 47.6 52.1 -8.6% 21.7 25.9 -16.2%
Other 54.0 34.8 55.0% 29.8 14.0 112.9%
TOTAL 101.6 86.9 16.9% 51.5 39.9 29.1%
other
products
Feedstocks
Ammonia 1,012.6 985.6 2.7% 505.0 494.0 2.2%
Phosphoric 1,380.6 1,349.2 2.3% 684.8 675.3 1.4%
acid
Sulphuric 3,393.9 3,020.3 12.4% 1,714.0 1,521.9 12.6%
acid
Ammonium 143.1 0.0 n/a 75.9 0.0 n/a
sulphate
TOTAL 5,930.2 5,355.1 10.7% 2,979.7 2,691.2 10.7%
feedstocks
In 1H 2020, production in the phosphate segment grew 7.0% year-on-year due
to higher productivity of existing production lines for phosphoric acid and
phosphate-based fertilizers. This was made possible through improvements to
the technology used to produce phosphoric acid and the completion of
upgrades to fertilizer production lines at the end of last year. In 2Q 2020,
fertilizer production increased 4.9% year-on-year.
In the nitrogen segment, production in 1H 2020 increased by 5.7%
year-on-year due to a 27.8% increase in the production of ammonium nitrate
to 362.8 thousand tonnes. This was made possible thanks to the launch of a
new production line for nitric acid, which is the main feedstock in the
production of ammonium nitrate, and maintenance on the existing line, which
increased hourly productivity.
In 1H 2020, sulphuric acid production increased by 12.4% year-on-year to 3.4
million tonnes due to the launch of test production runs at the new
sulphuric acid production line in Cherepovets in the middle of 1Q 2020. This
also had an impact on year-on-year production growth in 2Q 2020. With a
nameplate capacity of up to 1,100 kt per year, the new line should increase
the Company's self-sufficiency in this feedstock.
As part of the Strategy-2025, PhosAgro ramped up its production line for
synthetic ammonium sulphate in Cherepovets to full capacity (up to 300 kt
per year), which will enable the enterprise to reduce its external purchases
of ammonium sulphate by more than 50%. Synthetic ammonium sulphate is used
as a feedstock for the production of sulphur-containing NPK(S) grades of
fertilizers, and it reduces their production cost compared with purchased
ammonium sulphate.
Sales volumes by type
Sales volumes by category
(kt) 1H 2020 1H 2019 Chg 2Q 2020 2Q 2019 Chg
Phosphate 1,581.6 1,657.1 -4.6% 790.6 831.4 -4.9%
rock
Nepheline 578.1 6066 -4.7% 2934 310.6 -5.5%
concentrat
e
TOTAL 2,159.7 2,263.7 -4.6% 1,084.0 1,142.0 -5.1%
Phosphate-based fertilizers
DAP/MAP 1,745.6 1,602.5 8.9% 820.7 658.2 24.7%
NPK 1,357.3 1,337.1 1.5% 575.7 681.2 -15.5%
NPS 419.7 286.5 46.5% 220.3 117.0 88.3%
APP 109.8 101.2 8.5% 46.7 39.4 18.5%
MCP 199.5 181.0 10.2% 102.1 93.7 9.0%
PKS 44.8 49.5 -9.5% 23.9 39.3 -39.2%
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