-
Revenue increased to 56.26 bln RUB, compared to 55.96 bln RUB in the
first nine months of 2012.
-
Operating profit amounted to 14.63 bln RUB, compared with 17.09 bln
RUB in the first nine months of 2012.
-
Adjusted EBITDA comprised 17.32 bln RUB, compared to 19.55 bln RUB in
the first nine months of 2012.
Moscow,
Russia (December 11, 2013)
-- URALCHEM,
OJSC
(hereinafter URALCHEM Holding or the Company), the Russian holding
company of the URALCHEM Group, one of the largest producers of
nitrogen and phosphate fertilizers in Russia, announced its unaudited
IFRS financial results for the first nine months of 2013*.
The Group’s Key Financial Figures for the first nine months of
2013 and 2012 (million RUB)
|
9 months 2013
|
9 months 2012
|
Year-on-year change, %
|
Revenue
|
56,264
|
55,956
|
1%
|
Gross profit
|
29,856
|
32,266
|
-7%
|
Gross profit margin
|
55%
|
60%
|
|
Operating profit
|
14,625
|
17,094
|
-14%
|
Operating profit margin
|
27%
|
32%
|
|
| Net profit[1]
|
10,083
|
18,818
|
-46%
|
Net profit margin
|
19%
|
35%
|
|
Adjusted EBITDA
|
17,315
|
19,550
|
-12%
|
Adjusted EBITDA margin
|
32%
|
37%
|
|
Cash generated from operating activities
|
13,141
|
14,712
|
-6%
|
*Starting
from the reporting period of the first nine months of 2013, the Group
will announce consolidated financial statements of URALCHEM OSJC and
its subsidiaries on a quarterly basis.
Dmitry
Konyaev, CEO of URALCHEM, OJSC, commented on the Company's results
for the first nine months of 2013, "In the second half of 2013
the global market situation took a downward turn for fertilizer
producers. Despite the difficult market conditions, URALCHEM
maintained its revenues at the level of 2012. The Company is one of
the leaders in the nitrogen segment in terms of output of ammonia per
production unit. It is actively upgrading facilities, seeking to
reduce costs and developing production of high-margin niche products.
Thanks to its chosen strategy, URALCHEM has continued to maintain a
leading position in terms of margins, with the EBITDA margin at 32%.
The Company has maintained its financial stability together with its
ability to develop strategic operations, as confirmed, among other
things, by successive improvements of loan terms provided by banks."
Financial
Results
Revenue
for the first nine months of 2013 grew to 56.26 bln RUB, compared to
55.96 bln RUB in the first nine months of 2012. Operating profit
amounted 14.63 bln RUB, or 27% of revenue, compared with the
operating profit of 17.09 bln RUB, or 32% of revenue, in the first
nine months of 2012.
During
the first nine months of 2013, adjusted EBITDA reached 17.32 bln RUB,
compared to 19.78 bln RUB in the first nine months of 2012, a
decrease of 12%.
The
adjusted EBITDA margin for the first nine months of 2013 comprised
32% of revenue compared with 37% of revenue for the same period in
2012.
Markets
From
the beginning of the year, there was a decrease in demand for ammonia
from the industrial segment in East Asia and the producers of
phosphate fertilizers in India and North Africa. Demand in the US
decreased because of the late start of planting. Partially the market
was offset by the decrease in production in Egypt, Trinidad and Saudi
Arabia. Recovery began in early August. There was a decline in
exports from Ukrainian enterprises, and on the other hand, lower
prices provided for growing interest in procurement. Average quotes
for ammonia in January-September 2013 amounted to $498 / ton, which
is only 4% lower than in the same period in 2012 (FOB Yuzhny Port).
In
early 2013, high seasonal demand in Europe and the United States,
limited supply from Egypt, and low initial stock in the European
market resulted in increased prices for urea. However, in
mid-February, prices began to decline, reducing further until the end
of the first half of the year. Importing countries were postponing
purchases in anticipation of lower prices, while Chinese exporters
were actively accumulating stock expecting the "export window".
In the 2nd quarter there was a decrease in production in regions with
high costs, namely in Romania and Ukraine. Amid rising purchases from
India, Turkey and Latin America, there was a short period of
stabilization in June. However, after then, prices continued to
decline because of massive Chinese exports. Average quotes for urea
in January-September 2013 amounted to $339 / ton, which is 17% lower
than in the same period a year earlier (FOB The Baltic Sea).
Steady
growth in quotations for ammonium nitrate at the beginning of
the year was replaced by a fall in mid-March. In late May, prices
stabilized, helped by turnarounds at factories in the CIS. By the end
of the 2nd quarter, prices in the CIS received support from the
industrial segment. During January-September 2013 quotes for ammonium
nitrate averaged $291 / ton, which is 4.6 % lower than a year earlier
(FOB, The Baltic Sea). Starting from late September, prices for
ammonium nitrate began to recover due to reduced exports from
Ukraine, as well as to the beginning of the purchase season in the
domestic market of the CIS.
In
the phosphate fertilizers segment there was a global decline
in prices due to a lack of current demand. The main reason came from
India, where high levels of stock, reduction of state subsidies and
depreciation of the rupee against the dollar led to a significant
reduction in imports. Importers in other regions changed their
procurement tactics to just satisfy the current demand, playing on
the falling market. Average DAP/MAP quotes for the three
quarters of 2013 fell by 14.7 % compared with the previous year,
reaching $481 / ton (FOB, The Baltic Sea). Low market activity is
expected until the end of the year and in the first quarter of 2014.
Sales
Comparative sales
figures of the URALCHEM Group for the nine months of 2013-2012
(thousand tonnes):
Name of product
|
9 months of 2013
|
9 months of 2012
|
Year-on-year change,%
|
Ammonium nitrate and its derivatives
|
1,642.3
|
1,576.0
|
4%
|
Urea
|
868.1
|
904.1
|
-4%
|
Ammonia
|
504.3
|
503.0
|
0%
|
Phosphate fertilizers
|
375.2
|
345.7
|
9%
|
NPK fertilizers
|
455.6
|
464.0
|
-2%
|
Other chemicals, including ammonium nitrate for
industrial use
|
579.7
|
564.4
|
3%
|
Total
|
4,425.2
|
4,357.2
|
2%
|
Financial
Situation
Cash
generated from operating activities in the first nine months of 2013
amounted to 13.14 bln RUB, compared to 14.71 bln RUB in the same
period of 2012.
As
at 30 September 2013, the Company's net debt amounted to 23.531 bln
RUB. The weighted average interest rate of the loan portfolio in the
first nine months of 2013 equalled 4.5% annually compared to 5.8%
annually during the same period in 2012.
For
more information, please visit the Company web site
http://www.uralchem.com
or use the following contact information:
Public
Relations Department
URALCHEM,
OJSC
Tel:
+7 (495) 721 89 89
URALCHEM
is one of the largest producers of nitrogen and phosphate fertilizers
in Russia and the CIS with production capacities of over 2.5 million
tonnes of ammonium nitrate, 2.2 million tonnes of ammonia, 0.8
million tonnes of MAP and DAP, 0.8 million tonnes of complex
fertilizers and 0.5 million tonnes of urea. URALCHEM is the second
largest ammonium nitrate producer in the world and number one in
Russia. URALCHEM's key production assets include Kirovo-Chepetsk
Chemical Works, OJSC in Kirovo-Chepetsk, Kirov region; Azot, OJSC in
Berezniki, Perm region; Voskresensk Mineral Fertilizers, OJSC in
Voskresensk, Moscow region.
Some
of the information in this press release may contain projections or
other forward-looking statements regarding future events or the
future financial performance of URALCHEM. We wish to caution you that
these statements are only predictions. We do not intend to update
these statements and our actual results may differ materially from
those contained in our projections or forward-looking statements,
including, among others, the achievement of anticipated levels of
profitability, growth, cost and synergy of our recent acquisitions,
the impact of competitive pricing, the ability to obtain necessary
regulatory approvals and licenses, the impact of developments in the
Russian economic, political and legal environment, financial risk
management and the impact of general business and global economic
conditions.
[1]
The decline in net profit was due to the revaluation of the Company’s
share in Minudobrenia (Perm) carried out in 2012, as well as to the
negative impact of the difference in exchange rates in 2013 compared
with 2012 (see Appendix).
Annex
to the press release about the unaudited financial results for the
first half of 2013
EBITDA
is a profit / loss from financial and economic activities during the
reporting period, before deduction of income tax on profits, income
and interest costs, depreciation and amortization. "Adjusted
EBITDA" is EBITDA for the reporting period before goodwill,
profit / loss from associates, profit / loss on foreign exchange
differences arising on financial performance and profit / loss on
operations with derivative financial instruments. Adjusted EBITDA is
operating profit before depreciation and amortization and financial
results of operations with derivative financial instruments. In
accordance with International Financial Reporting Standards ("IFRS"),
depreciation and amortization are included in cost structure, and in
the selling, general and administrative expenses. IFRS does not
require the disclosure and does not describe the calculation of
EBITDA and adjusted EBITDA, among other financial indicators, so they
can not substitute for net profit for the period when evaluating the
results of operations or the measure of cash provided by operating
activities when evaluating liquidity. Approach to the calculation of
EBITDA and adjusted EBITDA, as described earlier, may not coincide
with the approaches used by other companies, therefore, comparability
may be limited. We believe that EBITDA and adjusted EBITDA provide
useful information to investors because they are indicators of the
stability and efficiency of our business and our ability to fund
discretionary spending such as capital expenditures, the acquisition
of subsidiaries and other investments, as well as indicators of our
ability to incur and service debt. IFRS classifies depreciation and
amortization to operating costs, while in fact they are distributed
to the current period non-cash expenses for the acquisition or
creation of fixed assets, incurred in previous periods, and are not
affiliated with the movement of funds.
Calculation
of EBITDA for the first nine months of 2013 and for the first nine
months of 2012 (mln RUB)
|
9 months of 2013
|
9 months of 2012
|
|
Net profit
|
10,082.9
|
18,818.2
|
|
Add:
Income tax
Interest and other financial income
Interest and other financial costs
Amortisation
|
|
|
1,744.2
|
2,977.9
|
|
(558.6)
|
(364.9)
|
|
1,746.0
|
1,870.9
|
|
2,690.1
|
2,455.7
|
|
Gain of associates
|
(17.9)
|
(12.3)
|
|
Gain on change
in fair value
of the share in
the associate
|
0
|
(4,940.8)
|
|
Foreign exchange loss (gain) from financing
activities
|
1,628.3
|
(1,254.9)
|
|
Adjusted EBITDA
|
17,315.0
|
19,550.0
|
|
