Phosagro S Regulatory News (PHOR)

For Immediate Release 19 August 2014 PhosAgro CEO reports to Board of Directors on results of first year in thepost; Board recommends interim dividend Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR),one of the world's leading vertically integrated phosphate-based fertilizerproducers, announces that its Board of Directors at its meeting today reviewedthe Company's interim consolidated IFRS financial statements for 6M 2014, andrecommended an interim dividend for the period of RUB 3,237.5 mln, whichrepresents RUB 25 per share (RUB 8.3 per global depositary receipt ("GDR")). The Board has called an EGM to vote on the dividend recommendation for 16September 2014. The recommended dividend record date is 29 September 2014. Andrey Guryev, who reported to the Board on the results of his first year asthe Company's CEO, said: "We have successfully navigated a challenging periodfor the fertilizer market and achieved impressive results. Our share-priceperformance indicates that our investors approve. We have continued to paydividends in line with the promises we have made to investors, while alsoimplementing our strategic investment programme to further strengthen ourposition as a leading global producer of phosphate-based fertilizers with thelowest finished product cash costs in our industry. We have also continued toexpand our product line and geography of sales, including by increasing salesto premium markets. "We are in the final stages of completing the consolidation of ownership of ourproduction subsidiaries, and are working hard to become a leader in ourenvironmental practices, which is a key to our long-term sustainabledevelopment. "Over the last 12 months we have seen our GDRs increase by 26.6% despite thechallenging market conditions. Year-to-date, PhosAgro's GDRs have risen by27.5% - outperforming nearly all Russian companies listed on the London StockExchange. "I believe that this performance shows that investors endorse the strategy weare pursuing and believe in the management team, and I am confident that wewill continue to build shareholder value in the future. We plan to focus onfurther enhancements to efficiency and controlling costs. "This Thursday, 21 August 2014, we will disclose PhosAgro's 6M 2014 IFRSfinancial results, which I believe will further underscore our successfulperformance." Some of the highlights of Andrey Guryev's report on the results of the last 12months since his appointment as PhosAgro's CEO included: PhosAgro has developed a new strategy to 2020, which was approved by the Boardand will be presented to investors in the near future. In addition tostrengthening the Company's market position and increasing shareholder value,the strategy aims to achieve industry-leading efficiency levels in areasincluding labour productivity, production and sales, as well as sustainability. As part of the Company's strategy to modernize and expand its productioncapacity, PhosAgro has launched a comprehensive investment project to build anew high-tech ammonia plant with capacity of 760 thousand tonnes per year, aswell as additional capacity to process ammonia into finished fertilizerproducts. This is a high-priority project for PhosAgro, and the mostcapital-intensive of the Company's projects currently underway. By 2017, itwill allow the company to increase fertilizer production by a quarter. A majorproject to expand production capacity at the Kirov mine is also underway. Another strategic priority for PhosAgro is to increase its production and salesflexibility. In the last 12 months the Company has increased the fertilizergrades it produces by one third from 19 to 25, including grades containingmicroelements and niche grades of NPK fertilizers with colour and scentadditives. The number of NPK/NPKS/NPS/PKS grades offered has increased 1.5-foldto 18 during the past 12 months. The main focus has been on new grades to meetdemand from Russia and developing markets in South-East Asia, Africa and LatinAmerica, as well as the premium Western European market. PhosAgro's productportfolio now includes a full line of phosphate-based fertilizers, feedphosphates and technical phosphates. The Company has increased its total production volume of fertilizers and feedphosphates to over 6 million tonnes per year. Despite market volatility duringthe last 12 months, PhosAgro's plants have operated at nearly 100% capacity. The Company's sales geography has expanded from 88 countries in August 2013 to100 countries today, which helps PhosAgro to reduce the influence ofseasonality, as well as to sell to those markets that offer the best netbackprice. During the past 12 months, PhosAgro has strengthened its position on itsdomestic market, which is a priority for the Company. PhosAgro has one of thelargest retail distribution networks in Russia, and became the largest supplierof fertilizers to the domestic market in 6M 2014, producing one in every fourtonnes of fertilizers used by Russian farmers. Fertilizer sales to Russia andthe CIS in 6M 2014 increased by 9% year-on-year. Overall sales of fertilizers and other finished products increased by 4%year-on-year in 6M 2014. The Company grew sales to premium markets like Russia,Europe and South America, which accounted for 79% of sales, while effectivelyhalting sales to India, thereby reducing its dependency on the market that setsthe price floor for the rest of the world. In addition to delivering on its investment programme and executing otherstrategic initiatives to grow shareholder value, PhosAgro continued to maintainits approved dividend policy. Shareholders of PhosAgro received interim andfinal dividends for 2013. Since the Company's IPO more than RUB 22.076 billionhas been paid out as dividends, including over RUB 4.500 billion during 2013. PhosAgro's clearly defined development strategy, which is easy for investorsand lenders to understand, enables the company to maintain a successful debtfinancing policy. In early 2014, the Company signed a 13-year direct creditagreement with JBIC for a total amount of USD 440.6 million, with a guaranteefrom NEXI. The average rate on the agreement was significantly lower than theCompany's Eurobonds issued in 2013. "Our results, our plans and their implementation testify that we arecontinually moving and growing in the right direction," Andrey Guryev said inconclusion. For further information please contact: OJSC PhosAgroIrina Evstigneeva, Head of Corporate Finance and Investor Relationsir@phosagro.ru+7 495 231 3115Timur Belov, Press Officer+7 495 232 9689 EMSam VanDerlipvanderlip@em-comms.com+44 7554 993 032+7 916 306 6112 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.

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