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Acron Group’s Mineral Fertiliser Output Up 4% in Q1 2019

24 Apr 2019 10:47



Acron Group’s Mineral Fertiliser Output Up 4% in Q1 2019

24 April 2019

Acron Group’s Mineral Fertiliser Output Up 4% in Q1 2019

Group’s Consolidated Output (including operating results for Acron, Dorogobuzh and North-Western Phosphorous Company)

Product, ‘000 tQ1 2019Q1 2018YOY, %
MINERAL FERTILISERS
Ammonia6816672.1
Incl. in-house consumption592558 
Nitrogen fertilisers1,2421,06416.7
Incl. in-house consumption286271 
AN5014990.3
Incl. in-house consumption108135 
Urea31524926.4
Incl. in-house consumption178136 
UAN42631634.8
Complex fertilisers610699-12.7
Incl. in-house consumption1016 
NPK574586-2.1
Incl. in-house consumption1016 
Bulk blends37113-67.6
Total commercial output for Mineral Fertilisers1,6451,5843.8
INDUSTRIAL PRODUCTS
Organic synthesis products1241157.6
Incl. in-house consumption6358 
Methanol27262.8
Incl. in-house consumption2321 
Formalin45428.0
Incl. in-house consumption4036 
Urea-formaldehyde resins52479.9
Non-organic compounds, including:196199-1.6
Low-density and technical-grade AN494119.3
Industrial urea29276.7
Calcium carbonate106119-11.0
Liquid carbon dioxide10100.1
Argon2213.3
Total commercial output for Industrial Products2562560.0
PHOSPHATE INPUTS
Apatite concentrate258312-17.2
Incl. in-house consumption223253 
Total commercial output for Apatite Concentrate3559-41.0
TOTAL COMMERCIAL OUTPUT1,9361,9001.9

Note:

Commercial output is output less in-house consumption.

Chairman of Acron’s Board of Directors Alexander Popov commented on the results:

“In Q1 2019, Acron Group has continued increasing production output and setting new records. Mineral fertiliser output was up 4% year-on-year to 1,645,000 tonnes, and total commercial output increased 2% to 1,936,000 tonnes.

“The Group’s ammonia output was up 2% year-on-year to 681,000 tonnes. The volume of ammonia processed to end products was up 6% to 592,000 tonnes, setting yet another record. Due to the commissioning of a new urea unit at the end of 2018, agricultural-grade urea output was up 26% to 315,000 tonnes. Most of the additional urea was used to produce UAN. In Q1 2019, UAN output increased 35% year-on-year to 426,000 tonnes.

“The Group’s total complex fertiliser output was down 13% year-on-year to 610,000 tonnes, mainly because Dorogobuzh suspended its blend production due to weaker regional demand. However, in January 2019 the Group put on stream a new blended fertiliser unit at the Acron production facility in Veliky Novgorod, significantly expanding its product portfolio with blends, which are increasingly popular globally.

“In Q1 2019, apatite concentrate output decreased 17% due to a higher volume of overburden operations year-on-year. Additionally, the ore extraction from the underground mine expands due to its development. At this stage, the ore contains less phosphorus than the ore from the open-pit mine. However, it is expected that ore quality will improve and apatite concentrate output will go back up with further development of the underground mine.

“In April 2019, the European Commission resolved to introduce preliminary anti-dumping duties on UAN imports from Russia (31.9% for Acron Group and 34% for other producers). In 2018, we imported 399,000 tonnes of UAN to Europe. That is a significant volume, but we are able to minimise the losses from these duties thanks to our operating flexibility and diversified sales structure. Depending on the market environment, we can reshuffle our product mix to other nitrogen-based fertilisers. UAN prices in Europe increased significantly in response to the threat of new anti-dumping duties and remain high after their introduction. In future, if the effectiveness of our sales to Europe decreases, Acron Group may redirect part of its exports to other markets, such as Latin America, where we started developing several of our own trading networks in 2018. At the same time, we will pursue legal efforts to protect our interests in the competent EU bodies. We estimate our 2019 losses from the new duties at a maximum of USD 10 million”.

Market Trends

In February 2019, urea prices fell globally due to a seasonal drop in demand, except in China, where high production costs force local producers to keep urea prices unchanged at approximately USD 290 FOB. Industry experts expect that the global urea price will start recovering in Q3 2019, and its growth will accelerate in Q4 2019 due to stronger seasonal demand and high prices of Chinese urea available for export.

In Q1 2019, the price of ammonium nitrate remained almost flat despite the decline in urea prices. UAN prices continued decreasing following urea prices, while UAN still remained a premium product.

In Q1 2019, NPK prices decreased amid a negative trend in pricing for nitrogen and phosphate fertilisers. However, this decrease was less tangible, and the premium over the product basket increased.

Average Indicative Prices, USD/t, FOB Baltic/Black Sea

 Q1 2019Q4 2018Q12018Q1 2019 / Q4 2018changeQ1 2019 / Q1 2018change
NPK 16-16-16312316284-1.1%10.0%
AN182186186-2.3%-2.3%
UAN178229162-22.3%9.8%
Urea243293224-17.2%8.3%
Ammonia276336284-18.1%-2.9%

Media Contacts:

Sergey DorofeevAnastasiya GromovaTatiana SmirnovaPublic RelationsPhone: +7 (495) 777-08-65 (ext. 5196)

Investor Contacts:

Ilya PopovInvestor RelationsPhone: +7 (495) 745-77-45 (ext. 5252)

Background Information

Acron Group is a leading vertically integrated mineral fertiliser producer in Russia and globally, with chemical production facilities in Veliky Novgorod (Acron) and the Smolensk region (Dorogobuzh). The Group owns and operates a phosphate mine in Murmansk region (North-Western Phosphorous Company, NWPC) and is implementing a potash development project in Perm Krai (Verkhnekamsk Potash Company, VPC). It owns transportation and logistics infrastructure, including three Baltic port terminals and distribution networks in Russia and China. Acron’s subsidiary, North Atlantic Potash Inc. (NAP), holds mining licences for 11 parcels of the potassium salt deposit at Prairie Evaporite, Saskatchewan, Canada. Acron also holds a minority stake (19.8%) in Polish Grupa Azoty, one of the largest chemical producers in Europe.

In 2018, the Group sold 7.3 million tonnes of various products to 67 countries, with Russia, Brazil, Europe and the United States as key markets.

In 2018, the Group posted consolidated IFRS revenue of RUB 108,062 million (USD 1,723 million) and net profit of RUB 13,318 million (USD 212 million). Acron’s shares are on the Level 1 quotation list of the Moscow Exchange and its global depositary receipts are traded at the London Stock Exchange (ticker AKRN). Acron employs approximately 11,000 people.

For more information about Acron Group, please visit www.acron.ru/en.


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6th May 20212:10 pmGNWPJSC Acron Board of Directors Issues Dividend Recommendations  
30th Apr 20212:26 pmGNWResolution of PJSC Acron Board of Directors
30th Apr 20211:36 pmGNWAcron Posts 2020 Annual Report on its Website
30th Apr 202112:44 pmGNWAcron Extends for Two Years a Syndicated Structured Pre-Export Finance Facility for up to USD 750 Million
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19th Mar 20217:07 amGNWAcron Group’s 2020 IFRS Revenue Up 4%
17th Mar 20219:54 amGNWNotice of 2020 IFRS Results
4th Mar 202111:08 amGNWNominees for Acron Board of Directors
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19th Oct 20209:02 amGNWAcron Group’s Mineral Fertiliser Output Up 3% in 9M 2020
28th Aug 20209:00 amGNWAcron Group Posts Q2 2020 IFRS Net Profit of USD 138 Million
25th Aug 20204:15 pmGNWNotice of H1 2020 IFRS Results
14th Aug 20209:14 amGNWDisclosure through the National Storage Mechanism
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