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.


 

 

 

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(b)

11,485

(531)

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 over foreign subsidiaries

29

(6,302)

-

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
2022

31 December
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: US71922G2093
Category Code: FR
TIDM: PHOR
LEI Code: 25340053KRUNNYUWF472
OAM Categories: 2.2. Inside information
Sequence No.: 227414
News ID: 1574381

 
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