Phosagro S Regulatory News (PHOR)

For Immediate Release 20 May 2014PhosAgro Q1 2014 EBITDA up 13% to RUB 8.6 bln Moscow - PhosAgro ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR),a leading global vertically integrated phosphate-based fertilizer producer,today announces its reviewed condensed consolidated IFRS financial results forthe three months ended 31 March 2014. PhosAgro earned a net profit for theperiod of RUB 1.9 billion (USD 55 million), compared to RUB 3.3 billion (USD108 million) in Q1 2013. Basic and diluted earnings per share came to RUB 14(USD 0.40) for Q1 2014 compared to RUB 23 (USD 0.76) in Q1 2013. Q1 2014 Financial and Operational Highlights: Result Q1 2014 Q1 2013 year-on-year change (RUB vs. RUB), % RUB USD RUB USD million millionRevenue 29,416 841 28,902 950 2%EBITDA* 8,587 246 7,578 249 13%EBITDA margin 29% 29% 26% 26% 3 p.p.Net Profit 1,909 55 3,291 108 (42%)Earnings per share 14 0.40 23 0.76 (39%) Sales volumes Kmt KmtPhosphate-based 1,252.2 1,327.0 (5.6%)productsNitrogen-based 426.7 336.7 27%fertilizersApatit mine and 873.0 1,018 (14%)beneficiation plantOther products 57.6 47.3 22% RUB/USD rates: average Q1 2014: 34.9591; average Q1 2013: 30.4142 s of 31 March 2014: 35.6871; as of 31 December 2013: 32.7292 *EBITDA is calculated as operating profit adjusted for depreciation andamortisation. Other Q1 2014 Highlights Production, sales and logistics flexibility: - During the first quarter of 2014, PhosAgro's revenue and sales volumesbenefited from the Company's strategy of enhancing production flexibility,with total fertilizer production and sales volumes growing year-on-year by 5%and 1%, respectively. Revenue for the same period increased by 2% year-on-yearas result of more than 3% year-on-year increase in average export DAP/MAPrealised prices, partially offset by decrease in NPK realised prices; Strategic development: - 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 ofthe new 760 ths tonnes/year ammonia plant at PhosAgro-Cherepovets. Consolidation of ownership in production facilities and business development: - In February 2014, the Group launched a voluntary tender offer to acquireordinary shares of OJSC PhosAgro-Cherepovets. The offer price, which wasdetermined in accordance with Russian law, is RUB 44.0 per ordinary share witha nominal value of RUB 1.10. The offer period expired on 6 May 2014. - In February 2014, PhosAgro launched a new subsidiary, LLC Smart BulkTerminal. The Company will organize the construction and subsequent operationof the new terminal at the port of Ust-Luga, where it will handle fertilizersproduced and sold by PhosAgro. PhosAgro owns 70% of LLC Smart Bulk Terminal. PhosAgro's Q1 2014 net profit was RUB 1.9 billion (USD 55 million), a decreaseof 42% year-on-year from RUB 3.3 billion (USD 108 million) in Q1 2013. Thedecline in net profit was due to the more than 9% devaluation of the RussianRouble during the first three months of the year, from RUB/USD 32.73 as of 31December 2013 to RUB/USD 35.69 as of 31 March 2014. This caused significantincrease in unrealised exchange losses in Q1 2014 of RUB 2.7 billion comparedto Q1 2013. Revenue for the period increased by 2% year-on-year to RUB 29.4billion (USD 841 million), compared to RUB 28.9 billion (USD 950 million) forQ1 2013. Operating profit for Q1 2014 was RUB 6.6 billion (USD 189 million), a 16%increase from RUB 5.7 billion (USD 187 million) in Q1 2013. EBITDA was RUB 8.6million (USD 246 million) in Q1 2014, up 13% year-on-year. EBITDA marginincreased year-on-year to 29%, compared to 26% for Q1 2013. Cash flows from operating activities increased by 60% and amounted to RUB 6.5billion (USD 186 million) in Q1 2014, compared to RUB 4.1 billion (USD 134million) in Q1 2013. The Company's capital expenditure (capex) in cash termsduring Q1 2014 was RUB 3.81 billion (USD 109 million), compared to RUB 2.97billion (USD 98 million) in Q1 2013. Net debt at 31 March 2014 stood at RUB 45.4 billion (USD 1,272 million), upfrom RUB 43.8 billion (USD 1,339 million) at 31 December 2013. While net debtdecreased in USD terms, it increased in RUB terms during Q1 2014 because ofthe RUB deprecation, and the fact that most of the Company's debt isdenominated in USD. The Company's net debt to annualised EBITDA ratiodecreased to 1.3 as of 31 March 2014 from 1.8 as of 31 December 2013. Commenting on the Q1 2014 results, PhosAgro Management Board Chairman and CEOAndrey Guryev said: "I am pleased to report very strong results for Q1 2014, which represent oursignificantly improved operating environment, not just compared to Q4 2013,the worst quarter for the phosphate fertilizer industry since 2009, but alsoto Q1 2013, when average FOB Tampa DAP prices were actually 5% higher, at USD487 per tonne vs USD 460 per tonne in Q1 2014. We have managed to increaseoperating cash flows by 60% compared to last year, which clearly demonstratesthe benefits our vertically integrated flexible production, and shows that ourcost-cutting initiatives have been successful. "In Q1 2014 we managed to further increase fertilizer production and sales by5% and 1%, respectively, and we generated a 29% EBITDA margin. "We continued with our consolidation programme with the launch of a voluntarytender offer to acquire ordinary shares of PhosAgro-Cherepovets. I am pleasedto report that more than 10% of minority shareholders have accepted thisoffer, which puts us on track to fully consolidate PhosAgro-Cherepovets by theend of this year. This will be a significant achievement, bringing us to 100%ownership of all our production subsidiaries, thus increasing returns forPhosAgro shareholders." Q1 2014 Market Conditions - Early demand from Latin America and Europe following very weak volumes in Q42013 led to a sharp recovery in DAP/MAP prices in January 2014, followed byfurther seasonal recovery up to USD 500 (FOB Tampa) in February-March 2014;urea prices peaked at USD 360 (FOB Baltics) at the end of January; - Agricultural prices were strong: prices for soybeans and wheat increasedover 15% from the beginning of the year, corn is up over 20%; - After a very weak year with respect to phosphate consumption, and ahead ofelections in May, the Indian Government made its subsidy announcement early,in March. The decision was to leave DAP subsidy and MRP (maximum retail price)at last year's levels of Rs 12,350 and Rs 22,500, respectively; - The rupee has strengthened to around Rs/USD 61 in Q1 2014, compared to theweakest level of around Rs/USD 69 in June-July 2013; - Phosphoric acid prices for Indian DAP producers have increased by 15% fromUSD 615 at the end of 2013 to USD 681 in Q1 2014, thus increasing the cost oflocal production. Phosphate-based products segment Result Q1 2014 Q1 2013 year-on-year RUB mln RUB mln change, %Revenue 24,687 25,182 (2%)Cost of goods sold (14,697) (16,608) (12%)Gross profit 9,990 8,574 17% Phosphate-based products segment revenue decreased by 2% and totalled RUB24,687 million (USD 706 million) in Q1 2014. PhosAgro increased production ofphosphate-based fertilizers and MCP by 4.3% year-on-year in Q1 2014, whilesales volumes decreased by 5.4% year-on-year. Production and sales volumes forphosphate rock and nepheline concentrate decreased in Q1 2014 compared to Q12013 by 2.5% and 14.2%, respectively. The decrease in sales volumes was primarily due to the effect of a significantincrease in CFR sales, which resulted in higher volumes of goods in transit,as well as the accumulation of stock in PhosAgro's distribution system aheadof the Russian planting season. These were the major reasons for the 2%year-on-year decrease in phosphate-based products segment revenue in Q1 2014.Domestic NPK sales volumes increased by 60% year-on-year, which partiallycompensated for weaker NPK prices during Q1 2014. As a result, revenue fromdomestic NPK sales increased by 42% year-on-year, from RUB 1,695 million (USD56 million) in Q1 2013 to RUB 2,406 million (USD 69 million) in Q1 2014.Revenue from NPK export sales decreased by 9% year-on-year, from RUB 3,659million (USD 120 million) in Q1 2013 to RUB 3,325 million (USD 95 million) inQ1 2014. This was mainly the result of a 10% decline NPK export sales volumes.Revenue from DAP/MAP sales decreased by 3% year-on-year from RUB 9,102 million(USD 299 million) in Q1 2013 to RUB 8,831 million (USD 253 million) in Q12014. This decrease was due to a 6% year-on-year decline in sales volumesoutweighing a more than 3% increase in DAP/MAP average revenue per tonne.Total sales of phosphate rock decreased by 7% year-on-year to RUB 4,162million (USD 119 million) in Q1 2014 due to higher internal use. The phosphate segment's gross profit for Q1 2014 increased by 17% year-on-yearto RUB 9,990 million (USD 286 million), resulting in a gross profit margin of40%, compared to a 34% margin in Q1 2013, which was the result of increasedsales combined with cost savings (a more detailed discussion is provided inthe CoGS analysis below). Revenue per tonne for the principal phosphate-based products Product Q1 2014 Q1 2013 year-on-year RUB RUB change, %Domestic:MAP 15,457 15,684 (1.4%)DAP 15,190 15,305 (0.8%)NPK 12,549 14,121 (11.1%)MCP 18,963 19,394 (2.2%)NPS 10,592 11,543 (8.2%)SOP 23,110 19,551 18.2%STPP 30,396 30,798 (1.3%) Export:MAP 15,713 15,037 4.5%DAP 15,507 15,003 3.4%NPK 11,965 11,872 0.8%MCP 19,738 16,988 16.2%NPS 9,666 10,655 (9.3%)SOP 23,409 14,937 56.7%STPP 34,449 28,401 21.3%Nitrogen segment Result Q1 2014 Q1 2013 year-on-year RUB mln RUB mln change, %Revenue 4,570 3,658 25%Inter-segment transfers 8 35 (77%)Cost of goods sold (2,750) (2,239) 23%Gross profit 1,828 1,454 26% Nitrogen segment revenue increased by 25% year-on-year to RUB 4,570 million(USD 131 million) in Q1 2014 from RUB 3,658 million (USD 120 million) in Q12013. Production and sales volumes of nitrogen-based fertilizers increased by8% and 27% year-on-year, respectively, in Q1 2014. Export revenue from urea increased by 31% year-on-year from RUB 2,414 million(USD 79 million) in Q1 2013 to RUB 3,168 million (USD 91 million) in Q1 2014,in line with the 31% increase in sales volumes. Ammonium nitrate (AN) salesvolumes increased by 20%, which was the major factor for the 14% increase inrevenue from AN sales from RUB 1,168 million (USD 38 million) in Q1 2013 toRUB 1,335 million (USD 38 million) in Q1 2014, balanced by a 5% decrease indomestic revenue per tonne. Nitrogen segment gross profit during Q1 2014 increased by 26% year-on-year toRUB 1,828 million (USD 52 million), in line with the segment's revenue growth,and resulting in a gross profit margin of 40%. A more detailed discussion oncost savings is provided in the CoGS analysis below. Revenue per tonne for the principal nitrogen-based fertilizers Product Q1 2014 Q1 2013 year-on-year RUB RUB change, %Domestic:Ammonium nitrate 9,392 9,839 (4.5%)Urea 11,846 12,527 (5.4%) Export:Urea 11,308 11,270 0.3%NP - 11,419 -Cost of sales Item Q1 2014 Q1 2013 Change y-o-y RUB USD % of RUB USD % of RUB % mln mln cost mln mln cost mlnMaterials andservices 4,977 142 29% 4,310 142 23% 667 15%Salaries andsocialcontributions 2,634 75 15% 3,302 109 18% (668) (20%)Natural gas 1,963 56 11% 1,578 52 8% 385 24%Depreciation 1,779 51 10% 1,731 57 9% 48 3%Potash 979 28 6% 1,267 42 7% (288) (23%)Electricity 895 26 5% 903 30 5% (8) (1%)Ammonia 823 24 5% 1,607 53 9% (784) (49%)Fuel 818 23 5% 1,382 45 7% (564) (41%)Sulphur andsulphuric acid 736 21 4% 891 29 5% (155) (17%)Heating energy 497 14 3% 117 4 1% 380 325%Ammonium sulphate 237 7 1% 379 12 2% (142) (37%)Other items 10 - - 9 - - 1 11%Change in stockof WIP andfinished goods 1,095 32 6% 1,142 37 6% (47) (4%)Total 17,443 499 100% 18,618 612 100% (1,175) (6%) PhosAgro's cost of sales decreased by 6% year-on-year in Q1 2014 to RUB 17,443million (USD 499 million). This decrease in cost of sales was primarily due tothe following factors: - A 20%, or RUB 668 million (USD 19 million), year-on-year decreasein personnel costs as a result of the staff optimisation programme. - An increase of RUB 667 million (USD 19 million), or 15%,year-on-year in the cost of materials and services due to price inflation of4.2 % (PPI Q1 2014 vs Q1 2013), and the outsourcing of certain functions. - A year-on-year decrease in expenditure on ammonia of RUB 784million (USD 22 million), or 49%, from RUB 1,607 million (USD 53 million) inQ1 2013 to RUB 823 million (USD 24 million) in Q1 2014. This was due toyear-on-year decreases in purchase volumes by 21% and prices by 28%. Thedecrease in volumes was mainly due to the modernisation of ammonia productionfacilities in Cherepovets, which helped to increase production of ammonia by32.6 ths tonnes, or by 12%. - A year-on-year increase in expenditure on natural gas of RUB 385million (USD 11 million), or 24%, to RUB 1,963 million (USD 56 million) in Q12014. Natural gas is required primarily for the production of ammonia. Theprice per cubic metre of natural gas rose by 15%, while natural gasconsumption increased by 9% year-on-year. The price increase was due to a 15%tariff increase in the second half of 2013. The 9% growth in volumes of gaspurchased was due to a 12% year-on-year increase in ammonia production as aresult of higher production capacity following completion of modernisations inQ3 2013. - A decrease in expenditure on potash by 23% year-on-year, or RUB288 million (USD 8 million), to RUB 979 million (USD 28 million) in Q1 2014.This was mainly due to a 38% decrease in potash purchase prices, which waspartially balanced by a 15% increase in potash purchase volumes as a result ofa 15% year-on-year increase in NPK production. - A year-on-year decrease in expenditure on fuel of RUB 564 million(USD 16 million), or 41%, from RUB 1,382 million (USD 45 million) in Q1 2013to RUB 818 million (USD 23 million) in Q1 2014, which was in line with a 47%decrease in fuel consumption as a result of decreased open-pit mining, as wellas the replacement of heating oil purchases with direct purchases of heatingenergy. - Heating energy expenses increased by RUB 380 million (USD 11million) from RUB 117 million (USD 4 million) in Q1 2013 to RUB 497 million(USD 14 million) in Q1 2014, as a result of the replacement of heating oil,which is consumed in boilers generating heating energy at Apatit, by directpurchases of heating energy. - A decrease in expenditure on sulphur and sulphuric acid by RUB155 million (USD 4 million), or 17%, year-on-year from RUB 891 million (USD 29million) in Q1 2013 to RUB 736 million (USD 21 million) in Q1 2014. This wasdriven by a 22% decrease in purchase prices. The decrease in purchase priceswas partly offset by a 5% increase in purchase volumes due to higherproduction volumes of phosphate-based fertilizers and feed phosphates. - The decline in production of NPS/NPK, which have a high nitrogencontent, led to a decrease in purchases of ammonium sulphate by RUB 142million (USD 4 million), or 37%, year-on-year. Administrative expenses rose by 8% year-on-year to RUB 1,973 million (USD 56million) in Q1 2014 primarily as a result of the indexation of wages. Selling expenses rose by 30% year-on-year, from RUB 2,106 million (USD 69million) in Q1 2013 to RUB 2,730 million (USD 78 million) in Q1 2014. This wasprimarily due to the following changes from Q1 2013 to Q1 2014: - A 15% increase in the Russian Railways infrastructure tariff andoperators' fees from RUB 1,146 million (USD 38 million) to RUB 1,318 million(USD 38 million). An increase in container shipments, combined with a 29%increase in domestic fertiliser sales (largely shipped on a CPT basis) has ledto higher use of rail freight transport - A 46% increase in port and stevedoring expenses, due tosignificantly increased CFR sales vs. FOB in Q1 2014 compared to Q1 2013; - The 82% increase in materials and services was also driven by thechange in delivery terms for European customers to CPT, following theconsolidation of Phosint Trading in Q4 2013. Cash spent on capex in Q1 2014 amounted to RUB 3,810 million (USD 109million), compared to RUB 2,974 million (USD 98 million) in Q1 2013.PhosAgro's capital expenditure, which consists of additions to property, plantand equipment, amounted to RUB 3,245 million (USD 93 million) for Q1 2014,compared to RUB 3,557 million (USD 117 million) in Q1 2013. Capitalexpenditure focused on construction of the main ore shaft № 2 at theKirovsky underground mine, as well as the construction of new storagefacilities for liquid ammonia at Balakovo Mineral Fertilizers. Total debt at 31 March 2014 amounted to RUB 62,162 million (USD 1,742million), compared to RUB 52,756 million (USD 1,612 million) at 31 December2013. Net debt at 31 March 2014 amounted to RUB 45,386 million (USD 1,272million), compared to RUB 43,818 million (USD 1,339 million) at 31 December2013. Outlook Market: - Agricultural commodities market trends in 2014 are positive: prices forsoybeans have increased by 16% year-to-date; corn and wheat - up more than10%; - Indian elections were held last week, with the opposition Bharatiya JannateParty (BJP) coming out as all-around winner, and economic reforms as a primaryfocus on the political agenda;. - The Indian Rupee is recovering further, now at 58.5 , increasing buyingpower of Indian farmers - Feedstock prices are increasing globally, driving cash costs of mostsignificant players up: sulphur prices in USA - China now are around USD135-145 up 90% from minimum 4Q 2013 levels of USD 70-80; ammonia has increased25% from the beginning of the year USD 425-450 to USD 540-545; phosphoric acidin India has increased to USD 715 in Q2 17% up from the beginning of the year. Company: - With global demand for complex fertilizers and NPS, the Company intends toinvest further into both increasing capacity and expanding the number of NPKgrades it produces, commencing PKS production in 2Q 2014 and adding micronutrients (such as B and Zn) fertiliser grades into its product portfolio; - Following completion of the voluntary tender offer, in which over 10% ofPhosAgro-Cherepovets shareholders participated, PhosAgro is on track tocomplete 100% consolidation of this subsidiary before the end of 2014 - PhosAgro continued its restructuring process in May with the merger of twoproduction subsidiaries, OJSC Apatit and CJSC Balakovo Mineral Fertilizers,which will enhance further cost efficiency; - All major development projects are on track, including the new ammonia plantdesigned to increase cost efficiency and support further expansion of complexfertilizer capacity; - The Management Board is carefully monitoring the capital expenditureprogramme to comply with PhosAgro's financial policy with respect to capitalspending and leverage. Conference call and webcast On 20 May 2014, PhosAgro will hold a conference call and webcast at 13.30London time (16:30 Moscow; 08:30 New York). Following a presentation of the results, PhosAgro CEO Andrey Guryev willanswer questions from conference call participants. The call will be held in English, with simultaneous translation into Russianon a separate line. Webcast links: English: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=2288Russian: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=2289 Participants Dial-in numbers: Russia:+7-495-662-57-93 UK:+44-20-7190-1595 (Local access)0800-358-5263 (Toll free) USA:+1-480-629-9822 (Local access)1-877-941-6013 (Toll free) Conference ID numbers: English call: 4684221Russian call: 4684222 For further information please contact: OJSC PhosAgro Irina Evstigneeva, Head of Corporate Finance and Investor Relationsir@phosagro.ru+7 495 231 3115 Timur Belov, Press Officer+7 495 232 9689 EM Sam 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. For further information on PhosAgro please visit: www.PhosAgro.com Three months ended 31 March 2014 2013* RUB Million RUB MillionContinuing operationsRevenues 29,416 28,902Cost of sales (17,443) (18,618)Gross profit 11,973 10,284 Administrative expenses (1,973) (1,833)Selling expenses (2,730) (2,106)Taxes, other than income tax (485) (498)Other expenses, net (181) (155)Operating profit 6,604 5,692 Finance income 161 204Finance costs (720) (565)Foreign exchange loss (3,772) (1,029)Share of profit of associates 4 182Restructuring costs - (24)Profit before tax 2,277 4,460 Income tax expense (368) (1,080)Profit from continuingoperations 1,909 3,380 Discontinued operationsLoss from discontinuedoperations, net of tax - (89)Profit for the period 1,909 3,291 Attributable to:Non-controlling interests ^ 52 461Shareholders of the Parent 1,857 2,830 Other comprehensive incomeActuarial gains and losses, netof tax (65) (60)Foreign currency translationdifference 640 94Other comprehensive income forthe period 575 34Total comprehensive income forthe period 2,484 3,325 Attributable to:Non-controlling interests ^ 50 454Shareholders of the Parent 2,434 2,871Basic and diluted earnings pershare (in RUB) 14 23 31 March 2014 31 December 2013 RUB million RUB millionAssetsProperty, plant and equipment 77,139 75,928Intangible assets 567 623Investments in associates 9,040 8,485Deferred tax assets 2,468 1,806Other non-current assets 4,691 4,383Non-current assets 93,905 91,225 Other current investments 1,806 1,585Derivative financial assets - 79Inventories 11,061 12,293Current income tax receivable 601 668Trade and other receivables 13,234 11,464Cash and cash equivalents 16,776 8,938Current assets 43,478 35,027Total assets 137,383 126,252 EquityShare capital 372 372Share premium 7,494 7,494Retained earnings 50,121 48,556Other reserves 461 (116)Equity attributable to shareholdersof the Parent 58,448 56,306Equity attributable to non-controllinginterests 2,974 3,020Total equity 61,422 59,326 LiabilitiesLoans and borrowings 50,842 39,550Defined benefit obligations 991 971Deferred tax liabilities 3,069 3,304Non-current liabilities 54,902 43,825 Trade and other payables 8,421 9,377Current income tax payable 903 518Loans and borrowings 11,320 13,206Derivative financial liabilities 166 -Other current liabilities 249 -Current liabilities 21,059 23,101Total equity and liabilities 137,383 126,252 Three months ended 31 March 2014 2013 RUB million RUB millionCash flows from operating activitiesProfit before tax from continuing operations 2,277 4,460Loss before tax from discontinued operations - (87)Adjustments for:Depreciation and amortisation 1,983 1,886Gain on disposal of fixed assets (24) (5)Finance income (161) (204)Finance costs 720 565Share of profit of associates (4) (182)Foreign exchange loss 4,013 1,127Operating profit before changes inworking capital and provisions 8,804 7,560Decrease in inventories 1,365 1,097Increase in trade and other receivables (1,271) (2,434)Decrease in trade and other payables (902) (656)Cash flows from operations before income taxesand interest paid 7,996 5,567Income tax paid (850) (1,059)Finance costs paid (627) (436)Cash flows from operating activities 6,519 4,072 Cash flows from investing activitiesLoans (issued)/repaid, net (29) 602Acquisition of intangible assets (48) (9)Acquisition of property, plant and equipment (3,810) (2,974)Proceeds from disposal of property, plantand equipment 144 106Disposal/(acquisition) of investments, net 234 (7)Finance income received 105 282Cash flows used in investing activities (3,404) (2,000) Cash flows from financing activitiesProceeds from borrowings 14,456 17,844Repayment of borrowings (9,431) (1,260)Acquisition of non-controlling interests (86) (5,857)Tax paid on intra-group dividends (247) -Dividends paid to non-controlling interests (1) (4)Dividends paid to shareholders of the Parent - (2,911)Finance leases paid (190) (460)Cash flows from financing activities 4,501 7,352Net increase in cash and cash equivalents 7,616 9,424Cash and cash equivalents at 1 January 8,938 9,664Effect of exchange rates fluctuations 222 (32)Cash flows used in discontinued operations - (74)Cash and cash equivalents at 31 March 16,776 18,982