Russia’s PhosAgro Reports 12 percent Revenue Increase

- November 26th, 2019

PhosAgro, has released its interim consolidated financial results, reporting a 12 percent year-over-year increase in revenue.

PhosAgro (LSE:PHOR), a vertically integrated phosphate-based fertilizer producers, has released its interim consolidated financial results, reporting a 12 percent year-over-year increase in revenue.

As quoted from the press release:

Revenue in 3Q 2019 rose by 3 percent year-on-year to RUB 64.6 billion (USD 1.0 billion) mainly due to higher sales in priority markets. Revenue for 9M 2019 increased by 12 percent year-on-year to RUB 195.0 billion (US$3.0 billion).

EBITDA for 3Q 2019 decreased by 9 percent year-on-year to RUB 21.3 billion (US$330 million) due to a correction in global fertilizer prices. EBITDA margin remained at a comfortable level of 33 percent due to lower purchase prices for key raw materials. EBITDA for 9M 2019 increased by 14 percent year-on-year to RUB 64.4 billion (US$989 million), while EBITDA margin also remained at 33 percent.

Free cash flow in the third quarter decreased by 71 percent  year-on-year to RUB 3.6 billion (US$56 million) as a result of a correction in global fertilizer prices and seasonal outflows related to accumulation of working capital. Free cash flow reached RUB 32.6 billion for 9M 2019, an increase of 48 percent year-on-year.

Net debt/EBITDA decreased to 1.5x as of 30 September 2019, from 1.8x as of 31 December 2018, reflecting strong EBITDA performance and the gradual appreciation of the rouble against the US dollar over 9M 2019. Net debt as of 30 September 2019 amounted to RUB 122.9 billion (US$1.9 billion).

Commenting on the 3Q 2019 financial results, PhosAgro CEO Andrey Guryev said:

“PhosAgro delivered a robust performance in the third quarter thanks to ongoing efforts to improve efficiency. Exceptional flexibility in both production and sales enabled the Company to increase revenue during the quarter, while also achieving lower cash cost of production for DAP.”

“Despite a decrease in average fertilizer prices in the third quarter, our EBITDA margin of 33 percent was one of the highest in the sector. We were able to achieve this thanks to the completion of upgrades to a number of production facilities at the end of last year and higher levels of self-sufficiency in key inputs. This has further strengthened the Company’s global competitive edge.”

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