-
Revenue increased to US $683 million, compared to US $673 million in
Q1 2012.
-
Operating profit increased to US $220 million, compared with US $178
million in Q1 2012.
-
Adjusted EBITDA grew to US $250 million, compared to US $207 million
in Q1 2012.
-
Net profit amounted to US $161 million, compared with US $354 million
in Q1 2012*.
Moscow,
Russia (May 29, 2013)
-- URALCHEM
HOLDING P.L.C.
(hereinafter URALCHEM Holding or the Company), a Cypriot holding
company of the URALCHEM Group (hereinafter the Group), one of the
largest producers of nitrogen and phosphate fertilizers in Russia,
announced its unaudited IFRS financial results for the first quarter
of 2013.
The
Group’s Key Financial Figures for Q1 2013 and 2012 (US $ million)
|
Q1 2013
|
Q1 2012
|
Year-on-Year
Change, %
|
Revenue
|
683
|
673
|
2%
|
Gross profit
|
392
|
375
|
5%
|
Gross profit margin
|
57%
|
56%
|
2%
|
Operating profit
|
220
|
178
|
24%
|
Operating profit
margin
|
32%
|
26%
|
23%
|
Net profit
(loss)
|
161
|
354
|
-55%
|
Net profit margin
|
24%
|
53%
|
-55%
|
Adjusted EBITDA
|
250
|
207
|
21%
|
Adjusted EBITDA
margin
|
37%
|
31%
|
19%
|
Net cash generated
from operating activities
|
168
|
174
|
-3%
|
_____________
*
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 foreign exchange gain in
2012.
Dmitry
Konyaev, CEO of URALCHEM, OJSC (the Russian holding company of the
Group), commented on the results, "In the first quarter of this
year, URALCHEM increased its revenues and the adjusted EBITDA grew
substantially. This shows how effectively the Company is working.
URALCHEM is still focusing on production of high-margin products
demanded by the market. The first three months of 2013 showed the
sort of results which we had anticipated. This is a positive
testament to our strategy of strengthening our position in the
nitrogen segment."
Financial
Results
Revenue
for the first quarter of 2013 grew to US $683 million, compared to US
$673 million in the first quarter of last year. Operating profit
amounted to US $220 million, or 32% of the revenue, compared with
the operating profit of US $178 million, or 26% of the revenue,
in the first quarter of 2012. Net profit for the first quarter of
2013 amounted to US $161 million, compared to US $354 million in the
first quarter of 2012.
During
the first quarter of 2013, adjusted EBITDA reached US $250 million,
compared to US $207 million the year before, a rise of 19%. The
adjusted EBITDA margin for the first quarter of 2013 comprised
37% of revenue compared with 31% of revenue for the first quarter of
2012.
Revenue,
EBITDA margin and adjusted EBITDA increased during the first quarter
of 2013 as compared to the same period in 2012. The difference in the
net profit is due to revaluation of the Company's share in
Minudobrenia, Perm carried out in 2012 and foreign exchange
differences that showed opposite dynamics in 2013.
Markets
Ammonia
During
the quarter, the price of ammonia was slowly declining. The main
factor determining the price dynamics was the lack of demand in both
the agricultural and the industrial segments. Reduced production of
phosphate fertilizers in North Africa and India resulted in lower
demand for ammonia in these regions. US demand for ammonia for direct
application was satisfied by supplies from Trinidad and from domestic
market. The growth of the industrial segment in East Asia appeared to
be insufficient to cover spot volumes and the demand was met by
contract supplies. Ammonia production in Egypt decreased due to the
limitations of gas supplies for nitrogen production, but at the same
time, capacities utilization in Trinidad increased to 90%.
Urea
At
the beginning of the quarter prices for urea increased rapidly.
Quotes for prilled urea in the Black Sea ports showed growth from
$375/t FOB in early January to $445/t FOB in mid-February. In the
Baltic, the corresponding figures were at $360/t FOB and $430/t FOB.
The most significant factor that determined the dynamics of prices at
the beginning of the first quarter was the shift of the market
balance towards demand.
On
the one hand, the early part of the year is traditionally a period of
high demand from Europe and the USA, and European importers had low
stocks at the start of the purchasing season. On the other hand,
restrictions on the supply of gas to nitrogen production facilities
in Egypt at the beginning of the year led to a substantial reduction
in export supply.
Shortages
of supply of Egyptian urea increased the interest of European buyers
in products from other countries, including the supply of prilled
urea from the CIS. However, from mid-February, there was a reduction
in prices, which continued until the end of the quarter. In the ports
of CIS, price reduction was associated with the sale of long
positions by traders. A decline in prices for ammonium nitrate in
Europe produced additional pressure on the price of urea.
Prices
continued to decline in March due to lower demand in the US and
Europe, caused by the delay in fertilizer application due to adverse
weather conditions. Latin American importers, the biggest buyers of
Russian urea, switched to purchasing for current needs, focusing on
the dynamics of prices. Toward the end of March, supply increased in
the Ukrainian ports in connection with the completion of the season
in that area.
Ammonium
nitrate
Quotes
for ammonium nitrate generally followed the trends in the price of
urea. During January and February there was a steady growth in the
quotations for the product at the ports of the CIS because of the
shortage of the product available for export, due to supplies being
allocated for domestic use. In mid-March the trend changed markedly
due to lower domestic demand.
Phosphate
fertilizers
Until
mid-February, global decline in prices continued due to the lack of
current demand. In February, major suppliers decreased production,
which made it possible to stabilize prices. Then, due to increased
demand in Latin America, prices started to restore. By the end of
March, indicators of export prices in Tampa rose to $515/t FOB
against the lowest prices of $465/t - $475/t FOB. Still, Latin
America remained the single largest source of demand. Indian buyers
refrained from transactions; closed tenders were held, mostly to test
price expectations.
Production
and sales
In
the first quarter of 2013 the fertilizer market was stable and the
Group's products enjoyed strong demand. Volume of production by the
Group's enterprises remained at the level of the first quarter of
last year. A significant portion of production output was sold in
April 2013 due to adverse weather conditions and late start of the
sowing season.
Comparative
production figures of the URALCHEM Holding companies (tonnes):
Name of product
|
Q1 2012, tonnes
|
Q1 2013, tonnes
|
Change, %
|
Ammonium nitrate and its derivatives
|
712 485
|
719 091
|
1%
|
Ammonia
|
205 110
|
215 107
|
5%
|
Urea
|
306 363
|
312 182
|
2%
|
NPK fertilizers
|
131 255
|
135 952
|
4%
|
DAP
|
45 080
|
7 316
|
-84%
|
MAP
|
102 372
|
125 569
|
23%
|
Other types of fertilizers
|
3 766
|
3 977
|
6%
|
Other chemicals
|
73 836
|
64 434
|
-13%
|
Total
|
1 580 266
|
1 583 629
|
0,2%
|
Financial
Situation
Cash
generated from operating activities in the first quarter of 2013
amounted to US $168 million, compared to US $174 million in the first
quarter of 2012.
As
at 31 March 2013, the Company's net debt amounted to US $801 million.
The weighted average interest rate of the loan portfolio in the first
quarter of 2013 equalled 4.6% annually compared to 5.8% annually
during the same period last year.
-Ends-
For
more information, please visit the Company web site
http://www.uralchem.com
or use the following contact information:
PR
department
URALCHEM,
OJSC
Tel:
+7 (495) 721 89 89
URALCHEM
HOLDING P.L.C. is a holding company of the URALCHEM Group, which
includes four fertilizer manufacturing facilities in Russia. URALCHEM
Group is one of the largest producers of nitrogen and phosphate
fertilizers in Russia and the CIS with production capacities of over
2.5 million tons of ammonium nitrate, 2.8 million tons of ammonia,
0.8 million tons of MAP and DAP, 0.8 million tons of complex
fertilizers and 1.2 million tons of urea per year. URALCHEM Group is
the second largest ammonium nitrate producer in the world and
number one in Russia, the second largest producer of nitrogen
fertilizers in Russia. URALCHEM Group's key production assets include
Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC
Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch
in Kirovo-Chepetsk, Kirov 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.
Annex
to the press release about the unaudited financial results
for the first
quarter 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 Q1 2013 and for Q1 2012 (Thousands of US dollars)
|
Q1 2013
|
Q1 2012
|
Net
profit
|
160 992
|
354 154
|
Add:
Income
tax
Interest
income
Interest
costs
Amortisation
|
|
29 797
|
37 292
|
(854)
|
(9 384)
|
16 644
|
21 258
|
30 142
|
28 833
|
| (Gain)/loss
of associates |
170
|
160
|
| Gain on change
in fair value
of the share in
the associate |
-
|
(153,458)
|
Foreign exchange gain from financing activities
|
13 292
|
(72 120)
|
EBITDA
|
250 183
|
206 735
|
