Phosagro reduced its financial results in Q1 23 due to lower prices of fertilizers

MOSCOW, May 18 (Reuters) – Russian fertilizer maker PhosAgro slashed its first-quarter 2023 financial results as global fertilizer prices fell from early-2022 highs, “as high levels of uncertainty and sanctions pressure on Russia (the biggest the global fertilizer market) led to a speculative increase in the prices of all types of fertilizers, the company said on Thursday.

Q1 2023 revenue decreased by 35.7% year-on-year to 116.2 billion rubles ($1.6 billion).

Adjusted EBITDA (EBITDA net of exchange differences from operating activities) amounted to RUB 49 billion, which is lower than in the same period last year, but provided a profitability of 42.2%, the report says.

EBITDA fell by 36.8% to PLN 55.4 billion, net profit – by 35.4% to PLN 28.1 billion.

Adjusted net income fell 42.8% to $33.9 billion.

Net debt as at March 31, 2023 amounted to 142.4 billion rubles, and the ratio of net debt to adjusted EBITDA at the end of the quarter was 0.62x.

According to the results of the first quarter, the production of mineral fertilizers and other products of the chemical complex increased by 6.1% compared to the same period last year and exceeded 2.8 million tons.

“This increase was achieved thanks to the gradual achievement of the design capacity of the production complex in Volkhov, launched as part of the company’s comprehensive, long-term development program,” said Phosagro.

Total sales of products for the first quarter increased by 1.5% compared to the same period last year, exceeding 2.7 million tons.

The situation on the global market of mineral fertilizers in the first quarter of 2023 was characterized by a weakening demand for all types of fertilizers due to high inventories in key markets and a downward price trend.

“The beginning of the second quarter was characterized by persistently low demand for fertilizers from key markets, which was influenced by the end of the spring season in the regions of the northern hemisphere and the off-season period in key Asian and South American markets.” (Olga Popova. Text: Anastasia Teterevleva)