Phosagro S Regulatory News (PHOR)

For Immediate Release 29 April 2015 PhosAgro FY 2014 EBITDA up 57% to RUB 37.6 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 audited consolidated IFRS financial results forthe 12 months ended 31 December 2014. PhosAgro's revenue for the periodincreased 18% to RUB 123.1 billion, while EBITDA grew by 57% to RUB 37.6billion (USD 979 million), compared to RUB 23.9 billion (USD 752 million) in2013. 2014 Financial and operational highlights: Result 2014 2013 year-on-year change (RUB vs. RUB), % RUB USD RUB USD million millionRevenue 123,124 3,205 104,566 3,283 18%EBITDA* 37,609 979 23,934 752 57%EBITDA margin 31% 23%Net (loss)/profit (13,395) (349) 8,576 269 -Adjusted net profit** 18,114 471 9,659 303 88%(Loss)/earnings per (105) (3) 60 2 -share Sales volumesPhosphate-based 4,836.5 4,793.8 1%productsNitrogen-based 1,384.5 1,262.2 10%fertilizersApatit mine and 3,328.8 3,912.0 (15%)beneficiation plantOther products 220.6 191.3 15%RUB/USD rates: average 2014: 38.4217; average 2013: 31.8480 as of 31 December 2014: 56.2584; as of 31 December 2013: 32.7292 *EBITDA is calculated as operating profit adjusted for depreciationand amortisation. **Adjusted net profit is calculated as net profit adjusted forunrealised foreign exchange loss. Other highlights Annual dividend recommendation: - At its meeting on 28 April 2015, PhosAgro's Board of Directors recommendedthat shareholders approve a final dividend of RUB 1,943 million for 2014,which represents RUB 15 per share (RUB 5.0 per global depositary receipt).Shareholders will vote on the dividend recommendation at the Annual GeneralMeeting of Shareholders on 8 June 2015. Production, sales and logistics flexibility: - During 2014, PhosAgro's revenue and sales volumes benefited fromthe Company's strategy of enhancing production flexibility, combined withstrong global demand: total fertilizer production and sales volumes grewyear-on-year by 4% and 3%, respectively. Revenue in 2014 was 18% higheryear-on-year, supported by year-on-year increases of over 27% and 17% inaverage 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 2014, 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 11 billion (based on current RUB/EUR exchange rates). Consolidation of ownership in production facilities and business development: - PhosAgro completed its strategic goal of consolidating 100%ownership in all key production subsidiaries after successfully executing acompulsory share purchase offer and a subsequent squeeze out for shareholdersof PhosAgro-Cherepovets, which was completed in October. An improved pricing environment combined with significant Rouble depreciation,especially in 4Q 2014, supported revenue growth of 18% year-on-year to RUB123.1 billion (USD 3,205 million), compared to RUB 104.6 billion (USD 3,283million) for 2013. Operating profit for the period was RUB 29.6 billion (USD770 million), up 83% from RUB 16.1 billion (USD 507 million) in 2013. EBITDAwas RUB 37.6 billion (USD 979 million) in 2014, 57% higher year-on-year.EBITDA margin increased to 31% for 2014, compared to 23% in 2013. The significant Rouble depreciation resulted in an unrealised foreign exchangeloss of RUB 31,509 million (USD 820 million) and a loss from operations withderivative financial instruments of RUB 7,338 million (USD 191 million). Thesetwo factors caused the company to report a net loss for 2014. The 2014 netloss amounted to RUB 13.4 billion (USD 349 million), compared to a net profitof RUB 8.6 billion (USD 269 million) in 2013. Basic and diluted loss per sharecame to RUB 105 (USD 2.73) for 2014, compared to earnings of RUB 60 (USD 1.88)in 2013. Adjusted for the unrealised foreign exchange loss, 2014 net profitwas RUB 18,114 million, up by 88% from an adjusted net profit of RUB 9,659million for 2013. Cash flow from operating activities remained very robust, increasing by 53%year-on-year to RUB 27.5 billion (USD 716 million) in 2014, compared to RUB17.9 billion (USD 563 million) in 2013. Gross debt at 31 December 2014 amounted to RUB 123.8 billion (USD 2,201million), compared to RUB 52.8 billion (USD 1,612 million) at 31 December2013. Net debt at 31 December 2014 stood at RUB 93.1 billion (USD 1,656million), 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 EBITDA ratio increased to2.48 as of 31 December 2014, from 1.83 as of 31 December 2013. Commenting on 2014 results, PhosAgro Management Board Chairman and CEO AndreyGuryev said: "We had a good year in terms of phosphate industry supply-demand fundamentals,which remain tight. We benefitted on the revenue side from a healthy USD 30,or 7%, increase in average DAP prices (FOB Tampa) from USD 442 in 2013 to USD472 in 2014. At the same time, we continued implementing cost-cuttinginitiatives throughout the year with programmes to improve staff efficiencyand to optimise our mining and logistics operations. As a result, our marginshave improved to what we consider to be sustainable levels, with gross profitmargin close to 44% and a solid EBITDA margin of 31%. "At the same time Ukraine-related factors, combined with a significant declinein oil prices, led to a sharp and unexpected devaluation of the rouble,especially in the fourth quarter of 2014. While our financial position remainsstrong, this had a negative impact on our balance sheet and led to a temporaryweakening of our debt ratios as of 31 December 2014. The rouble devaluationalso resulted in a significant unrealised FX loss in Q4 2014 due to therevaluation of our USD-denominated debt, creating a net loss for the full yeardespite very strong performance at all other levels. "On the flip side, the situation has significantly improved already in thefirst three months of 2015. The weak rouble, combined with our cost-cuttinginitiatives, has substantially improved PhosAgro's global cost position, and Iam very optimistic about the results we will report for 1Q 2015. We arecarefully monitoring all our financial policies, and as of the end of Marchour position was significantly better than the snapshot on 31 December 2014,which will enable us to improve returns for shareholders. "With respect to phosphate industry fundamentals, we expect another good yearin terms of demand, while supply will remain balanced. In 1Q 2015 we sawaverage DAP prices (FOB Tampa) improve by USD 24 from USD 459 in 4Q 2014. "Longer-term I am happy to report that 2014 was a very important year for usin terms of our strategic development: we have completed our three-year effortto consolidate 100% ownership in all of our main production subsidiaries, andwe unveiled our 2020 Strategy. Combined with improved current returns,implementation of this strategy will provide significant growth opportunitiesalready in 2017, which should benefit our investors and other stakeholders." 2014 Market Conditions - The average price for DAP in 2014 was USD 472/tonne FOB Tampa,and the average price for MAP was USD 469/tonne FOB Baltics/Black Sea. Thiscompares favourably to average prices of USD 442 and USD 453, respectively, in2013. - 2014 was marked by supply constraints from the very beginning:Morocco, the United States, Saudi Arabia and Russia decreased spot supplies ofDAP/MAP by 600-700 ths tonnes in 1Q 2014. Combined with early demand fromLatin America and Europe following very weak volumes in 4Q 2013, this led to asharp recovery in DAP/MAP prices in January 2014, followed by a furtherseasonal recovery up to USD 500 per tonne (FOB Tampa) 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. - Seasonal demand in Brazil, in conjunction with summer purchasesin the US market, contributed to higher prices for DAP/MAP in July and August,topping out at over USD 500 per tonne (FOB Tampa), despite continued weaknessin the Indian market and increased Chinese exports. - From September the combination of the seasonal slowdown anddramatically increased ammonia prices led to production curtailments; as aresult, low-season prices came down to an average of USD 459 per tonne FOBTampa in 4Q 2014, significantly better than the average USD 362 per tonne FOBTampa in 4Q 2013. - Overall P2O5 consumption in 2014 can be characterised by twosignificant factors: another year of very low P2O5 consumption in India, whereDAP imports were around 3.6 million tons; and another record year for P2O5consumption in Brazil, driven by increased soybean production, with totalimports of phosphate-based fertilizers increasing by over 11%. - Phosphoric acid prices for Indian DAP producers have increasedthree times in 2014, from USD 615 per tonne of P2O5 at the end of 2013 to USD681 per tonne of P2O5 in 1Q 2014, then to USD 715 per tonne in 2Q and USD 765per tonne of P2O5, CFR, remaining at the same level in 4Q 2014. - The increase in demand and prices for phosphoric acid andfertilizers pushed up the price of phosphate rock. Global trade in phosphaterock increased significantly in 2014, up 15% year-on-year to 30 milliontonnes, primarily due to imports by the USA, Indonesia, Brazil and India.Positive pricing for phosphate-based fertilizers combined with increasedimport demand brought phosphate rock prices up from USD 106/tonne FOB Morocco(32% P2O5) to USD 123/tonne at the end of 2014. - Global urea trade for the second consecutive year wassignificantly influenced by much higher exports from China, which waspartially balanced by lower urea exports from Egypt and Ukraine. While pricesincreased in 3Q 2014, downward pressure renewed in the fourth quarter asresult of the seasonal slowdown. The average urea price in 2014 was USD 311per tonne FOB Baltic, versus USD 327 per tonne FOB Baltic in 2013. Phosphate-Based Products Segment Result 2014 2013 year-on-year RUB mln RUB mln change, %Revenue 105,832 91,065 16%Cost of goods sold (59,285) (59,588) (1%)Gross profit 46,547 31,477 48% Phosphate-based products segment revenue increased by 16% year-on-year andtotalled RUB 105,832 million (USD 2,754 million) in 2014. PhosAgro increasedproduction of phosphate-based fertilizers and MCP by 3.2% year-on-year in2014, while sales volumes increased by 0.8% year-on-year. Production and salesvolumes for phosphate rock and nepheline concentrate decreased in 2014compared to 2013 by 3.0% and 14.9%, respectively. The increase in fertilizer sales volumes was primarily due to favourablemarket conditions 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 79% year-on-year,with price increases in RUB terms of 21.3%. This was partly offset by an 8%decrease in DAP exports. Domestic MAP sales increased by 28% year-on-year.Revenue from DAP/MAP sales increased by 36% year-on-year, from RUB 31,264million (USD 982 million) in 2013 to RUB 42,654 million (USD 1,110 million) in2014, representing an overall 10% year-on-year increase in sales volumes and24% increase in DAP/MAP average revenue per tonne denominated in roubles. - NPK fertilizers: Domestic NPK sales volumes increased by 38%year-on-year. As a result, revenue from domestic NPK sales increased by 38%year-on-year, from RUB 7,310 million (USD 230 million) in 2013 to RUB 10,067million (USD 262 million) in 2014. Revenue from NPK export sales decreased by2% year-on-year, from RUB 13,657 million (USD 429 million) in 2013 to RUB13,363 million (USD 348 million) in 2014, as a result of a 16% year-on-yeardecline in NPK export sales volumes, which was partially compensated by a 17%increase in revenue per tonne denominated in roubles. - Phosphate rock: Total sales of phosphate rock decreased by 15%year-on-year to RUB 14,393 million (USD 375 million) in 2014 due to higherinternal consumption of phosphate rock by PhosAgro production sites and lowerphosphate rock production volumes. The phosphate-based products segment's gross profit for 2014 increased by 48%year-on-year to RUB 46,547 million (USD 1,211 million), resulting in a grossprofit margin of 44%, compared to a 35% margin in 2013, which was the resultof higher sales denominated in roubles and decreased cost of goods sold. Revenue per tonne for the principal phosphate-based products Product 2014 2013 year-on-year RUB RUB change, %Domestic:MAP 17,039 15,383 10.8%DAP 17,577 14,246 23.4%NPK 13,922 13,979 (0.4%)NPS 10,605 11,336 (6.4%)MCP 20,806 19,988 4.1%PKS 10,909 - -SOP 25,259 19,983 26.4%STPP 31,422 30,157 4.2% Export:MAP 18,112 14,935 21.3%DAP 19,824 14,370 38.0%NPK 13,959 11,938 16.9%NPS 17,388 9,561 81.9%MCP 21,211 17,587 20.6%PKS 11,410 - -SOP 27,851 17,085 63.0%STPP 36,901 29,613 24.6%Nitrogen Segment Result 2014 2013 year-on-year RUB mln RUB mln change, %Revenue 16,626 12,810 30%Inter-segment transfers 8 99 (92%)Cost of goods sold (10,180) (10,036) 1%Gross profit 6,454 2,873 125% Nitrogen segment revenue increased by 30% year-on-year to RUB 16,626 million(USD 433 million) in 2014 from RUB 12,810 million (USD 402 million) in 2013.Production and sales volumes of nitrogen-based fertilizers increased by 5% and10% year-on-year, respectively, in 2014. Export revenue from urea increased by 33% year-on-year from RUB 8,988 million(USD 282 million) in 2013 to RUB 11,917 million (USD 310 million) in 2014, dueto a 14% increase in sales volumes and an increase in revenue per tonne of16%. Total revenue from ammonium nitrate (AN) decreased by 5% from RUB 2,620million (USD 82 million) in 2013 to RUB 2,499 million (USD 65 million) in2014, due to an 11% decrease in sales volumes, which was balanced by an 8%increase in revenue per tonne. Nitrogen segment gross profit during 2014 increased by 125% year-on-year toRUB 6,454 million (USD 168 million), mainly as a result of the significantrevenue growth caused by the devaluation of the Rouble against the US Dollar,resulting in a gross profit margin of 39%, compared to 22% in 2013. Revenue per tonne for the principal nitrogen-based fertilizers Product 2014 2013 year-on-year RUB RUB change, %Domestic:Ammonium nitrate 10,091 9,354 7.9%Urea 11,431 12,618 (9.4%) Export:Ammonium nitrate - 9,591 (100.0%)Urea 12,068 10,410 15.9%NP 10,725 9,121 17.6%Cost of Sales Item 2014 2013 Change y-on-y % of % of % RUB USD cost RUB USD cost mln mln sales mln mln sales RUBMaterials andservices 24,532 638 36% 21,084 662 31% 3,448 16%Salaries and socialcontributions 9,754 254 14% 12,022 377 18% (2,268) (19%)Natural gas 7,505 195 11% 6,300 198 9% 1,205 19%Depreciation 7,332 191 11% 7,147 224 10% 185 3%Sulphur andsulphuric acid 4,522 118 7% 3,428 108 5% 1,094 32%Potash 3,915 102 6% 4,114 129 6% (199) (5%)Electricity 3,650 95 5% 3,478 109 5% 172 5%Ammonia 3,423 89 5% 4,671 147 7% (1,248) (27%)Fuel 2,791 73 4% 4,161 131 6% (1,370) (33%)Heating energy 1,161 30 2% 579 18 1% 582 101%Ammoniumsulphate 839 22 1% 1,157 36 2% (318) (27%)Other items 14 - - 53 2 - (39) (74%)Change in stock ofWIP and finishedgoods (617) (16) (1%) (55) (2) - (562) 1022%Total 68,821 1,791 100% 68,139 2,139 100% 682 1% PhosAgro's cost of sales increased by just 1% year-on-year in 2014, to RUB68,821 million (USD 1,791 million), while overall fertilizers sales volumesincreased by 3%. This cost of sales performance was primarily due to thefollowing factors: - An increase of RUB 3,488 million (USD 90 million), or 16%,year-on-year in the cost of materials and services due to price inflation of5.9% (PPI 2014 vs 2013), together with a 3.7% increase in production volumesand the outsourcing of certain functions, which was balanced by a significantdecrease in personnel costs. - A 19%, or RUB 2,268 million (USD 59 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 1,248 million (USD 32 million), or 27%, from RUB 4,671 million (USD 147million) in 2013 to RUB 3,423 million (USD 89 million) in 2014. This was dueto year-on-year declines in purchase volumes by 28% partially offset by a 2%increase in prices. PhosAgro was able to decrease purchases from third partiesafter the modernisation of its ammonia production facilities in Cherepovets,which helped to increase ammonia production by 132 ths tonnes, or by 13%year-on-year in 2014. - A year-on-year increase in expenditure on natural gas of RUB1,205 million (USD 31 million), or 19%, to RUB 7,505 million (USD 195 million)in 2014. Natural gas is required primarily for the production of ammonia. Theprice per cubic metre of natural gas rose by 8%, while natural gas consumptionincreased by 11% year-on-year. The price increase was due to a 15% tariffincrease in the second half of 2013. The 11% growth in volumes of gaspurchased was due to a 13% year-on-year increase in ammonia production. - A year-on-year decrease in expenditure on potash by 5%, or RUB199 million (USD 5 million), to RUB 3,915 million (USD 102 million) in 2014.This was mainly due to an 18% decrease in potash purchase prices, which wasbalanced by a 16% increase in potash purchase volumes as a result of an 6%year-on-year increase in NPK production. - A year-on-year decrease in expenditure on fuel by RUB 1,370million (USD 36 million), or 33%, from RUB 4,161 million (USD 131 million) in2013 to RUB 2,791 million (USD 73 million) in 2014. This was in line with the35% decrease in fuel consumption resulting from the replacement of heating oilpurchases with direct purchases of heating energy, as well as decreasedopen-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 318 million(USD 8 million), or 27%, year-on-year. - Heating energy expenses increased by RUB 582 million (USD 15million) year-on-year, from RUB 579 million (USD 18 million) in 2013 to RUB1,161 million (USD 30 million) in 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 RUB1,094 million (USD 28 million), or 32%, year-on-year from RUB 3,428 million(USD 108 million) in 2013 to RUB 4,522 million (USD 118 million) in 2014. Thiswas driven by a 4% increase in volumes consumed due to higher production ofphosphate-based fertilizers and feed phosphates, and by a 27% increase inpurchase prices. Administrative expenses rose by 8% year-on-year to RUB 9,081 million (USD 236million) in 2014 primarily due to the following reasons: - An increase in payroll expenses by 7%, or RUB 359 million (USD 9million), as result of restructuring of the Group's administrative personneland their relocation to Cherepovets, as well as implementation of the newmanagement KPI incentive system, which led to increased bonuses to keymanagement as result of overall EBITDA growth. - An increase in professional services by 60%, or RUB 414 million(USD 11 million). Selling expenses rose by 39% year-on-year, from RUB 8,378 million (USD 263million) in 2013 to RUB 11,646 million (USD 303 million) in 2014. This wasprimarily due to the following changes from 2013 to 2014: - A 6% increase in the Russian Railways infrastructure tariff andoperators' fees from RUB 4,334 million (USD 136 million) to RUB 4,579 million(USD 119 million). An increase in container shipments, combined with a 22%increase in domestic fertiliser sales (largely shipped on a CPT basis), led tohigher use of rail freight transport. - A 104% increase in freight, port and stevedoring expenses fromRUB 2,577 million (USD 81 million) to RUB 5,252 million (USD 137 million),mainly due to increased shipments through ports by 9% and an increase in porttariffs. PhosAgro's foreign exchange loss increased by 1,019% year-on-year, from RUB2,999 million (USD 94 million) in 2013 to RUB 33,545 million (USD 873 million)in 2014. The loss from operations with derivative financial instruments wasRUB 7,338 million (USD 191 million). That was the result of the significant72% Rouble depreciation against the US Dollar during 2014 (from RUB 32.7292 at31/12/2013 to RUB 56.2584 at 31/12/2014), compared to a decline of just 8%during 2013 (from RUB 30.3727 at 31/12/2012 to RUB 32.7292 at 31/12/2013). Theforeign exchange loss of over RUB 31.5 billion and loss from operations withderivative financial instruments of over RUB 1.4 billion in 2014 wasunrealised, compared to an unrealised foreign exchange loss of just RUB 1.1billion and an unrealised gain from revaluation of derivatives of RUB 0.1billion in 2013. Cash spent on capex in 2014 amounted to RUB 20,549 million (USD 535 million),increasing by 15% in comparison with RUB 17,795 million (USD 559 million)spent in 2013. PhosAgro's capital expenditure, which consists of additions toproperty, plant and equipment, amounted to RUB 18,575 million (USD 483million) for 2014, compared to RUB 17,662 million (USD 555 million) in 2013.Capital expenditure focused on construction of the main ore shaft № 2 at theKirovsky underground mine, the new 760 ths tonnes/year ammonia plant atPhosAgro-Cherepovets as well as the construction of new storage facilities forliquid ammonia at Balakovo. Outlook Market: - DAP prices have recovered by more than USD 20 in 1Q 2015 to anaverage of USD 483 per tonne (FOB Tampa), compared to an average of USD 459 in4Q 2014, thanks to healthy demand from developed agricultural markets. - At the same time, the decline in feedstock prices has helped toreduce average industry cash costs: ammonia CFR prices in the US and Moroccohave come down below USD 500 per tonne from peak levels of USD 655 per tonnein autumn of last year. - Low imports by India in 2014 have depleted local fertilizerstocks, which combined with a decision by the Indian Government to increasethe P&K subsidy in its 2015/2016 budget, should lead to much better localconsumption and imports of phosphate-based fertilisers in 2015. We sawincreased market activity from Indian buyers already at the end of last year,well ahead of the budget announcement in the end of February. Increased demandfrom India, combined with healthy demand from the rest of the world, shouldsupport DAP pricing throughout the year. - The new Indian phosphoric acid price was settled recently, at USD 805 pertonne of P2O5 CFR India for January-June 2015, representing a further USD 40increase over the 4Q 2014 price. - Agricultural commodities performance continues to be a limitingfactor for significant fertilizer price increases. At the same time, farmerincentive to maintain high yields on cereals, especially soybeans, withminimum growth in planted acres should support phosphate application. Company: - PhosAgro's substantially improved low cash cost position combinedwith the Rouble depreciation has further enhanced our competitive advantage,which together with our flexible production makes the Company well placed torespond to any changes in global demand for concentrated or complexfertilizers and NPS. The Company intends to invest further into bothincreasing capacity and expanding the number of NPK grades it produces. - The dramatic Rouble depreciation has worsened the economicsituation for Russian farmers and for 2015 spring planting season we areoffering discounts to local farmers in the range of 15-20% on variousfertilizers compared to netback export prices. - All major development projects are on track, including the newammonia plant designed to increase cost efficiency and support furtherexpansion of PhosAgro's complex fertilizer production capacity. - PhosAgro continued its restructuring process in 1Q 2015 with thelaunch of a merger of Agro-Cherepovets, PhosAgro AG and Nordic Rus Holdinginto PhosAgro-Cherepovets. This is aimed at further enhancing cost efficiencyand simplifying the corporate structure. - New trade offices are due to start operations in 1H 2015 inGeneva, Switzerland and Sao Paolo, Brazil. - The Company plans to decrease leverage ratios in 2015, aiming toend the year closer to the target of 1x net debt/EBITDA. - The Board of Directors, at its meeting on 28 April 2015, changedPhosAgro's dividend policy to increase net profit available for distributionas dividends to a range of 30%-50%, from the previous range of 20%-40%. Conference call and webcast On 29 April 2015, PhosAgro will hold a conference call and webcast at 14.00London time (16:00 Moscow; 09:00 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=238 Russian: 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 OfficerAnastacia Basos, Deputy Press Secretary+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 third 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 2014 IFRS revenue was over USD 3.2 bln and EBITDA was USD 979 mln. For further information on PhosAgro please visit: www.PhosAgro.com 2014 2013 RUB Million RUB MillionContinuing operationsRevenues 123,124 104,566Cost of sales (68,821) (68,139)Gross profit 54,303 36,427 Administrative expenses (9,081) (8,380)Selling expenses (11,646) (8,378)Taxes, other than income tax (1,983) (2,149)Other expenses, net (1,997) (1,378)Operating profit 29,596 16,142 Finance income 1,059 1,138Finance costs (11,610) (2,272)Foreign exchange loss, net (33,545) (2,999)Share of (loss)/profit of associates (756) 19Restructuring costs (173) (1,985)(Loss)/profit before tax (15,429) 10,043 Income tax benefit/(expense) 2,034 (1,740)(Loss)/profit from continuing operations (13,395) 8,303 Discontinued operationsProfit from discontinued operations, net of tax - 273(Loss)/profit for the year (13,395) 8,576 Attributable to:Non-controlling interests 246 916Shareholders of the Parent (13,641) 7,660 Other comprehensive incomeRevaluation of available-for-sale securities 23 -Actuarial gains and losses, net of tax 133 (111)Foreign currency translation difference 5,220 247Other comprehensive income for the year 5,376 136Total comprehensive (loss)/income for the year (8,019) 8,712 Attributable to:Non-controlling interests 248 901Shareholders of the Parent (8,267) 7,811Basic and diluted (loss)/earnings per share (in RUB) (105) 60 31 December 2014 31 December 2013 RUB million RUB millionAssetsProperty, plant and equipment 86,086 75,928Intangible assets 572 623Investments in associates 12,975 8,485Deferred tax assets 4,249 1,806Other non-current assets 8,935 4,383Non-current assets 112,817 91,225 Other current investments 1,656 1,673Derivative financial assets - 79Inventories 12,527 12,293Current income tax receivable 2,975 668Trade and other receivables 18,993 11,376Cash and cash equivalents 30,687 8,938Current assets 66,838 35,027Total assets 179,655 126,252 EquityShare capital 372 372Share premium 7,494 7,494Retained earnings 22,708 48,556Other reserves 5,258 (116)Equity attributable to shareholders of the Parent 35,832 56,306Equity attributable to non-controlling interests 149 3,020Total equity 35,981 59,326 LiabilitiesLoans and borrowings 93,002 39,550Defined benefit obligations 453 971Deferred tax liabilities 2,118 3,304Non-current liabilities 95,573 43,825 Trade and other payables 15,321 9,377Current income tax payable 620 518Loans and borrowings 30,822 13,206Derivative financial liabilities 1,338 -Current liabilities 48,101 23,101Total equity and liabilities 179,655 126,252 2014 2013 RUB million RUB millionCash flows from operating activities(Loss)/profit before tax from continuing operations (15,429) 10,043Adjustments for:Depreciation and amortisation 8,013 7,792Loss on disposal of fixed assets 280 91Finance income (1,059) (1,138)Finance costs 11,610 2,272Share of loss/(profit) of associates 756 (19)Foreign exchange loss, net 35,010 3,252Operating profit before changes in working capital and provisions 39,181 22,293(Increase)/decrease in inventories (100) 122(Increase)/decrease in trade and other receivables (7,191) 1,515Increase/(decrease) in trade and other payables 2,161 (823)Cash flows from operations before income taxes and interest paid 34,051 23,107Income tax paid (3,847) (3,276)Finance costs paid (2,695) (1,906)Cash flows from operating activities 27,509 17,925 Cash flows from investing activitiesLoans (issued)/repaid, net (907) 785Acquisition of intangible assets (160) (198)Acquisition of property, plant and equipment (20,549) (17,795)Proceeds from disposal of property, plant and equipment 335 613Proceeds from disposal of investments 254 107Finance income received 817 788Cash 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" - 633Cash flows used in investing activities (20,210) (15,604) Cash flows from financing activitiesProceeds from borrowings 71,412 47,559Repayment of borrowings (43,145) (36,979)Acquisition of non-controlling interests (7,078) (11,674)Proceeds from contribution to charter capital of subsidiaries bynon-controlling interests 132 -Tax on intra-group dividends (247) -Dividends paid to shareholders of the Parent (5,737) (7,511)Payment of finance lease liabilities (1,015) (1,465)(Loss)/income from settlement of derivatives (5,921) 123Proceeds from issuance of additional shares - 6,407Dividends paid to non-controlling interests - (2)Cash flows from/(used in) financing activities 8,401 (3,542)Net increase/(decrease) in cash and cash equivalents 15,700 (1,221)Cash and cash equivalents at 1 January 8,938 9,664Effect of exchange rates fluctuations 6,049 495Cash and cash equivalents at 31 December 30,687 8,938