Tag Archives: fertilizers

URALCHEM Manufactured 4.49 Million Tons of Products in January-September 2013

October 31, 2013 staronepr Leave a comment

Production from all enterprises of the URALCHEM Group during the first nine months of 2013 amounted to 4.49 tons. This is a 2% increase compared with the same period last year.

Moscow, Russia (October 31, 2013) — Production from all enterprises of the URALCHEM Group during the first nine months of 2013 amounted to 4.49 tons. This is a 2% increase compared with the same period last year.

The production of ammonium nitrate and its derivatives amounted to 2.03 million tons, up 7% over the same period last year. The output of complex fertilizers increased by 1%, to 468.4 thousand tons. The production of commodity ammonia decreased by 3%, to 562.6 thousand tons. Urea production decreased to 851.4 thousand tons, which is 1% less than in January-September 2012. Production of phosphate fertilizers (MAP / DAP) decreased by 5%, to 333.3 thousand tons.

“On the whole, URALCHEM’s enterprises showed stable performance, increasing production through the upgrade of its units and increasing their efficiency. URALCHEM took the market situation fully into account and continued to ramp up production in its key nitrogen segment, placing emphasis on the most popular products,” said Dmitry Konyaev, CEO of URALCHEM, OJSC.

In the third quarter of 2013, the situation in the global fertilizer market was unfavourable for producers. The market for phosphate fertilizers suffered an especially significant drop in demand and prices. At the same time, the situation in nitrogen market is more stable.

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PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com
Web: http://www.uralchem.com

URALCHEM, OJSC is one of the largest producers of nitrogen and phosphate fertilisers in Russia and the CIS with production capacities of over 2.5 million tonnes of ammonium nitrate, 2.8 million tonnes of ammonia, 0.8 million tonnes of MAP and DAP, 0.8 million tonnes of complex fertilisers and 1.2 million tonnes of urea. URALCHEM, OJSC is the second largest ammonium nitrate producer in the world and number one in Russia, the second largest producer of nitrogen fertilisers in Russia. Key production assets of URALCHEM, OJSC 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 Fertilisers, 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.

Business

URALCHEM Joins as New Member of International Plant Nutrition Institute

September 28, 2013 staronepr Leave a comment

URALCHEM joined as a member company of the Inter-national Plant Nutrition Institute (IPNI) at the Board of IPNI Director’s Meeting held on September 24 in Montreal, Quebec, Canada.

Moscow, Russia (September 27, 2013) — URALCHEM joined as a member company of the Inter-national Plant Nutrition Institute (IPNI) at the Board of IPNI Director’s Meeting held on September 24 in Montreal, Quebec, Canada. Mr. Dmitry Konyaev, CEO and Tatiana Rozarenova, Head of the Client and Regu-latory Relations Division were elected to represent URALCHEM as members of the Board.

“Our membership welcomes the decision of URALCHEM to join IPNI and we are honored and encouraged by this extension of our primary support base,” said IPNI President Dr. Terry L. Roberts. “The addition of new members directly impacts IPNI’s scientific and educational programs that are designed to contribute to the advancement of agronomic science, world food security and environmental protection.”

“URALCHEM is an innovative-minded company, investing actively in the R&D field. We are therefore pleased to become a member of a leading scientific organization that brings forward agro-chemical science. Combining our research efforts will improve efficient solutions for the responsible manufacturing, as well as for use of fertilizers in order to meet the growing global demand for agricultural products”, said Dmitry Konyaev.

IPNI membership is another good indication of the URALCHEM’s commitment to being a responsible producer, along with participation in International Responsible Care Programme, supervised by UNO, registering chemical substances with the European Chemicals Agency and getting certification with Fertiliser Industry Assurance Scheme (FIAS) in the UK.

The International Plant Nutrition Institute (IPNI) is a global organization dedicated to research and promotion of information about the importance of scientific use of fertilizers for plant nutrition. Members of IPNI are composed of companies that are large producers of one or more of the major plant nutrients. International and national associations of fertilizer manufacturers and leading global agrochemical research centres are affiliate members of IPNI.

PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com
Web: http://www.uralchem.com

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Business

URALCHEM Adds 300 Units to its Fleet of Rail Cars

September 19, 2013 staronepr Leave a comment

URALCHEM OJSC is increasing by 300 its own fleet rail cars for the transportation of mineral fertilizers and liquid ammonia.

Moscow, Russia (September 19, 2013) — URALCHEM OJSC is increasing by 300 its own fleet rail cars for the transportation of mineral fertilizers and liquid ammonia. URALCHEM-TRANS (part of the URALCHEM group) will operate the new cars, along with the rest of URALCHEM’s rolling stock. The cars will be acquired through capital lease agreements, with the participation RB Leasing, LLC. The transaction value exceeds 700 million roubles.

Of the 300 cars purchased, 200 mineral wagons and 100 tank cars are manufactured in Russia. All the cars will be transferred to URALCHEM-TRANS in September and October 2013 and will be used to replace an existing fleet that is being retired. Since the end of 2012, URALCHEM-TRANS’ rolling stock has increased by 500 new cars. Today, the total number of cars under the management of URALCHEM-TRANS is around 8.5 thousand units.

The Director of URALCHEM-TRANS, Vsevolod Kovshov commented: “The planned renovation and expansion of the fleet is one of our key areas of work to ensure the safety of the logistics of the company. The new deal allows us to increase the share of our own rolling stock in the fleet in accordance with the strategic objectives of the Group. The new rolling stock will be used to replace leased, obsolete and worn out cars.”

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PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com
Web: http://www.uralchem.com

Business

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Six Months of 2013

August 19, 2013 staronepr Leave a comment

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 six months of 2013.

Moscow, Russia (August 19, 2013)

– Revenue increased to US $1,292 million, compared to US $1,261 million in H1 2012.
– Operating profit amounted to US $394 million, compared with US $410 million in H1 2012.
– Adjusted EBITDA comprised US $452 million, compared to US $462 million in H1 2012.
– Net profit amounted to US $253 million, compared with US $444 million in H1 2012*.

Dmitry Konyaev, CEO of URALCHEM, OJSC (the Russian holding company of the Group), commented on the Company’s results in the first half of 2013, “The overall global market situation has been less favourable for fertilizer producers in 2013 compared to last year. This trend is very likely to continue in the second half of this year. Along with the continuing rise in the cost of raw materials, this situation creates conditions for the further decline in the financial performance of the leading manufacturers of mineral fertilizers. Thanks to its strategy, URALCHEM is continuing to hold a leading position in a number of financial and operational indicators. In the first half of 2013, URALCHEM maintained its sales volume at the level of the first half of 2012 and increased revenues by 2%. In addition, as a result of early repayment of loans to the amount of US $300 million we were able to reduce the Company’s debt to a record low of US $787 million, as well as to withdraw from collateral all of the Group’s property. Net debt currently amounts to US $676 million”.

Financial Results

Revenue for the first six months of 2013 grew to US $1,292 million, compared to US $1,261 million last year. Operating profit amounted to US $394 million, or 31% of the revenue, compared with the operating profit of US $410 million, or 32% of the revenue, in the first half of 2012. Net profit amounted to US $253 million, compared to US $444 million in the first six months of 2012.

During the first half of 2013, adjusted EBITDA reached US $452 million, compared to US $462 million in the first half of the year before, a decrease by 2%. The adjusted EBITDA margin for the first six months of 2013 comprised 35% of revenue compared with 37% of revenue for the same period in 2012.

The main difference in the dynamics of the net profit compared to the other results is due to the fact that the results in 2012 included the revaluation of the Company’s share in Minudobrenia, Perm.

Markets

During the first half of the year, the price of ammonia was declining. The main factor determining the price dynamics was the lack of demand in the agricultural and the industrial segments. Lower demand in the agricultural segment was due to the late start of the sowing season in the Northern Hemisphere. Lack of demand in the industrial segment was caused by reduced production of phosphate fertilizers in North Africa and India.

Urea prices showed significant growth in the beginning of the year due to active procurement in Europe and North America, which coincided with a limited supply of product from Egypt, forcing buyers to look for alternative sources. However, from mid-February to the end of June prices have been decreasing, mainly due to lack of demand. In Europe and the US slowdown in demand was attributed to the late start of the sowing season. Latin American importers were putting off purchases, monitoring the changes in the situation. Additional pressure on prices was created by the accumulation of large stocks of products at Chinese ports, in anticipation of the period of low export duties, which began on 1 July.

During January and February there was a steady growth of quotations for ammonium nitrate. In mid-March, due to the pressure from urea prices, the trend changed. By mid-May, prices for ammonium nitrate decreased by $100/t, compared with the maximum prices registered in the middle of the first quarter. At the end of May, prices stabilized with repair works carried out at that time at CIS plants being one of the factors that contributed to this stabilization. By the end of the second quarter, prices in the CIS were supported by the industrial segment.

Until the middle of the first quarter, global decline in prices for phosphate fertilizers continued due to the lack of current demand. The decrease of production by major suppliers together with increased demand in Latin America stabilized prices. At the same time, Latin America remained the single largest source of demand. Indian buyers refrained from transactions. Since the beginning of the second quarter the decline was caused by the reduction of subsidies in India, the delays of purchases in the US domestic market due to the weather conditions, devaluation of currencies of major importing countries, such as Brazil and India, and policy of procurements to the current needs adopted by importers in other regions lead to oversupply in market and decrease in prices.

Production and sales

Volume of production by the Group’s plants increased by 1%, sales of commercial products of the Group remained virtually unchanged.

Financial Situation

Cash generated from operating activities in the first half of 2013 amounted to US $320 million, compared to US $342 million in the same period of 2012.

As at 30 June 2013, the Company’s net debt amounted to US $676 million. The weighted average interest rate of the loan portfolio in the first six months of 2013 equalled 4.7% annually compared to 5.2% 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:

PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com

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.

Business

URALCHEM Increased Production in the First Half of 2013

July 15, 2013 staronepr Leave a comment

Production from all enterprises in the URALCHEM group of companies amounted to 3.14 million tons in the first half of 2013. Output increased by 0.7% compared to the same period last year.

Moscow, Russia (July 15, 2013) — Production from all enterprises in the URALCHEM group of companies amounted to 3.14 million tons in the first half of 2013. Output increased by 0.7% compared to the same period last year.

Production of ammonium nitrate reached 1.42 million tons, an increase by 1% over the same period last year. Ammonia production increased by 1% to 412 thousand tons. Urea production rose to 613.8 thousand tons, which is 2% more than in the first six months of 2012. Output of complex fertilizers (NPK) increased by 1% to 293.2 thousand tons. Production of phosphate fertilizers (MAP / DAP) decreased by 3% to 245.2 thousand tons.

Dmitry Konyaev, CEO of URALCHEM, OJSC, commented on the results for the first half of 2013, “As a result of ongoing projects to improve production efficiency, URALCHEM is continuing to increase output of its key nitrogen products, thereby maintaining a leading position among Russian manufacturers. During the period, the dynamics of phosphate fertilizer production reflected the overall situation on the global market for mineral fertilizers. The continuing low consumer activity in Asian countries, especially in India, has led to a global decline in the prices for phosphate fertilizers. URALCHEM’s wide range of products allows us to respond flexibly to changes in the market. The company continues to expand its product portfolio and has now entered a new niche, that of water-soluble fertilizers. These high-margin products are the fastest growing segment of today’s global market.”

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PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com
Web: http://www.uralchem.com

Business

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Quarter of 2013

May 29, 2013 staronepr Leave a comment

URALCHEM HOLDING P.L.C., a Cypriot 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 quarter of 2013.

Moscow, Russia (May 29, 2013)

– 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*.

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.

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.

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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
E-Mail: pr@uralchem.com

Business

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Quarter of 2012

May 31, 2012 staronepr Leave a comment

URALCHEM HOLDING P.L.C. announced its unaudited IFRS financial results for the first quarter of 2012 ending 31 March 2012.

Moscow, Russia – May 31, 2012 — (For Immediate Release)

– Revenue increased to US $673 million, compared to US $566 million in Q1 2011.
– Operating profit increased to US $178 million, compared with US $160 million in Q1 2011.
– Adjusted EBITDA grew to US $207 million, compared to US $186 million in Q1 2011.
– Net profit amounted to US $354 million, compared with US $174 million in Q1 2011.

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the first quarter of 2012 results, “I am pleased with the Company’s results in the first quarter of this year. We are moving ahead as planned. Net profit in the first quarter of 2012 more than doubled compared to the same period last year. This happened due to the acquisition of Minudobrenia in Perm, as well as the reassessment of our share in the enterprise. Besides, the net profit figure was influenced by a considerable reduction in interest expenses on loans which became possible after we refinanced the loan portfolio last year.”

Financial Results

Revenue for the first quarter of 2012 grew 19% to US $673 million, compared to US $566 million in the first quarter of 2011. Operating profit amounted to US $178 million, or 26% of the revenue, compared with the operating profit of US $160 million, or 28% of the revenue in the first quarter of 2011.

Net profit for the first quarter of 2012 more than doubled, amounting to US $354 million, compared to US $174 million in the first quarter of 2011. Without the reassessment of the Company’s share in Minudobrenia, Perm the net profit growth comprised 15%.

During the first quarter of 2012, adjusted EBITDA reached US $207 million, compared to US $186 million the year before, a rise of 11%. Adjusted EBITDA margin for the first quarter of 2012 comprised 31% of revenue compared with 33% of revenue for the first quarter of 2011.

Markets

In the first quarter of 2012 the prices of fertilizers and intermediates showed significantly different dynamics. Prices for ammonia at the Yuzhny port fell to $70 / t due to low demand, both in agriculture and industry, which coincided with the launch of Qafco V. Market recovery began only in late March.

During January to early February the urea market repeated its dynamics in 2011. However, in mid-February a rapid increase in the price of urea started due to high demand in the U.S. The late Q1/early Q2 price level approached peak figures ??of 2011 even surpassing them at certain markets. Prospects for market development in the second quarter remain optimistic for market participants.

Prices for ammonium nitrate were stable during the first quarter due to high volumes of domestic market shipments.

The global market of phosphate fertilizers in the first quarter of 2012 was characterized by low activity, with prices going down slightly. European demand was limited due to severe weather conditions and financial instability. Moderate recovery in prices occurred in late Q1 due to higher demand in Latin America and the U.S. domestic market.

Sales

In the first quarter of 2012 the Group’s product sales amounted to 1.7 million tons, up 20% compared to the first quarter of 2011. Through the acquisition of OJSC Minudobrenia, Perm in January 2012, sales of urea and of ammonia increased significantly.

Financial Situation

Cash generated from operating activities grew by 4%, from US $167 million in the first quarter of 2011 to US $174 million in the first quarter of 2012.

On 31 March 2012, the Company’s net debt amounted to US $1,076 million. The weighted average interest rate in the loan portfolio for the first quarter 2012 decreased to 5.85% compared to annual 8.0% for the same period last year.

Annex to the press release about the unaudited financial results for the first quarter of 2012

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.

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
E-Mail: pr@uralchem.com

Business

URALCHEM Achieved Record Financial and Operating Results in 2011

March 27, 2012 staronepr Leave a comment

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the year ended 31 December 2011.

Moscow, Russia – March 26, 2012 — 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 audited IFRS financial results for the year ended 31 December 2011.

Dmitry Konyaev, CEO of URALCHEM, OJSC (a Russian holding company of the Group), commented on the 2011 results: “With the favorable market conditions in 2011 the Group achieved record financial and operating results. The volume of marketable production reached 5 million tons, which is in excess of the planned figures. The acquisition of Minudobrenia, Perm will strengthen the Group’s position in the nitrogen segment and will allow it to produce 18% to 20% of domestic urea. Thus, URALCHEM can now become the second largest urea producer in Russia.”

Financial Results

Revenue for the year 2011 grew to US $ 2,080 million, compared to US $ 1,389 million in 2010. Operating profit amounted to US $ 661 million, or 32% of the revenue, compared with the operating profit of US $ 205 million, or 15% of the revenue in 2010. Profit for the year amounted to US $ 445 in 2011, compared to US $ 35 million in 2010.

During the year ended 31 December 2011, adjusted EBITDA reached US $ 752 million, compared to US $ 309 million the year before, a rise of 143%. Adjusted EBITDA margin for the year 2011 comprised 36% of revenue compared with 22% of revenue for the year ended 31 December 2010.

Markets

The urea market dynamics during the period January to September 2011 were significantly different compared to the same period in 2010; the traditional weakening of the market in the 1st quarter was replaced by a sharp rise in prices, which continued throughout the 2nd quarter and amounted to almost $ 200 / t. Then, after a brief downward correction, prices were restored and stabilized in the range of $ 480 – $ 500 / t FOB Yuzhny port. The main reason for the sharp rise in prices was the imbalance between limited supply and the strong demand from the markets in Asia, Latin America and Africa. In the 4th quarter there was a seasonal slump in prices. The situation was determined by high levels of stocks by traders and producers, as well as by the suppliers’ desire to sell their long positions before the Christmas and New Year holidays.

The ammonium nitrate market during the first half of the year basically repeated the dynamics of urea market. However, during the third quarter, because of the effect of lower demand in all major markets, the prices of ammonium nitrate significantly decreased – back to the level of the beginning of the year. During August – September there were price fluctuations within the range of $ 310 – $ 330 / t FOB CIS. In the fourth quarter the decline in prices for ammonium nitrate was mainly due to pressure from the price of urea.

Since the beginning of 2011, the global market of phosphorus fertilizers was characterized by stable shortages that arose due to the decrease in supply from major sources. Prices increased steadily and in September 2011 reached the level that exceeded the same period the year before by 33%. Large volumes of imports of phosphate fertilizers to South Asia and Latin America during the period from the first to the third quarter 2011 allowed large amounts of stocks to accumulate, which led to the decrease in prices in the fourth quarter.

The NPK market in 2011 basically repeated the dynamics of phosphates.

Sales

Against the background of steady high demand for mineral fertilizers in Russia and abroad for most of 2011, the Group’s sales rose by 7% compared to 2010, amounting to a total of 4,920 thousand tons. Sales of urea increased by 18%, sales of phosphate fertilizers grew by 10%. Sales of “other chemicals” increased by 55% due to the increase of sales of ammonium nitrate for industrial use, as well as launch of export sales of new products.

Financial Situation

Due to the increase in revenue, cash generated from operating activities amounted to US $ 525 million for the year ended 31 December 2011, compared to US $ 135 million for the same period the year before.

On 31 December 2011, the Company’s net debt[2] amounted to US $ 930.8 million. The weighted average interest rate in the loan portfolio for the year ended 31 December 2011 amounted to 6.35% compared to 9.07% for the year ended 31 December 2010.

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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
pr@uralchem.com

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. 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.