DJ PhosAgro PJSC: PhosAgro Reports Operating and Financial Results for FY 2022
PhosAgro PJSC (PHOR) PhosAgro PJSC: PhosAgro Reports Operating and Financial Results for FY 2022 03-March-2023 / 15:05 MSK The issuer is solely responsible for the content of this announcement.
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PhosAgro Reports Operating and Financial Results for FY 2022
Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, today announces its consolidated IFRS financial results for the fourth quarter (4Q) and 12 months (FY) of 2022.
FY 2022 highlights
In FY 2022, production of mineral fertilizers and other chemicals increased by 4.6% year-on-year to 11.1 million tonnes. This growth was driven by the efficient operation of new production facilities, launched as part of the Company's comprehensive long-term development programme, as well as the expansion of PhosAgro's product line.
Total fertilizer sales in FY 2022 increased by 6.4% year-on-year to more than 11 million tonnes, an all-time record for the Company. At the same time, sales of phosphate-based fertilizers (the Company's main products) increased by 8.3% to 8.4 million tonnes. This growth was driven by an increase in production volumes and strong demand for fertilizers in Russian and global markets.
Revenue for FY 2022 increased by 35.4% year-on-year and amounted to RUB 569.5 billion (USD 8.3 billion). The increase in revenue was the result of an increase in sales of end products.
The revenue increase was also driven by higher average sales prices in world markets and a focus on sales of high-margin fertilizers, which are in high demand among farmers.
The Company's adjusted EBITDA increased by 39% year-on-year in FY 2022, reaching RUB 266.9 billion (USD 3.9 billion). EBITDA margin for 2022 rose to 46.9%.
In FY 2022, the Company's adjusted free cash flow reached RUB 141 billion (USD 2.1 billion), an increase of 81.1% year-on-year.
Net debt as of 31 December 2022 had increased to RUB 180.3 billion (USD 2.6 billion), while the net debt/EBITDA ratio had decreased to 0.68x as of the end of the year.
Financial and operating highlights
Financial highlights
RUB mln FY 2022 FY 2021 Change %
Revenue 569,527 420,488 35.4%
EBITDA* 257,879 191,810 34.4%
Adj. EBITDA** 266,947 192,117 39.0%
Adj. EBITDA margin 46.9% 45.7%
Net profit 184,714 129,674 42.4%
Adj. net profit*** 182,297 130,512 39.7%
Free cash flow 104,295 77,857 34.0%
Adj. free cash flow**** 141,024 77,857 81.1%
31.12.2022 31.12.2021
Net debt 180,338 153,718
ND/adj. LTM EBITDA 0.68x 0.80x
Operating highlights
Production volumes by category
kt FY 2022 FY 2021 Change %
Phosphate-based fertilizers and feed phosphates 8,224.4 7,893.6 4.2%
Nitrogen-based fertilizers 2,546.6 2,412.1 5.6%
Other products 301.9 279.5 8.0%
TOTAL fertilizers and other products 11,072.9 10,585.2 4.6%
Sales volumes by category
kt FY 2022 FY 2021 Change %
Phosphate-based fertilizers and feed phosphates 8,402.8 7,762.4 8.3%
Nitrogen-based fertilizers 2,550.8 2,494.5 2.3%
Other products 143.9 177.3 -18.8%
TOTAL fertilizers and other products 11,097.5 10,434.2 6.4%
RUB/USD exchange rates: average FY 2022 rate: 68.5494; average FY 2021 rate: 73.6541; as of 31 December 2022: 70.3375; as of 31 December 2021: 74.2926.
* EBITDA is calculated as operating profit adjusted for depreciation and amortisation.
** Adj. EBITDA is EBITDA as reported minus FX differences from operating activities.
*** Adj. net profit is net profit as reported minus FX gain or loss.
**** Free cash flow adjusted for the amount of cash and cash equivalents written off as a result of the loss of ownership of foreign companies.
The Company faced a large number of challenges last year. At the same time, the Company was able to improve its financial performance considerably even in this environment thanks to a high level of efficiency and investments in capacity upgrades, a balanced financial policy and favourable prices in global markets.
Increased fertilizer production and sales drove year-on-year revenue growth of more than 35%. At the same time, revenue grew faster than the cost of sales, which increased by about 23% during the year.
These trends enabled the Company to increase its adjusted EBITDA by 39% year-on-year, while adjusted net profit rose by 40%.
The 81% increase in adjusted free cash flow to more than RUB 141 billion was driven by higher sales margins as well as efficient working capital management.
The Company enjoys a high degree of financial stability thanks to its robust performance in 2022. As of 31 December 2022, the net debt/adjusted EBITDA ratio had declined to 0.68x.
Among major events in terms of debt management, it is worth noting that holders of the Company's Eurobonds voted to amend the issue documentation. In the current environment, these changes enable us to continue reliably servicing our public debt to noteholders - both in Russia and beyond its borders.
Situation in mineral fertilizer markets in 4Q 2022
The situation in global mineral fertilizer markets in 4Q 2022 was marked by a low level of sales in key areas and downward price trends for the main types of fertilizers. The decline in prices for phosphate-based and potash fertilizers was driven by seasonal factors and a decrease in import demand (most significantly in Europe).
Prices for nitrogen-based fertilizers, including urea, declined due to the weakening of natural gas prices in Europe and an increase in the utilisation of domestic capacities for the production of ammonia and nitrogen-based fertilizers. The drop in import demand for urea in India in 4Q 2022 was driven by an increase in domestic production (including at new facilities) and was also one of the key factors in the overall decline in global prices for urea.
In 2022, the average price of urea was USD 573 per tonne (FOB Baltic), versus an average price of USD 475 per tonne (FOB Baltic) in 2021; the average price of MAP in 2022 was USD 849 per tonne (FOB Baltic), compared with an average price of USD 651 per tonne (FOB Baltic) in 2021. Prices for phosphate and potash feedstocks also remained high: the average price for potassium chloride in 2022 was USD 621 per tonne (FOB Baltic); the average price for phosphate feedstocks was USD 277 per tonne (FOB Morocco) (for feedstocks with P2O5 content of 31%-33%). The average price of sulphur in 2022 was USD 203 per tonne (FOB Baltic).
Market outlook
The market for nitrogen-based fertilizers in 1Q 2023 is marked by an excess of supply in the market due to high levels of carry-over stocks (in European countries as well as North and South America), which continues to have a negative impact on prices.
Phosphate-based fertilizer prices have now stabilised. Prices can expect support from an increase in seasonal activity in South America, and in Brazil in particular, as well as in the US domestic market following a significant reduction in imports in 2022.
About the Company
PhosAgro (www.phosagro.ru) is a vertically integrated Russian company and one of the world's leading producers of mineral phosphorous fertilizers and of high-grade apatite concentrate grading 39% P2O5 and higher. PhosAgro's fertilizers are highly effective, ensuring the improved quality of agricultural produce.
PhosAgro Group is the largest manufacturer of phosphate-based fertilisers in Europe (by total capacity of NAP/MAP/NP /NPK/NPS production), the largest producer of phosphite grading 39% P2O5 in the world and one of the leading global producers of ammonium and diammonium phosphate, one of Europe's leading and the only producer in Russia of monocalcium phosphate feed, and the only producer in Russia of nepheline concentrate.
The company's main products, including phosphite, 57 grades of fertilizer, phosphate feed, ammonium, and sodium tripolyphosphate, are used in 100 countries on all inhabited continents. Our priority markets, besides Russia and the CIS, are Latin America, Europe, and Asia.
The company's shares are listed on the Moscow Exchange and its Global Depositary Receipts (GDRs) are listed on the London Stock Exchange (MOEX and LSE ticker: PHOR).
More information about PhosAgro PJSC can be found on our site: www.phosagro.ru
RUB million Note 2022 2021
Revenues 6 569,527 420,488
Cost of Group products sold 7 (253,419) (206,082)
Cost of products for resale (15,599) (12,725)
Gross profit 300,509 201,681
Administrative and selling overhead expenses 8 (42,403) (27,845)
Taxes, other than income tax, net 9 (11,327) (5,946)
Other expenses, net 10 (9,371) (3,449)
Foreign exchange loss from operating activities, net (9,068) (307)
Operating profit 228,340 164,134
Gain from revaluation of financial assets measured at fair value 17 - 1,193
Finance income 11 4,439 778
Finance costs 11 (11,967) (5,044)
Foreign exchange gain/(loss) from financing activities, net 28 11,485 (531)
(b)
COVID-19 related expenses - (475)
Profit before tax 232,297 160,055
Income tax expense 12 (47,583) (30,381)
Profit /(loss) for the year 184,714 129,674
Attributable to:
Non-controlling interests* 52 (23)
Shareholders of the Company 184,662 129,697
Basic and diluted earnings per share (in RUB) 23 1,426 1,002
Other comprehensive loss
Items that will never be reclassified to profit or loss
Actuarial losses 26 (276) (36)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation difference (2,929) (350)
Foreign currency translation difference reclassified to profit or loss upon loss of control 29 (6,302) -
over foreign subsidiaries
Actuarial losses reclassified to profit or loss upon loss of control over foreign subsidiaries 61 -
Other comprehensive loss for the year (9,446) (386)
Total comprehensive income/(loss) for the year 175,268 129,288
Attributable to:
Non-controlling interests* 52 (23)
Shareholders of the Company 175,216 129,311
*Non-controlling interests are the minority shareholders of the subsidiaries of PJSC "PhosAgro"
RUB million Note 31 December 31 December
2022 2021
Assets
Property, plant and equipment 13 274,522 237,444
Advances issued for property, plant and equipment 9,270 13,237
Other non-current assets 17 8,546 2,058
Deferred tax assets 16 7,903 9,499
Non-current spare parts 5,125 4,698
Right-of-use assets 14 4,277 6,955
Intangible assets 2,099 1,756
Catalysts 1,965 2,049
Investments in associates 15 592 569
Non-current assets 314,299 278,265
Trade and other receivables 20 75,741 48,526
Inventories 19 39,349 41,177
Cash and cash equivalents 21 13,356 21,710
VAT and other taxes receivable 12,565 15,013
Other financial assets 18 210 216
Income tax receivable 93 540
Current assets 141,314 127,182
Total assets 455,613 405,447
Equity 22
Share capital 372 372
Share premium 7,494 7,494
Retained earnings 190,664 148,193
Actuarial losses (968) (753)
Foreign currency translation reserve - 9,231
Equity attributable to shareholders of the Company 197,562 164,537
Equity attributable to non-controlling interests 158 106
Total equity 197,720 164,643
Liabilities
Loans and borrowings 24 109,784 157,081
Deferred tax liabilities 16 17,820 12,937
Lease liabilities 25 1,660 3,459
Defined benefit obligations 26 1,050 952
Non-current liabilities 130,314 174,429
Loans and borrowings 24 80,974 12,710
Trade and other payables 27 39,412 41,754
VAT and other taxes payable 5,632 6,397
Lease liabilities 25 1,276 2,178
Income tax payable 203 3,334
Dividends payable 82 2
Current liabilities 127,579 66,375
Total equity and liabilities 455,613 405,447
RUB million Note 2022 2021
Cash flows from operating activities
Operating profit 228,340 164,134
Adjustments for:
Depreciation and amortisation 7, 8 29,539 27,676
Loss on disposal of property, plant and equipment and intangible assets 10 429 198
Operating profit before changes in working capital and provisions 258,308 192,008
Increase in inventories, catalysts and non-current spare parts (12,308) (10,855)
Decrease/(increase) in trade and other receivables* 7,498 (38,667)
(Decrease)/increase in trade and other payables* (3,131) 17,490
Cash flows from operations before income taxes and interest paid 250,367 159,976
Income tax paid (41,811) (28,806)
Finance costs paid (5,275) (4,945)
Cash flows from operating activities 203,281 126,225
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets (63,021) (47,951)
Cash and cash equivalents disposed as a result of loss of control over foreign subsidiaries 29 (36,729) -
Loans issued 18 (3,130) -
Borrowing cost capitalised paid 13 (976) (1,141)
Advances issued for right-of-use assets (850) -
Finance income received 3,783 583
Proceeds from disposal of financial assets measured at fair value through profit or loss 17 1,778 -
Other 159 141
Cash flows used in investing activities (98,986) (48,368)
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs 24 57,171 61,622
Repayment of borrowings 24 (23,926) (50,081)
Dividends paid to shareholders of the Company 22 (142,111) (72,260)
Lease payments 25 (1,429) (1,950)
Cash flows used in financing activities (110,295) (62,669)
Net (decrease)/increase in cash and cash equivalents (6,000) 15,188
Cash and cash equivalents at 1 January 21,710 8,460
Effect of exchange rates fluctuations (2,354) (1,938)
Cash and cash equivalents at 31 December 21 13,356 21,710
*Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activity
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ISIN: US71922G2XXX Category Code: FR TIDM: PHOR LEI Code: 25340053KRUNNYUWF472 OAM Categories: 2.2. Inside information Sequence No.: 227414 News ID: 1574381 End of Announcement EquityStory RS News Service =------------------------------------------------------------------------------------
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March 03, 2023 07:05 ET (12:05 GMT)
