DJ OJSC PhosAgro: PhosAgro Reports 2Q and 1H 2021 Operating Results: 1H Fertilizer Production Reached 5.1 Million Tonnes; Production of Key Products (DAP/MAP + NPK) in 2Q Increased 8% Year-on-Year
OJSC PhosAgro (PHOR) OJSC PhosAgro: PhosAgro Reports 2Q and 1H 2021 Operating Results: 1H Fertilizer Production Reached 5.1 Million Tonnes; Production of Key Products (DAP/MAP + NPK) in 2Q Increased 8% Year-on-Year 30-Jul-2021 / 19:00 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 30 July 2021
PhosAgro Reports 2Q and 1H 2021 Operating Results:
1H Fertilizer Production Reached 5.1 Million Tonnes; Production of Key Products (DAP/MAP + NPK) in 2Q Increased 8% Year-on-Year
Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, announces that its fertilizer production in 1H 2021 increased by 0.7% year-on-year to 5.1 million tonnes.
2Q and 1H 2021 highlights
In 1H 2021, production of phosphate rock and nepheline concentrate decreased by 1.9% year-on-year to 5.8 million tonnes; in 2Q 2021, production of phosphate rock and nepheline concentrate decreased by 1.7% to 2.9 million tonnes.
Fertilizer output in 1H 2021 increased by 0.7% to 5.1 million tonnes thanks to capacity upgrades to increase the production of NPK fertilizers.
Fertilizer sales in 1H 2021 remained essentially unchanged year-on-year at 5.2 million tonnes. At the same time, sales of nitrogen-based fertilizers increased by 8% over the same period on the back of strong seasonal demand.
Fertilizer sales in 2Q 2021 amounted to 2.3 million tonnes. The year-on-year decrease was due to a delay in the start of seasonal demand in India, postponing some sales to the third quarter.
Production and sales volumes
Production volumes by category (kt) 1H 2021 1H 2020 Chng, % 2Q 2021 2Q 2020 Chng, % Phosphate-based & MCP 3,825.5 3,807.5 0.5% 1,842.4 1,869.6 -1.5% Nitrogen-based fertilizers 1,231.6 1,215.2 1.3% 600.2 597.8 0.4% TOTAL fertilizers 5,057.1 5,022.7 0.7% 2,442.6 2,467.4 -1.0% Phosphate rock and nepheline concentrate 5,819.4 5,931.3 -1.9% 2,927.2 2,976.4 -1.7% Other products 85.4 92.8 -8.0% 37.6 42.7 -11.9% Sales volumes by category (kt) 1H 2021 1H 2020 Chng, % 2Q 2021 2Q 2020 Chng, % Phosphate-based & MCP 3,743.6 3,876.7 -3.4% 1,667.1 1,789.4 -6.8% Nitrogen-based fertilizers 1,413.6 1,308.9 8.0% 626.3 606.1 3.3% TOTAL fertilizers 5,157.2 5,185.6 -0.5% 2,293.4 2,395.5 -4.3% Phosphate rock and nepheline concentrate 1,951.3 2,159.7 -9.6% 964.1 1,084.0 -11.1% Other products 87.9 90.7 -3.1% 39.6 39.1 1.3%
PhosAgro CEO Andrey Guryev said:
"PhosAgro managed to maintain fertilizer production and sales at record high levels the second quarter and the first half of the year. This was driven by our ongoing investments in building new production facilities and upgrading existing ones, as well as strong seasonal demand in our traditional sales markets; low carry-over stocks in India, South Asia and the United States; and the excellent affordability of fertilizers for farmers.
"This year, our output profile has continued to move in the direction of a greater share of high-margin complex NPK fertilizers. Over the first half of the year, we increased production of these fertilizers by more than 11% year-on-year. This demonstrates the soundness of the Company's development strategy, which is aimed at increasing our presence in premium market segments by offering customers comprehensive solutions.
"I would also like to note that our high sales volumes were driven by a recovery in global fertilizer prices after a 1.5-fold decline during the previous three years. This fact will undoubtedly be reflected in the Company's financial performance for the period.
"In the short term, we expect the traditional seasonal increase in demand in the Indian and Brazilian markets to support global demand for fertilizers. This factor may help keep fertilizer prices at their current levels."
Production volumes by type:
Production volumes by category (kt) 1H 2021 1H 2020 Chng, % 2Q 2021 2Q 2020 Chng, % Phosphate rock 5,257.0 5,354.2 -1.8% 2,642.3 2,684.6 -1.6% Nepheline concentrate 562.4 577.1 -2.5% 284.9 291.8 -2.4% TOTAL 5,819.4 5,931.3 -1.9% 2,927.2 2,976.4 -1.7% Phosphate-based fertilizers DAP/MAP 1,655.0 1,617.1 2.3% 807.6 770.8 4.8% NPK 1,544.1 1,386.6 11.4% 768.5 693.2 10.9% NPS 314.1 444.0 -29.3% 121.4 235.0 -48.3% APP 99.3 116.7 -14.9% 39.2 58.0 -32.4% MCP 202.2 202.2 0.0% 99.9 101.9 -2.0% PKS 10.8 40.9 -73.6% 5.8 10.7 -45.8% TOTAL 3,825.5 3,807.5 0.5% 1,842.4 1,869.6 -1.5% Nitrogen-based fertilizers AN 358.5 362.8 -1.2% 176.1 180.9 -2.7% Urea 837.2 843.6 -0.8% 408.9 408.1 0.2% Ammonium sulphate 35.9 8.8 308.0% 15.2 8.8 72.7% TOTAL 1,231.6 1,215.2 1.3% 600.2 597.8 0.4% TOTAL fertilizers 5,057.1 5,022.7 0.7% 2,442.6 2,467.4 -1.0% Other products STPP 41.6 47.6 -12.6% 17.6 21.7 -18.9% Other 43.8 45.2 -3.1% 20.0 21.0 -4.8% TOTAL other products 85.4 92.8 -8.0% 37.6 42.7 -11.9% Feedstocks Ammonia 956.6 1,012.6 -5.5% 456.4 505.0 -9.6% Phosphoric acid 1,420.1 1,380.6 2.9% 699.5 684.8 2.1% Sulphuric acid 3,554.0 3,393.9 4.7% 1,739.4 1,714.0 1.5% Ammonium sulphate 102.6 143.1 -28.3% 29.8 75.9 -60.7% TOTAL feedstocks 6,033.3 5,930.2 1.7% 2,925.1 2,979.7 -1.8%
The production of phosphoric acid, the main feedstock in the production of phosphate-based fertilizers, increased by 2.1% in 2Q 2021 to 0.7 million tonnes. The increase was made possible thanks to upgrades to production units and efficiency improvements. The growth in phosphoric acid production during the quarter was limited by the large volume of scheduled maintenance that was postponed until the third quarter.
The 1.5% year-on-year decrease in the production of phosphate-based fertilizers in 2Q 2021 was driven by an increase in the production of complex NPK fertilizers, which in the current market conditions netted higher returns and enabled the Company to bolster its positions in priority sales markets.
In the first half of the year, production in the phosphorus segment rose by 0.5% year-on-year due to an increase in the production of premium brands of NPK fertilizers. This growth was related directly to work carried out to increase the productivity of the Company's phosphoric acid production lines.
In 1H and 2Q 2021, production in the nitrogen segment grew by 1.3% and 0.4%, respectively, year-on-year thanks to an increase in the production of commercial ammonium sulphate.
In the first half of the year, the production of sulphuric acid rose by 4.7% year-on-year to 3.6 million tonnes. The reason for this considerable increase was that the new sulphuric acid production unit in Cherepovets reached full capacity in early 2021. With an annual nameplate capacity of 1,100 thousand tonnes, the new production line will increase the Company's self-sufficiency in sulphuric acid.
Sales volumes by type:
Sales volumes by category (kt) 1H 2021 1H 2020 Chng, % 2Q 2021 2Q 2020 Chng, % Phosphate rock 1,386.0 1,581.6 -12.4% 680.2 790.6 -14.0% Nepheline concentrate 565.3 578.1 -2.2% 283.9 293.4 -3.2% TOTAL 1,951.3 2,159.7 -9.6% 964.1 1,084.0 -11.1% Phosphate-based fertilizers DAP/MAP 1,692.7 1,745.6 -3.0% 815.3 820.7 -0.7% NPK 1,418.2 1,357.3 4.5% 607.1 575.7 5.5% NPS 309.2 419.7 -26.3% 100.5 220.3 -54.4% APP 104.2 109.8 -5.1% 40.8 46.7 -12.6% MCP 211.8 199.5 6.2% 98.1 102.1 -3.9% PKS 7.5 44.8 -83.3% 5.3 23.9 -77.8% TOTAL 3,743.6 3,876.7 -3.4% 1,667.1 1,789.4 -6.8% Nitrogen-based fertilizers AN 438.9 394.4 11.3% 186.1 158.4 17.5% Urea 934.7 911.9 2.5% 430.5 445.1 -3.3% Ammonium sulphate 40.0 2.6 1,438.5% 9.7 2.6 273.1% TOTAL 1,413.6 1,308.9 8.0% 626.3 606.1 3.3% TOTAL fertilizers 5,157.2 5,185.6 -0.5% 2,293.4 2,395.5 -4.3% Other products STPP 44.2 44.5 -0.7% 19.5 18.4 6.0% Other 43.7 46.2 -5.4% 20.1 20.7 -2.9% TOTAL other products 87.9 90.7 -3.1% 39.6 39.1 1.3%
Fertilizer sales in 1H and 2Q 2021 decreased year-on-year to 5.2 million tonnes and 2.3 million tonnes, respectively. The decrease was due to, among other factors, restrained seasonal demand in India as a result of a late decision on subsidies and the relatively small level of subsidies.
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