Phosagro S Regulatory News (PHOR)

For Immediate Release 20 November 2014 PhosAgro 9M 2014 EBITDA up 24% to RUB 25.8 bln Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR),one of the world's leading vertically integrated phosphate-based fertilizerproducers, today announces its reviewed condensed consolidated IFRS financialresults for the nine months ended 30 September 2014. PhosAgro earned an EBITDAfor the period of RUB 25.8 billion (USD 728 million), compared to RUB 20.8billion (USD 657 million) in 9M 2013. 9M 2014 Financial and Operational Highlights: Result 9M 2014 9M 2013 year-on-year change (RUB vs. RUB), % RUB USD RUB USD million millionRevenue 86,758 2,452 81,276 2,571 7%EBITDA* 25,750 728 20,758 657 24%EBITDA margin 30% 26% 4 p.p.Net profit 6,273 177 9,094 288 (31%)Earnings per share 46 1.30 64 2.02 (28%) Sales volumes Kmt KmtPhosphate-based 3,614.1 3,568.3 1%productsNitrogen-based 1,080.1 930.6 16%fertilizersApatit mine and 2,556.9 3,034.0 (16%)beneficiation plantOther products 173.7 143.8 21%RUB/USD rates: average 9M 2014: 35.3878; average 9M 2013: 31.6170 As of 30 September 2014: 39.3866; as of 31 December 2013: 32.7292 *EBITDA is calculated as operating profit adjusted for depreciation andamortisation. Other 9M 2014 Highlights Interim dividend recommendation: - At its meeting on 18 November 2014, PhosAgro's Board of Directorsrecommended that shareholders approve an interim dividend of RUB 2,590 millionfor the first nine months of 2014, which represents RUB 20 per share (RUB 6.7per global depositary receipt). The Board has called an EGM to vote on thedividend recommendation for 31 December 2014. Production, sales and logistics flexibility: - During the first nine months of 2014, PhosAgro's revenue andsales volumes benefited from the Company's strategy of enhancing productionflexibility, combined with strong global demand: total fertilizer productionand sales volumes grew year-on-year by 6% and 4%, respectively. Revenue in 9M2014 was 7% higher year-on-year, supported by year-on-year increases of over11% and 3% in average realised prices for export DAP/MAP and NPK,respectively. Strategic developments: - In January 2014, the Group signed a USD 440.6 million loanagreement with the Japan Bank for International Cooperation (JBIC) and a groupof banks consisting of Bank of Tokyo-Mitsubishi (BTMU), Citibank Japan andMizuho Bank. The proceeds from the loan are being used to fund construction ofa new 760 ths tonnes/year ammonia plant at PhosAgro-Cherepovets. - In line with its strategy to develop downstream productioncapacity and expand its product portfolio, in August PhosAgro signed acontract with Chemoproject Nitrogen a.s. for design engineering andprocurement of equipment for the construction of a 500 ths tonnes/yeargranulated urea production unit at PhosAgro-Cherepovets. Total investments inthe construction of the new urea unit and production infrastructure areestimated at RUB 7.8 billion. Consolidation of ownership in production facilities and business development: - During the first nine months of 2014, the holders of 10.39% ofall issued shares in OJSC PhosAgro-Cherepovets accepted PhosAgro's voluntarytender offer. PhosAgro completed the acquisition of these shares in 2Q 2014.Following completion of the voluntary tender offer, PhosAgro sent a compulsoryshare purchase notification (squeeze out) for the buyout of the ordinaryshares belonging to the remaining minority shareholders (2.01%) of OJSCPhosAgro-Cherepovets. Revenue for the period increased by 7% year-on-year to RUB 86.8 billion (USD2,452 million), compared to RUB 81.3 billion (USD 2,571 million) for 9M 2013.Favourable market conditions led to higher prices year-on-year for mostPhosAgro products. Cost savings in cost of sales (a more detailed discussionis provided in the analysis below) also contributed to PhosAgro's strongoperating profit result for 9M 2014: operating profit for the period was RUB19.7 billion (USD 558 million), up 32% from RUB 15.0 billion (USD 474 million)in 9M 2013. EBITDA was RUB 25.8 billion (USD 728 million) in 9M 2014, 24%higher year-on-year. EBITDA margin increased to 30% for 9M 2014 compared to26% in 9M 2013. Significant RUB depreciation resulted in a foreign exchange loss of RUB 9,471million (USD 268 million), which impacted PhosAgro's bottom line in 9M 2014.The Company's 9M 2014 net profit was RUB 6.3 billion (USD 177 million), adecrease of 31% year-on-year from RUB 9.1 billion (USD 288 million) in 9M2013. Basic and diluted earnings per share came to RUB 46 (USD 1.30) for 9M2014, compared to RUB 64 (USD 2.02) in 9M 2013. Cash flows from operating activities increased by 35% and amounted to RUB 21.5billion (USD 606 million) in 9M 2014, compared to RUB 15.9 billion (USD 502million) in 9M 2013. Gross debt at 30 September 2014 amounted to RUB 73.3 billion (USD 1,861million), compared to RUB 52.8 billion (USD 1,612 million) at 31 December2013. Net debt at 30 September 2014 stood at RUB 52.7 billion (USD 1,339million), up from RUB 43.8 billion (USD 1,339 million) at 31 December 2013.Most of the Company's debt is denominated in USD as a natural hedge againstprimarily USD-denominated sales. The depreciation of the Russian roubleagainst the US dollar was the primary reason for the increase of PhosAgro'snet debt in RUB terms. The Company's net debt to annualised EBITDA ratiodecreased to 1.5 as of 30 September 2014, from 1.8 as of 31 December 2013. Commenting on the 9M 2014 results, PhosAgro Management Board Chairman and CEOAndrey Guryev said: "The favourable market conditions, supported by supply-demand fundamentals anda strong pricing environment, have improved PhosAgro's margins back to what weconsider to be normal levels, with gross profit margin close to 42% and asolid EBITDA margin of 30%. Healthy global demand for phosphate-basedfertilizers has pushed DAP prices to USD 500 per tonne FOB Tampa and higher in3Q 2014. The average DAP FOB Tampa price for the first nine months of 2014 wasup 2% year-on-year to USD 475, compared to an average of USD 466 last year.While current DAP prices have softened to around USD 455 FOB Tampa as a resultof the seasonal slowdown, they are still about USD 100 per tonne higher thanthey were at this time last year. "Our cost-cutting initiatives also contributed to PhosAgro's improvedfinancial results, and the recent substantial RUB devaluation has furtherstrengthened our cost advantage. We also continued to operate at close to 100%utilization thanks to our excellent production flexibility. "In addition to delivering strong financial results, I am pleased to reportthat we have completed the buyout of the remaining minority shareholders inPhosAgro-Cherepovets, with only minor technical procedures outstanding. Thismeans we have successfully completed our three-year effort to consolidate 100%ownership in all of our main production subsidiaries." 9M 2014 Market Conditions - Supply constraints in Morocco, the United States, Saudi Arabiaand Russia decreased spot supplies of DAP/MAP by 600-700 ktonnes in 1Q 2014.Combined with early demand from Latin America and Europe following very weakvolumes in 4Q 2013, this led to a sharp recovery in DAP/MAP prices in January2014, followed by a further seasonal recovery up to USD 500 per tonne (FOBTampa) in February-March 2014. - Prices softened back to USD 450-460 per tonne FOB Tampa inApril-May as a result of the increased supply of lower-grade phosphate-basedfertilizers from China and softer-than-expected demand from India. - Development of seasonal demand in Brazil in conjunction with asummer programme of purchases in the US market contributed to higher pricesfor DAP/MAP in July and August above USD 500 per tonne FOB Tampa, despitecontinued weakness in the Indian market and increased Chinese exports. - The average DAP price in the third quarter of 2014 was USD 498per tonne FOB Tampa, against USD 428 per tonne FOB Tampa in 3Q 2013. Theaverage price for nine months increased from USD 466 per tonne FOB Tampa in2013 up to USD 475 per tonne FOB Tampa in 2014. - Phosphoric acid prices for Indian DAP producers have increasedthree times during 9M 2014, from USD 615 per tonne of P2O5 at the end of 2013to USD 681 per tonne of P2O5 in 1Q 2014, then to USD 715 per tonne in 2Q andUSD 765 per tonne of P2O, CFR. At current prices for phosphoric acid andammonia (over USD 600 per tonne CFR), the cash costs for domestic DAPproduction in India is estimated at above USD 540 per tonne. - The increase in demand and prices for phosphoric acid andfertilizers caused the price of phosphate rock to rise on average by USD 10per tonne by the end of the third quarter to USD 110-140 per tonne FOB Morocco(32% P2O5), compared to USD 90-140 per tonne FOB at the beginning of thequarter. - Strong demand from India and Latin America against the backdropof limited exports from Ukraine and North Africa helped the recovery of ureaprices in the 3rd quarter of 2014 to USD 318 per tonne FOB Baltic, versus USD294 per tonne FOB Baltic in the 2nd quarter of 2014 and USD 295 per tonne FOBBaltic in the 3rd quarter of 2013. Phosphate-Based Products Segment Result 9M 2014 9M 2013 year-on-year RUB mln RUB mln change, %Revenue 74,233 70,926 5%Cost of goods sold (44,222) (46,312) (5%)Gross profit 30,011 24,614 22% Phosphate-based products segment revenue increased by 5% year-on-year andtotalled RUB 74,233 million (USD 2,098 million) in 9M 2014. PhosAgro increasedproduction of phosphate-based fertilizers and MCP by 3.8% year-on-year in 9M2014, while sales volumes increased by 1.1% year-on-year. Production and salesvolumes for phosphate rock and nepheline concentrate decreased in 9M 2014compared to 9M 2013 by 3.2% and 15.7%, respectively. The increase in sales volumes was primarily due to favourable marketconditions and higher demand, which enabled the Company to increasesubstantially the sales of both concentrated fertilizers and NPKs to LatinAmerica and Russia. - MAP/DAP fertilizers: MAP exports increased by 54% year-on-year,with price increases in RUB terms of 10%. This was offset by a 48% decrease inDAP exports. Domestic MAP sales increased by 37% year-on-year. Revenue fromDAP/MAP sales increased by 16% year-on-year, from RUB 25,399 million (USD 803million) in 9M 2013 to RUB 29,464 million (USD 833 million) in 9M 2014,representing an overall 5% year-on-year increase in sales volumes and 10%increase in DAP/MAP average revenue per tonne denominated in roubles. - NPK fertilizers: Domestic NPK sales volumes increased by 36%year-on-year, which partially compensated for weaker domestic NPK pricesduring 9M 2014. As a result, revenue from domestic NPK sales increased by 32%year-on-year, from RUB 6,509 million (USD 206 million) in 9M 2013 to RUB 8,578million (USD 242 million) in 9M 2014. Revenue from NPK export sales decreasedby 10% year-on-year, from RUB 10,200 million (USD 323 million) in 9M 2013 toRUB 9,185 million (USD 260 million) in 9M 2014, as a result of a 13%year-on-year decline in NPK export sales volumes, which was partiallycompensated by a 3% increase in revenue per tonne denominated in roubles. - Phosphate rock: Total sales of phosphate rock decreased by 20%year-on-year to RUB 10,828 million (USD 306 million) in 9M 2014 due to higherinternal consumption of phosphate rock by PhosAgro production sites and lowerphosphate rock production volumes as a result of the optimisation of miningoperations. The phosphate-based products segment's gross profit for 9M 2014 increased by22% year-on-year to RUB 30,011 million (USD 848 million), resulting in a grossprofit margin of 40%, compared to a 35% margin in 9M 2013, which was theresult of higher sales combined with cost savings (a more detailed discussionis provided in the CoGS analysis below). Revenue per tonne for the principal phosphate-based products Product 9M 2014 9M 2013 year-on-year RUB RUB change, %Domestic:MAP 16,854 15,589 8.1%DAP 15,712 15,068 4.3%NPK 13,671 14,149 (3.4%)NPS 10,605 11,438 (7.3%)MCP 20,562 19,952 3.1%PKS 10,581 - -SOP 24,274 19,890 22.0%STPP 30,937 30,209 2.4% Export:MAP 16,904 15,329 10.3%DAP 16,558 15,040 10.1%NPK 12,789 12,363 3.4%NPS 10,948 10,487 4.4%MCP 19,709 17,520 12.5%PKS 11,234 - -SOP 25,382 16,727 51.7%STPP 34,222 29,193 17.2% Nitrogen Segment Result 9M 2014 9M 2013 year-on-year RUB mln RUB mln change, %Revenue 12,018 9,802 23%Inter-segment transfers 8 95 (92%)Cost of goods sold (7,297) (7,171) 2%Gross profit 4,729 2,726 73% Nitrogen segment revenue increased by 23% year-on-year to RUB 12,018 million(USD 340 million) in 9M 2014 from RUB 9,802 million (USD 310 million) in 9M2013. Production and sales volumes of nitrogen-based fertilizers increased by12% and 16% year-on-year, respectively, in 9M 2014. Export revenue from urea increased by 24% year-on-year from RUB 6,681 million(USD 211 million) in 9M 2013 to RUB 8,271 million (USD 234 million) in 9M2014, in line with the 22% increase in sales volumes. Ammonium nitrate (AN)sales volumes decreased by 5% year-on-year, which, combined with a 2% decreasein revenue per tonne, was the major factor behind the 7% decline in revenuefrom AN sales from RUB 1,941 million (USD 61 million) in 9M 2013 to RUB 1,799million (USD 51 million) in 9M 2014. Nitrogen segment gross profit during 9M 2014 increased by 73% year-on-year toRUB 4,729 million (USD 134 million), as a result of the significant revenuegrowth and minimal cost inflation, resulting in a gross profit margin of 39%,compared to 28% in 9M 2013. Revenue per tonne for the principal nitrogen-based fertilizers Product 9M 2014 9M 2013 year-on-year RUB RUB change, %Domestic:Ammonium nitrate 9,607 9,852 (2.5%)Urea 11,083 12,959 (14.5%) Export:Ammonium nitrate - 9,591 -Urea 11,014 10,868 1.3%NP 10,664 9,121 16.9% Cost of Sales Item 9M 2014 9M 2013 Change y-on-y % of % of % RUB USD cost of RUB USD cost of RUB mln mln sales mln mln sales mlnMaterials andservices 16,986 480 34% 15,190 481 29% 1,796 12%Salaries andsocialcontributions 7,264 205 14% 9,271 293 18% (2,007) (22%)Natural gas 5,545 157 11% 4,353 138 8% 1,192 27%Depreciation 5,482 155 11% 5,322 168 10% 160 3%Potash 3,036 86 6% 3,416 108 7% (380) (11%)Sulphur andsulphuric acid 3,035 86 6% 2,812 89 6% 223 8%Electricity 2,674 76 5% 2,574 81 5% 100 4%Ammonia 2,209 62 4% 3,687 117 7% (1,478) (40%)Fuel 2,126 60 4% 3,284 104 6% (1,158) (35%)Heating energy 919 26 2% 292 9 1% 627 215%Ammoniumsulphate 491 14 1% 892 28 2% (401) (45%)Other items 14 - - 47 2 - (33) (70%)Change in stockof WIP andfinished goods 870 24 2% 608 19 1% 262 43%Total 50,651 1,431 100% 51,748 1,637 100% (1,097) (2%) PhosAgro's cost of sales decreased by 2% year-on-year in 9M 2014, to RUB50,651 million (USD 1,431 million), while overall fertilizers sales volumesincreased by 4%. Such changes in cost of sales were primarily due to thefollowing factors: - An increase of RUB 1,796 million (USD 51 million), or 12%,year-on-year in the cost of materials and services due to price inflation of6% (PPI 9M 2014 vs 9M 2013) and outsourcing of certain functions, compensatedby a significant decrease in personnel costs. - A 22%, or RUB 2,007 million (USD 57 million), year-on-yeardecrease in personnel costs as a result of the staff optimisation programme. - A year-on-year decrease in expenditure on purchased ammonia ofRUB 1,478 million (USD 42 million), or 40%, from RUB 3,687 million (USD 117million) in 9M 2013 to RUB 2,209 million (USD 62 million) in 9M 2014. This wasdue to year-on-year declines in purchase volumes by 30% and prices by 15%.PhosAgro was able to decrease purchases from third parties after themodernisation of ammonia production facilities in Cherepovets, which helped toincrease production of ammonia by 142 ths tonnes, or by 19% in 9M 2014. - A year-on-year increase in expenditure on natural gas of RUB1,192 million (USD 34 million), or 27%, to RUB 5,545 million (USD 157 million)in 9M 2014. Natural gas is required primarily for the production of ammonia.The price per cubic metre of natural gas rose by 12%, while natural gasconsumption increased by 14% year-on-year. The price increase was due to a 15%tariff increase in the second half of 2013. The 14% growth in volumes of gaspurchased was due to an 18% year-on-year increase in ammonia production as aresult of higher production capacity following completion of modernisations in3Q 2013. - A year-on-year decrease in expenditure on potash by 11%, or RUB380 million (USD 11 million), to RUB 3,036 million (USD 86 million) in 9M2014. This was mainly due to a 25% decrease in potash purchase prices, whichwas partially balanced by an 18% increase in potash purchase volumes as aresult of an 8% year-on-year increase in NPK production. - A year-on-year decrease in expenditure on fuel by RUB 1,158million (USD 33 million), or 35%, from RUB 3,284 million (USD 104 million) in9M 2013 to RUB 2,126 million (USD 60 million) in 9M 2014, which was in linewith a 37% decrease in fuel consumption as a result of the replacement ofheating oil purchases with direct purchases of heating energy, as well asdecreased open-pit mining. - The decline in production of NPS/NPK grades with a high nitrogencontent led to a decrease in purchases of ammonium sulphate by RUB 401 million(USD 11 million), or 45%, year-on-year. - Heating energy expenses increased by RUB 627 million (USD 18million) year-on-year, from RUB 292 million (USD 9 million) in 9M 2013 to RUB919 million (USD 26 million) in 9M 2014, as a result of the replacement ofheating oil, which is consumed in boilers generating heating energy at Apatit,with direct purchases of heating energy, providing significant savings onfuel. - An increase in expenditure on sulphur and sulphuric acid by RUB223 million (USD 6 million), or 8%, year-on-year from RUB 2,812 million (USD89 million) in 9M 2013 to RUB 3,035 million (USD 86 million) in 9M 2014. Thiswas driven by a 6% increase in volumes consumed due to higher production ofphosphate-based fertilizers and feed phosphates, and by a 2% increase inpurchase prices. Administrative expenses rose by 5% year-on-year to RUB 6,039 million (USD 171million) in 9M 2014, primarily due to an increase in payroll expenses asresult of the implementation of the new management KPI incentive system thatlinks overall Company performance with semi-annual bonus payments (previouslyannual bonus payments were made once a year), and expenses for professionalservices. Selling expenses rose by 30% year-on-year, from RUB 5,964 million (USD 189million) in 9M 2013 to RUB 7,767 million (USD 219 million) in 9M 2014. Thiswas primarily due to the following changes from 9M 2013 to 9M 2014: - A 9% increase in the Russian Railways infrastructure tariff andoperators' fees from RUB 3,209 million (USD 101 million) to RUB 3,496 million(USD 99 million). An increase in container shipments, combined with a 27%increase in domestic fertiliser sales (largely shipped on a CPT basis), led tohigher use of rail freight transport. - An 83% increase in port and stevedoring expenses due tosignificantly increased CFR sales vs. FOB in 9M 2014 compared to 9M 2013. PhosAgro's foreign exchange loss increased by 276% year-on-year, from RUB2,517 million (USD 80 million) in 9M 2013 to RUB 9,471 million (USD 268million) in 9M 2014 as a result of significant RUB depreciation during 9M 2014by 20% (from RUB 32.7292 at 31/12/2013 to RUB 39.3866 at 30/09/2014), comparedto just 6% during 9M 2013 (from RUB 30.3727 at 31/12/2012 to RUB 32.3451 at30/09/2013). Over RUB 9 billion of that loss represents an unrealized exchangeloss on outstanding long-term USD denominated debt. Cash spent on capex in 9M 2014 amounted to RUB 11,981 million (USD 339million), decreasing by 8% in comparison with RUB 13,086 million (USD 414million) spent in 9M 2013. PhosAgro's capital expenditure, which consists ofadditions to property, plant and equipment, amounted to RUB 12,132 million(USD 343 million) for 9M 2014, compared to RUB 12,150 million (USD 384million) in 9M 2013. Capital expenditure focused on construction of the mainore shaft № 2 at the Kirovsky underground mine, the new 760 ths tonnes/yearammonia plant at PhosAgro-Cherepovets as well as the construction of newstorage facilities for liquid ammonia at Balakovo. Outlook Market: - DAP prices have recently softened to USD 455 per tonne FOB Tampa,reflecting the typical seasonal slowdown. - However, feedstock prices increased significantly, driving thecash costs of most significant players up: spot sulphur CFR prices in mostregions are above USD 150 per tonne, while ammonia in the US has peaked at USD655 per tonne CFR Tampa and is close to the same level in Morocco. This hasled major producers to announce curtailment of DAP production. Decreasedproduction of DAP/MAP in the US and in Morocco, together with the increase inexport taxes in China (up to 15% until the end of the year) should supportprices in the short term. - Low imports by India in 1H 2014 have depleted local fertilizerstocks and the market is showing increased activity. Increased demand fromIndia, combined with approaching seasonal demand in Europe, the US domesticmarket, Central and South America will contribute to higher prices forphosphate-based and nitrogen-based fertilizers going into the first quarter of2015. - Agricultural commodities performance could be a limiting factorfor further fertilizer price increases. At the same time, high yields of cornand soybeans have depleted nutrients in the soil, requiring increasedapplication. Company: - PhosAgro's low cash cost position and flexible production makethe Company well placed to respond to changes in global demand forconcentrated or complex fertilizers and NPS. The Company intends to investfurther into both increasing capacity and expanding the number of NPK gradesit produces. - Dramatic RUB depreciation from the middle of September 2014 hasled to a further significant decrease in the Company's production cash costs,although going into 2015 it may result in higher RUB costs inflation. - Following completion of the voluntary tender offer, PhosAgro senta compulsory share purchase notification (squeeze out) to OJSCPhosAgro-Cherepovets for the buyout of the ordinary shares belonging to theremaining minority shareholders (2.01%) of OJSC PhosAgro-Cherepovets. Allprocedures related to the squeeze out are almost completed. - All major development projects are on track, including the newammonia plant designed to increase cost efficiency and support furtherexpansion of complex fertilizer production capacity. - PhosAgro continued its restructuring process in May with themerger of two production subsidiaries, OJSC Apatit and CJSC Balakovo MineralFertilizers, which will enhance further cost efficiency. Conference call and webcast On 20 November 2014, PhosAgro will hold a conference call and webcast at 13.30London time (16:30 Moscow; 08:30 New York). The call will be held in English, with simultaneous translation into Russianon a separate line. Webcast links: English: http://engage.vevent.com/rt/webcasting/index.jsp?seid=238Russian: http://engage.vevent.com/rt/webcasting/index.jsp?seid=242 Participants Dial-in numbers: RussiaLocal: +7 499 677 1050FreeCall: 8 10 800 2409 2044 UKLocal: +44 844 871 9382FreeCall: 0800 694 5723 USALocal: +1 646 741 2122FreeCall: 1 866 434 1115 Conference ID numbers: English call: 38104474Russian call: 38140054 For further information please contact: OJSC PhosAgroIrina Evstigneeva, Head of Corporate Finance and Investor Relationsir@phosagro.ru+7 495 231 3115 Timur Belov, Press Officer+7 495 232 9689 EMSam VanDerlipvanderlip@em-comms.com+44 7554 993 032+7 499 918 3134 Notes to Editors PhosAgro is one of the leading global vertically integrated phosphate-basedfertilizer producers. The Company focuses on the production of phosphate-basedfertilizers, feed phosphate and high-grade phosphate rock (P2O5 content of notless than 39%), as well as ammonia and nitrogen-based fertilizers. The Company is the largest phosphate-based fertilizer producer in Europe, thelargest producer of high-grade phosphate rock worldwide and the second largestMAP/DAP producer in the world (excluding China), according to Fertecon.PhosAgro is also one of the leading producers of feed phosphates (MCP) inEurope, and the only producer in Russia. PhosAgro has 2.1 billion tonnes of resources (according to JORC) of highquality apatite-nepheline ore. The Company's mines and phosphate rockproduction facilities are located in the mountainous areas of the KolaPeninsula in the Murmansk region of northwest Russia, whereas its fertilizerand feed phosphate production assets are located near the city of Cherepovetsin the Vologda region and near the city of Balakovo in the Saratov region ofsouthwest part of European Russia. PhosAgro's 2013 IFRS revenue was over USD 3.3 bln and EBITDA was USD 752 mln.The Сompany's net debt/EBITDA ratio was 1.8 at 31 December 2013. For further information on PhosAgro please visit: www.PhosAgro.com Nine months ended Three months ended 30 September 30 September 2014 2013* 2014 2013* RUB RUB RUB RUB Million Million Million MillionContinuing operationsRevenues 86,758 81,276 30,056 27,561Cost of sales (50,651) (51,748) (17,118) (17,605)Gross profit 36,107 29,528 12,938 9,956 Administrative expenses (6,039) (5,768) (2,084) (1,929)Selling expenses (7,767) (5,964) (2,344) (1,982)Taxes, other than income tax (1,540) (1,657) (544) (575)Other expenses, net (1,025) (1,157) (435) (534)Operating profit 19,736 14,982 7,531 4,936 Finance income 647 831 342 332Finance costs (2,661) (1,661) (1,601) (511)Foreign exchange (loss)/gain (9,471) (2,517) (8,381) 242Share of profit/(loss) ofassociates 91 (87) 20 (269)Restructuring costs (59) (861) (13) (419)Profit/(loss) before tax 8,283 10,687 (2,102) 4,311 Income tax (expense)/benefit (2,010) (1,863) 278 26Profit/(loss) from continuingoperations 6,273 8,824 (1,824) 4,337 Discontinued operationsProfit/(loss) from discontinuedoperations, net of tax - 270 - (13)Profit/(loss) for the period 6,273 9,094 (1,824) 4,324 Attributable to:Non-controlling interests ^ 257 915 (7) 364Shareholders of the Parent 6,016 8,179 (1,817) 3,960 Other comprehensive incomeActuarial gains and losses, netof tax (84) (132) (8) (64)Foreign currency translationdifference 1,546 186 1,373 44Other comprehensive income forthe period 1,462 54 1,365 (20)Total comprehensive income forthe period 7,735 9,148 (459) 4,304 Attributable to:Non-controlling interests ^ 256 903 (7) 358Shareholders of the Parent 7,479 8,245 (452) 3,946Basic and dilutedearnings/(loss) per share (inRUB) 46 64 (14) 31 30 September 2014 31 December 2013 RUB million RUB millionAssetsProperty, plant and equipment 81,824 75,928Intangible assets 494 623Investments in associates 10,057 8,485Deferred tax assets 2,259 1,806Other non-current assets 4,832 4,383Non-current assets 99,466 91,225 Other current investments 1,938 1,585Derivative financial assets - 79Inventories 11,153 12,293Current income tax receivable 1,471 668Trade and other receivables 12,059 11,464Cash and cash equivalents 20,585 8,938Current assets 47,206 35,027Total assets 146,672 126,252 EquityShare capital 372 372Share premium 7,494 7,494Retained earnings 45,557 48,556Other reserves 1,347 (116)Equity attributable to shareholders of the Parent 54,770 56,306Equity attributable to non-controlling interests 541 3,020Total equity 55,311 59,326 LiabilitiesLoans and borrowings 59,756 39,550Defined benefit obligations 1,029 971Deferred tax liabilities 3,453 3,304Non-current liabilities 64,238 43,825 Trade and other payables 11,830 9,377Current income tax payable 703 518Loans and borrowings 13,556 13,206Derivative financial liabilities 1,034 -Current liabilities 27,123 23,101Total equity and liabilities 146,672 126,252 Nine months ended 30 September 2014 2013 RUB million RUB millionCash flows from operating activitiesProfit before tax from continuing operations 8,283 10,687Adjustments for:Depreciation and amortisation 6,014 5,776Loss on disposal of fixed assets 177 188Finance income (647) (831)Finance costs 2,661 1,661Share of (profit)/loss of associates (91) 87Foreign exchange loss 9,078 3,039Operating profit before changes in working capital and provisions 25,475 20,607Decrease in inventories 1,275 640Decrease in trade and other receivables (55) 1,111Decrease in trade and other payables (735) (2,498)Cash flows from operations before income taxes and interest paid 25,960 19,860Income tax paid (2,925) (2,643)Finance costs paid (1,584) (1,352)Cash flows from operating activities 21,451 15,865 Cash flows from investing activitiesLoans (issued)/repaid, net (480) 505Acquisition of intangible assets (55) (77)Acquisition of property, plant and equipment (11,981) (13,086)Proceeds from disposal of property, plant and equipment 227 241Disposal/(acquisition) of investments, net 254 (258)Finance income received 524 775Cash of Phosint Trading Ltd and PhosAgro Asia Pte Ltd acquired - 1,143Cash paid for CJSC "Nordic Rus Holding" - (1,680)Proceeds from disposal of CJSC "Pikalevskaya soda" and part ofmanufacturing facilities within CJSC "Metachem" - 599Cash flows used in investing activities (11,511) (11,838) Cash flows from financing activitiesProceeds from issuance of additional shares - 6,407Proceeds from borrowings 31,370 31,582Repayment of borrowings (20,955) (24,656)Acquisition of non-controlling interests (5,958) (11,674)Tax on intra-group dividends (247) -Dividends paid to non-controlling interests - (5)Dividends paid to shareholders of the Parent (2,667) (5,488)Finance leases paid (722) (1,183)Cash flows from/(used in) financing activities 821 (5,017)Net increase/(decrease) in cash and cash equivalents 10,761 (990)Cash and cash equivalents at 1 January 8,938 9,664Effect of exchange rates fluctuations 886 130Cash and cash equivalents at 30 September 20,585 8,804