Last checked at 13 Apr 2016 13:00
OJSC PHOSAGRO - PhosAgro Fertilizer Production up 10% y-o-y in Q1 2016OJSC PHOSAGRO - PhosAgro Fertilizer Production up 10% y-o-y in Q1 2016
PR Newswire
London, April 13
| For Immediate Release | 13 April 2016 |
PhosAgro Fertilizer Production up 10% y-o-y in Q1 2016
Moscow one of the world vertically integrated phosphate-based fertilizer producers, announces its production results for the three months ended 31 March 2016.
Total fertilizer production and sales increased year-on-year in Q1 2016 by 10.2% and 8.2%, respectively. Production of phosphate-based fertilizers and feed phosphates for first quarter increased by 13.1% to 1.5 million tonnes, production of nitrogen-based fertilizers was stable at 0.4 million tonnes.
PhosAgrofor Q1 2016 are summarized in the tables below.
| Production volumes by type | |||
| (kmt) | Q1 2016 | Q1 2015 | Change y-o-y |
| Phosphate-based fertilizers and MCP | 1,519.2 | 1,342.7 | 13.1% |
| Nitrogen-based fertilizers | 394.4 | 394.0 | 0.1% |
| TOTAL fertilizers | 1,913.6 | 1,736.7 | 10.2% |
| Apatit mine and beneficiation plant | 2,356.8 | 2,224.6 | 5.9% |
| Other products** | 32.2 | 38.6 | (16.6%) |
| Sales volumes by type | |||
| (kmt) | Q1 2016 | Q1 2015 | Change y-o-y |
| Phosphate-based fertilizers and MCP | 1,406.9 | 1,285.4 | 9.5% |
| Nitrogen-based fertilizers | 429.8 | 412.5 | 4.2% |
| TOTAL fertilizers | 1,836.7 | 1,697.9 | 8.2% |
| Apatit mine and beneficiation plant* | 843.7 | 724.3 | 16.5% |
| Other products** | 45.8 | 51.7 | (11.4%) |
Commenting on the Q1 2016 operational results, PhosAgro CEO Andrey Guryev said:
, respectively. We are benefitting from the results of the modernisation and debottlenecking projects implemented in 2015, and continued business process optimisation this year has brought phosphate-based fertilizer production up by an impressive 13% year-on-year. This is particularly impressive given the market situation during Q1 2016.
declining to USD 360/tonne FOB Tampa equivalent. As a result, many phosphate-based fertilizer producers decided once again to curtail production in the first quarter, which is unusual, given that in normal market conditions during the first quarter we would see the season developing in mature markets like the United States and Europe. Over the past 2-3 years, we saw importers trying to build up fertilizer stocks while prices were low, but this has not happened yet in 2016. At the same time, demand will inevitably appear, I believe that as soon as later this month, and we will see much stronger volumes throughout summer.
: in Q1 2016 we significantly increased sales to half a million tonnes of fertilizers. Measures taken by the Russian Government have helped to increase the efficiency of agricultural production in Russia, which gives us reason to expect further production growth
Average DAP prices during the period declined to USD 370/tonne FOB Tampa. PhosAgro, unlike many other producers, compensated for this with a significant increase in sales volumes; at the same time, the average RUB/USD exchange rate during the period declined by 20% year-on-year to 74.64, compared to 62.19 in Q1 2015. These two factors will significantly compensate for the price weakness, and I look forward to reporting another strong set of financial results for the first quarter, with solid free cash flow generation providing a basis for the Board of Directors to potentially recommend a dividend payment for the first quarter after it reviews the financial results for the period.
we expect phosphate-based fertilizer consumption for the year to remain relatively stable, with more upside risk coming from Latin America interest rates for farmers are now subsidised, thus removing the main issue that affected demand in 2015 We believe that overall there is more upside risk in terms of P2O5 consumption, especially in complex fertilizers. At the same time, we have already seen a dramatic reduction in MAP/DAP exports from China of around 50% since the beginning of the year. All of these factors will be very supportive for prices going forward.
The table below provides a breakdown of production volumes by major product for Q1 2016:
| Production volumes | |||
| (kmt) | Q1 2016 | Q1 2015 | Change y-o-y |
| Apatit mine and beneficiation plant | |||
| Phosphate rock | 2,136.5 | 2,020.7 | 5.7% |
| Nepheline concentrate | 220.3 | 203.9 | 8.0% |
| Phosphate-based fertilizers and MCP | |||
| DAP/MAP | 746.1 | 703.1 | 6.1% |
| NPK | 474.9 | 442.3 | 7.4% |
| NPS | 146.6 | 65.2 | 124.8% |
| APP | 35.2 | 33.4 | 5.4% |
| MCP | 84.4 | 61.8 | 36.6% |
| PKS | 24.6 | 26.3 | (6.5%) |
| SOP | 7.4 | 10.6 | (30.2%) |
| Nitrogen-based fertilizers | |||
| AN | 129.9 | 126.5 | 2.7% |
| Urea | 264.5 | 267.5 | (1.1%) |
| Other products | |||
| AlF3 | 11.3 | 7.4 | 52.7% |
| STPP | 20.9 | 31.2 | (33.0%) |
| Feed stock | |||
| Ammonia | 297.9 | 307.7 | (3.2%) |
| Phosphoric acid (kt P2O5) | 587.7 | 525.5 | 11.8% |
| Sulphuric acid (kt monohydrate) | 1,285.4 | 1,181.9 | 8.8% |
The table below provides a breakdown of sales volumes by major product for Q1 2016:
| Sales volumes | |||
| (kmt) | Q1 2016 | Q1 2015 | Change y-o-y |
| Apatite mine and beneficiation plant | |||
| Phosphate rock* | 632.2 | 518.0 | 22.0% |
| Nepheline concentrate | 211.5 | 206.3 | 2.5% |
| Phosphate-based fertilizers and MCP | |||
| DAP/MAP | 726.5 | 697.2 | 4.2% |
| NPK | 437.8 | 429.6 | 1.9% |
| NPS | 105.2 | 41.8 | 151.7% |
| APP | 36.2 | 25.4 | 42.5% |
| MCP | 73.3 | 55.6 | 31.8% |
| PKS | 21.6 | 25.9 | (16.6%) |
| SOP | 6.3 | 9.9 | (36.4%) |
| Nitrogen-based fertilizers | |||
| AN | 189.0 | 179.6 | 5.2% |
| Urea | 240.8 | 232.9 | 3.4% |
| Other products | |||
| AlF3 | 11.6 | 7.3 | 58.9% |
| STPP | 24.7 | 19.4 | 27.3% |
| Ammonia | 1.1 | 1.5 | (26.7%) |
| Phosphoric acid | 5.8 | 12.6 | (54.0%) |
| Sulphuric acid | 2.6 | 10.9 | (76.1%) |
* Excluding intra-group sales
** Excluding feed stock
For further information please contact:OJSC PhosAgroIrina Evstigneeva, Head of Corporate Finance and Investor Relationsir@phosagro.ru+7 495 231 3115Timur Belov, Press OfficerAnastacia Basos, Deputy Press Secretary+7 495 232 9689EMSam VanDerlipvanderlip@em-comms.com+44 7554 993 032+7 499 918 3134Notes to Editors
PhosAgro is one of the leading global vertically integrated phosphate-based fertilizer producers. The Company focuses on the production of phosphate-based fertilizers, feed phosphate and high-grade phosphate rock (P2O5 content of not less than 39%), as well as ammonia and nitrogen-based fertilizers.
The Company is the largest phosphate-based fertilizer producer in Europe, the largest producer of high-grade phosphate rock worldwide and the third largest MAP/DAP producer in the world (excluding China), according to Fertecon. PhosAgro is also one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia.
PhosAgro has 2.1 billion tonnes of resources (according to JORC) of high quality apatite-nepheline ore. The Company's mines and phosphate rock production facilities are located in the mountainous areas of the Kola Peninsula in the Murmansk region of northwest Russia, whereas its fertilizer and feed phosphate production assets are located near the city of Cherepovets in the Vologda region and near the city of Balakovo in the Saratov region of southwest part of European Russia.
PhosAgro
For further information on PhosAgro please visit: www.PhosAgro.com