DJ PhosAgro Reports 3Q and 9M 2020 Operating Results: Phosphate-Based Fertilizer Sales Rise by 15% Year-on-Year in 3Q 2020
OJSC PhosAgro (PHOR)
PhosAgro Reports 3Q and 9M 2020 Operating Results: Phosphate-Based
Fertilizer Sales Rise by 15% Year-on-Year in 3Q 2020
20-Oct-2020 / 11:00 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
For Immediate Release 20 October 2020
PhosAgro Reports 3Q and 9M 2020 Operating Results:
Phosphate-Based Fertilizer Sales Rise by 15% Year-on-Year in 3Q 2020
Moscow - PhosAgro (Moscow Exchange, LSE: PHOR), one of the world's leading
vertically integrated phosphate-based fertilizer producers, reports that
fertilizer sales increased by 10% year-on-year in 9M 2020, to 7.9 million
tonnes.
3Q and 9M 2020 Highlights:
Phosphate rock and nepheline concentrate production increased by 1.3%
year-on-year to 8.9 million tonnes in 9M 2020. In 3Q 2020, production rose
by 1.3% year-on-year to 2,976.6 thousand tonnes
Total fertilizer production increased by almost 5% year-on-year in 9M 2020,
reaching 7.5 million tonnes. This growth was due to the ongoing
modernisation of production facilities and efficiency improvements achieved
during the past year. Fertilizer production for 3Q 2020 amounted to 2,503.3
thousand tonnes, an increase of 1.7% year-on-year.
Fertilizer sales increased by 10% year-on-year in 9M 2020 to 7.9 million
tonnes. This impressive growth was driven by strong demand in PhosAgro's
priority sales markets. In 3Q 2020, fertilizer sales amounted to 2,716.5
thousand tonnes, up by 9.9% year-on-year due to high demand from ?anada and
India.
The domestic market accounted for 31% of sales in 9M 2020, nearly unchanged
year-on-year.
PhosAgro production and sales volumes:
Production volume by category
(kt) 9? 9? 2019 Chng, % 3Q 2020 3Q 2019 Chng, %
2020
Phosphate-based 5,748. 5,490.0 4.7% 1,940.5 1,930.3 0.5%
& MCP 2
Nitrogen-based 1,769. 1,672.0 5.8% 562.8 530.1 6.2%
fertilizers 2
TOTAL 7,517. 7,162.0 5.0% 2,503.3 2,460.4 1.7%
fertilizers 4
Phosphate rock 8,907. 8,797.8 1.3% 2,976.6 2,939.0 1.3%
and nepheline 9
concentrate
Other products 161.1 132.9 21.2% 59.6 41.9 42.3%
Sales volume by category
(kt) 9? 9? 2019 Chng, % 3Q 2020 3Q 2019 Chng, %
2020
Phosphate-based 6,123. 5,516.6 11.0% 2,247.0 1,958.8 14.7%
& MCP 7
Nitrogen-based 1,775. 1,660.3 7.0% 469.5 512.0 -8.3%
fertilizers 8
TOTAL 7,899. 7,176.9 10.1% 2,716.5 2,470.8 9.9%
fertilizers 5
Phosphate rock 3,280. 3,293.3 -0.4% 1,121.2 1,029.6 8.9%
and nepheline 9
concentrate
Other products 139.5 137.4 1.5% 48.8 45.8 6.6%
PhosAgro CEO Andrey Guryev said:
"Despite some improvement in the epidemiological situation in the summer
period, we have kept in place the comprehensive prevention measures that
were introduced when the first signs of the pandemic appeared. As a result,
in the face of a new wave of coronavirus infections in Russia and globally,
PhosAgro is fully prepared to continue operating at full capacity, following
effective protocols to protect its personnel and the residents of the
regions of where it operates.
"I want to highlight PhosAgro's achievements in the field of sustainable
development. MSCI ESG Research assigns an MSCI ESG rating by assessing
companies' inherent environmental, social responsibility and governance
(ESG) risks, and their ability to manage those risks relative to
competitors. PhosAgro's achievements in this area earned us a rating upgrade
from BB to BBB in 3Q 2020. This rating is one of the highest assigned to
Russia's largest companies.
"In addition, PhosAgro recently won a prestigious nationwide competition in
the field of sustainable development, Russian Business Leaders: Dynamics and
Responsibility 2019, held by the Russian Union of Industrialists and
Entrepreneurs. The Company won the Grand Prix for the second time, making
PhosAgro the only winner of the highest award in the entire 23-year history
of the competition.
"Looking at our 9M 2020 operating results, I would note that we worked very
efficiently, increasing fertilizer production by 5% year-on-year. At the
same time, improved production efficiency, a favourable pricing environment
and our flexible sales system enabled us to sell a record 6.1 million tonnes
of phosphate-based fertilizers in 9M 2020, an increase of 11% year-on-year,
while in 3Q 2020 sales were up by nearly 15% year-on-year.
"Turning to global fertilizer markets, during 3Q 2020 prices were driven
higher by strong seasonal demand in Brazil and India combined with
restrictions on exports from China and rising prices for phosphoric acid."
Production volumes by type:
Production volumes by category
(kt) 9? 2020 9? 2019 Chng, % 3Q 2020 3Q 2019 Chng, %
Phosphate 8,037.4 7,899.8 1.7% 2,683.2 2,641.4 1.6%
rock
Nepheline 870.5 898.0 -3.1% 293.4 297.6 -1.4%
concentrat
e
TOTAL 8,907.9 8,797.8 1.3% 2,976.6 2,939.0 1.3%
Phosphate-based fertilizers
DAP/MAP 2,388.5 2,432.2 -1.8% 771.3 820.3 -6.0%
NPK 2,123.3 2,097.7 1.2% 736.7 796.3 -7.5%
NPS 746.2 486.7 53.3% 302.2 175.3 72.4%
APP 157.0 133.5 17.6% 40.2 47.9 -16.0%
MCP 289.2 268.4 7.7% 87.0 82.5 5.5%
PKS 44.0 71.5 -38.5% 3.1 8.0 -61.0%
TOTAL 5,748.2 5,490.0 4.7% 1,940.5 1,930.3 0.5%
Nitrogen-based fertilizers
AN 505.7 400.6 26.2% 142.9 116.8 22.3%
Urea 1,263.5 1,271.4 -0.6% 419.9 413.3 1.6%
TOTAL 1,769.2 1,672.0 5.8% 562.8 530.1 6.2%
TOTAL 7,517.4 7,162.0 5.0% 2,503.3 2,460.4 1.7%
fertilizer
s
Other products
STPP 74.7 73.3 1.9% 27.3 21.2 28.4%
Other 86.4 59.6 45.0% 32.4 20.7 56.5%
TOTAL 161.1 132.9 21.2% 59.6 41.9 42.3%
other
products
Feedstocks
Ammonia 1,509.5 1,470.0 2.7% 496.9 484.4 2.6%
Phosphoric 2,073.4 2,041.0 1.6% 692.8 691.8 0.1%
acid
Sulphuric 5,136.9 4,610.8 11.4% 1,742.9 1,590.4 9.6%
acid
Ammonium 214.5 0.0 n/a 71.5 0.0 n/a
sulphate
TOTAL 8,934.3 8,121.8 10.0% 3,004.1 2,766.6 8.6%
feedstocks
In 9M 2020, production in the phosphate segment rose by 4.7% year-on-year
due to increased capacities at existing production lines for phosphoric acid
and phosphate-based fertilizers. This was the result of improvements in
phosphoric acid production technology and last year's overhauls of
fertilizer production facilities.
Output in the nitrogen segment rose 5.8% year-on-year in 9M 2020 due to a
26.2% increase in AN production to 505.7 thousand tonnes. This increase was
made possible when a new production unit for nitric acid (the main raw
material for AN production) was brought online and began operating at full
capacity. Other contributing factors included the timely completion of
maintenance work on existing nitric acid units and upgrades to AN
capacities.
Sulphuric acid production increased by 11.4% year-on-year in 9M 2020 to 5.1
million tonnes. This considerable increase in production was associated with
the launch of a new sulphuric acid production unit in Cherepovets in the
middle of 1Q 2020. The new production unit also had an impact on
year-on-year production growth in Q3 2020. With an annual nameplate capacity
of 1,100 thousand tonnes, the new production line will increase the
Company's self-sufficiency in sulphuric acid.
As part of its Strategy-2025, PhosAgro's synthetic ammonium sulphate
production unit in Cherepovets was ramped up to full capacity (up to 300
thousand tonnes per year) at the beginning of the year; the production
increase will reduce the volume of ammonium sulphate purchases from external
suppliers by more than half. Ammonium sulphate is used as a feedstock for
the production of sulphate grades of NPK(S) fertilizers and reduces the cost
of their production in comparison with purchased ammonium sulphate.
Sales volumes by type:
Sales volumes by category
(kt) 9? 2020 9? 2019 Chng, % 3Q 2020 3Q 2019 Chng, %
Phosphate 2,409.6 2,398.5 0.5% 828.0 741.4 11.7%
rock
Nepheline 871.3 894.8 -2.6% 293.2 288.2 1.7%
concentrat
e
TOTAL 3,280.9 3,293.3 -0.4% 1,121.2 1,029.6 8.9%
Phosphate-based fertilizers
DAP/MAP 2,667.9 2 509.6 6.3% 922.3 907.1 1.7%
NPK 2,244.0 2 105.6 6.6% 886.7 768.5 15.4%
NPS 719.5 438.4 64.1% 299.8 151.9 97.4%
APP 148.1 133.5 10.9% 38.3 32.3 18.6%
MCP 294.7 254.6 15.8% 95.2 73.6 29.3%
PKS 49.5 74.9 -33.9% 4.7 25.4 -81.5%
TOTAL 6,123.7 5,516.6 11.0% 2,247.0 1,958.8 14.7%
Nitrogen-based fertilizers
AN 467.8 391.4 19.5% 73.4 116.3 -36.9%
Urea 1,308.0 1,268.9 3.1% 396.1 395.7 0.1%
TOTAL 1,775.8 1,660.3 7.0% 469.5 512.0 -8.3%
TOTAL 7,899.5 7,176.9 10.1% 2,716.5 2,470.8 9.9%
Fertilizer
s
Other products
STPP 70.9 77.6 -8.6% 26.4 26.4 0.0%
Other 68.6 59.8 14.7% 22.4 19.4 15.5%
TOTAL 139.5 137.4 1.5% 48.8 45.8 6.6%
feedstocks
In 9M 2020, fertilizer sales rose by 11% year-on-year to 6.1 million tonnes.
The brisk growth in sales volumes was supported by a favourable pricing
environment in both domestic and international markets and by the
affordability of fertilizers for end consumers. Other supporting factors
included higher demand for NPK(S) fertilizers from India, where production
was suspended in spring due to coronavirus restrictions.
In 3Q 2020, sales of PhosAgro's phosphate-based fertilizers increased by
14.7% year-on-year to 2.2 million tonnes due to a 26% increase in sales of
NPK(S) fertilizers to 1.2 million tonnes. Key growth drivers included the
affordability of fertilizers for end consumers in domestic and international
markets and reduced supply as a result of the suspension of fertilizer
production in China and India due to coronavirus restrictions.
In 9M 2020, sales of PhosAgro's nitrogen-based fertilizers rose by 7.0%
year-on-year to 1.8 million tonnes. Ammonium nitrate sales grew at the
highest pace, up 19.5% to 467.8 thousand tonnes, amid growth in Russia's
agricultural sector.
Global seasonal demand for nitrogen-based fertilizers peaked in the first
two quarters of the year; thus, 3Q 2020 saw a reduction in demand, which
resulted in lower sales year-on-year.
Sale volumes by key markets:
Sales volumes by region
Phosphate-based fertilizers
(kt) 9? 2020 9? 2019 Chng, % 3Q 2020 3Q 2019 Chng, %
Russia 2,028.6 1,926.5 5.3% 872.3 890.3 -2.0%
North 291.3 426.6 -31.7% 135.6 39.3 245.0%
America
Latin 739.2 624.2 18.4% 230.3 211.6 8.8%
America
Europe 1,557.6 1,518.5 2.6% 476.9 528.1 -9.7%
CIS 247.0 313.6 -21.2% 74.2 71.8 3.3%
India 803.6 465.4 72.7% 370.0 114.9 221.9%
Other 456.4 241.8 88.8% 87.7 102.9 -14.7%
Total 6,123.7 5,516.6 11.0% 2,247.0 1,958.9 14.7%
Nitrogen-based fertilizers
Russia 415.7 371.3 12.0% 27.9 17.0 64.1%
North 189.5 200.3 -5.4% 7.2 37.0 95.1%
America
Latin 665.5 547.5 21.6% 227.3 326.9 -30.5%
America
Europe 369.4 412.4 -10.4% 116.8 84.9 37.6%
CIS 11.6 13.4 -13.4% 0.0 3.0 -100.0%
Other 124.1 115.5 7.4% 25.3 43.2 -41.4%
Total 1,775.8 1,660.4 7.0% 469.5 512.0 -8.3%
In 9M 2020, PhosAgro's domestic sales of phosphate-based fertilizers rose by
5.3% year-on-year to over 2 million tonnes. This increase was driven by
higher sales to Russian farmers as the entire agricultural sector in Russia
grew.
Export sales for the same period rose by 14.1% year-on-year to 4.1 million
tonnes. To a large extent, this growth was achieved due to the advanced
sales system and the high quality of fertilizers produced. Favourable
weather conditions, the affordability of fertilizers and the springtime
suspension of fertilizer production in India and China as a result of
coronavirus restrictions also contributed to sales growth. All these factors
enabled PhosAgro to increase its sales in key markets in Latin America and
Europe.
In 9M 2020, sales of phosphate-based fertilizers to the US totalled
approximately 200 thousand tonnes, almost two times lower than in the same
period in 2019. This was due to an unfavourable pricing environment in the
US market at the beginning of the year and the Mosaic petition filed against
suppliers of phosphate-based fertilizers from Morocco and Russia. PhosAgro's
flexible sales and distribution network enabled it to redirect fertilizer
supplies to other markets, including Canada and India, without losses.
Market highlights
Phosphate-based fertilizers
The phosphate-based fertilizer market was characterised by seasonal demand
from the key geographies of India and Brazil, where preliminary estimates
show that DAP/MAP/NPK/NPS imports rose year-on-year. Additional factors
contributing to market activity included a significant increase in contract
prices for phosphoric acid (more than 10%) and the continued limited export
supply from China, where supplies were directed towards the domestic market.
Urea/nitrogen fertilizers:
High seasonal demand from the key markets of India and Brazil was the centre
of attention in the global urea market, contributing to an increase in
global prices during 3Q 2020. Ammonium nitrate prices were supported by an
earlier recovery in demand and supplies to the Russian domestic market.
Contacts
PJSC PhosAgro
Andrey Serov, Head of the Investor Relations Department
+7 495 232 9689 ext. 2187
ir@phosagro.ru
Timur Belov, Press Officer
+7 495 232 9689 ext. 2652
pr@phosagro.ru
EM
Sam VanDerlip
vanderlip@em-comms.com
+44 207 002 7859
About PhosAgro
PhosAgro (www.phosagro.ru [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%, 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, over 50 grades of
fertilizers, feed phosphates, ammonia, and sodium tripolyphosphate, which
are used by customers in 102 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: TST
TIDM: PHOR
LEI Code: 25340053KRUNNYUWF472
OAM Categories: 2.2. Inside information
Sequence No.: 86184
EQS News ID: 1141800
End of Announcement EQS News Service
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