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URALCHEM, OJSC Reports IFRS Financial Results for the First Quarter of 2014

June 3, 2014 staronepr Leave a comment

URALCHEM, OJSC, the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen fertilizers in Russia, announced its IFRS financial results for the first quarter of 2014.

Moscow, Russia (May 30, 2014)

• Revenue decreased to 19.4 bln RUB, compared to 20.8 bln RUB in January-March 2013.
• Operating profit amounted to 5.3 bln RUB, compared with 6.7 bln RUB in January-March 2013.
• Adjusted EBITDA comprised 6.2 bln RUB, compared to 7.6 bln RUB in January-March 2013.
• Adjusted EBITDA margin amounted to 32%, compared to 37% in January-March 2013.

URALCHEM, OJSC (hereinafter URALCHEM or the Company), the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen fertilizers in Russia, announced its IFRS financial results for the first quarter of 2014.

Revenue for the first quarter of 2014 decreased by 7% to 19.4 bln RUB, compared to 20.8 bln RUB in January – March, 2013. Operating profit amounted to 5.3 bln RUB (23% of revenue) compared with the operating profit of 6.7 bln RUB (32% of revenue) in the first quarter of 2013.

Adjusted EBITDA comprised 6.2 bln RUB, compared to 7.6 bln RUB, a decrease of 18%. The adjusted EBITDA margin for the first quarter of 2014 amounted to 32% of revenue, compared with 37% of revenue for the first quarter of 2013.

The negative net profit is the result of so-called paper losses. The bulk of the company’s debt is denominated in dollars, and following the sharp rise in the foreign exchange rate in the first quarter of 2014, the company has recognized a foreign exchange loss from financing activities to the amount of 13.56 billion roubles in the reporting period. Of this amount, 13 billion roubles is the exchange difference on the loans, on which there have been no real cash flows. Sharp fluctuations in exchange rates have a significant effect on the net income indicator. For example, movement of the dollar exchange rate in the opposite direction in April and May provided for positive exchange rate differences on the same loans to the total of about 6.5 billion roubles.

In addition, the financial result from operations includes foreign exchange loss in the amount of 957 million roubles arising on intercompany liability, while the corresponding gain is reflected directly in the statement of changes in equity. If these exchange differences were netted off, EBITDA could reach 7.15 billion roubles and its margin would be 37%.

Thus, against the background of declining global prices for major fertilizers, in the first quarter of 2014, URALCHEM showed the sustainability of its business model. Whilst its financial performance was lower in absolute terms, the company has maintained high margins (profitability) and continued to generate a stable positive cash flow. In response to market trends, the company has increased production and sales of key products, ammonium nitrate and its derivatives, as well as continued its efforts to improve the efficiency of business processes, to increase productivity and profitability and to reduce operating costs.

Markets

The first quarter is traditionally a period of significant market activity and prices are being supported by strong demand in premium markets, the US and Europe. However, despite the rise in prices in the first half of the quarter, the average values of quotes were lower than in the first quarter of 2013. In the second and third quarters of 2014 the market expects oversupply associated with the start of Chinese exports. The main demand during the period is expected from South Asia and Latin America, ie regions in which the price is traditionally low. The volume of demand is assessed as insufficient to absorb all available supplies from China and the Middle East. As a result of the oversupply, price cuts will inevitably lead to a halt in production in regions with high costs, including Europe and the CIS.

In January, the activity in ammonia markets stayed low. Quotes based on FOB Yuzhnyi Port remained around 410 to 430 dollars/tonne. In February, prices for ammonia in the ports of the CIS began to rise, which continued until the end of the quarter. Gazprom’s announcement about cancellation of discounts on natural gas prices increased interest in purchasing in the Yuzhnyi Port; the lack of available supplies in Trinidad heightened interest of US importers in purchasing in the CIS. The main growth in demand was due to the start of direct application of ammonia and increased requirements for raw materials from producers of phosphate fertilizers. In March, prices reached 474 dollars/tonne. However, in general, for the quarter the prices amounted to 438 dollars/tonne, which is 22.2 % lower than a year before.

The greatest activity for urea during the quarter was shown in US, Europe and Brazil. The US entered the purchasing season with low stocks. In January, prices in the US rose by 21% and the rapid rise in prices in the United States resulted in an increase in prices in the major sources of shipment: in the Port of Yuzhnyi by 15%, in Egypt also by 15%, in the Middle East by 16%. Prices were also supported by a lack of free product in North Africa and the Middle East. However, beginning with the last week of January, the market trend changed. The devaluation of the Turkish lira and the Brazilian real impeded imports from these countries and by the end of the quarter, prices returned to January levels. The average quotes for urea FOB Baltics in March totalled 314 dollars/tonne. The average urea price for the quarter was $330/tonne, which is 14.3 % lower than a year before.

January and February marked steady growth of quotations for ammonium nitrate caused by deficiency of the product available for export, due to the supply to the Russian domestic market. FOB Baltics quotes grew from $300/tonne up to $320/tonne. But from the beginning of March there was change in the trend due to lower domestic demand. In general, during the first quarter of 2014 quotes amounted to $308/tonne, which is 8.6% lower than a year before.

In the segment of phosphate fertilizers (MAP/DAP) average quotations (FOB Black Sea) for the first quarter of 2014 amounted to $469 dollars/tonne, which is 6% lower than a year before. Since mid-March, demand in this segment declined markedly; importers, relying on high inventories, put off new purchases in anticipation of more lucrative offers. In the second quarter, market participants expect lower prices.

Financial Situation

Cash generated from operating activities in the first quarter of 2014 amounted to 5.6 bln RUB, compared to 5.06 bln RUB in the first quarter of 2013.

As at 31 March 2014, the Company’s net debt amounted to 163.11 bln RUB. The debt burden increased after the Company received a loan from VTB Capital to finance the purchase of 19.99% of shares in OJSC “Uralkali”, which as at 31 March 2014 amounted to 146,01 bln RUB

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
Email: pr@uralchem.com
Web: http://www.uralchem.com

URALCHEM, OJSC is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.8 million tonnes of ammonia, 2.5 million tonnes of ammonium nitrate, 1.2 million tonnes of urea and 0.8 million tonnes of phosphate and compound fertilizers per year. URALCHEM, OJSC ranks first in Russia for production of ammonia and ammonium nitrate, and second for the production of urea. 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.

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URALCHEM, OJSC Reports IFRS Financial Results for the Year 2013

April 24, 2014 staronepr Leave a comment

Revenue for 2013 reached 72.15 bln RUB, operating profit amounted to 16.5 bln RUB. Against the background of adverse market developments, the company managed to strengthen its leadership in the nitrogen segment, by showing an increase in production and sales of key products.

Moscow, Russia (April 24, 2014)

• Revenue decreased to 72.15 bln RUB, compared to 75.33 bln RUB in 2012.
• Operating profit amounted to 16.5 bln RUB, compared with 22.73 bln RUB in 2012.
• Adjusted EBITDA comprised 20.12 bln RUB, compared to 25.99 bln RUB in 2012.

URALCHEM, OJSC (hereinafter URALCHEM 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 audited IFRS financial results for the year 2013.

Dmitry Konyaev, CEO of URALCHEM, OJSC, commented on the Company’s results for the year 2013, “2013 proved to be a difficult year for fertilizer manufacturers. The decline in world prices affected the financial results of all the major players in the industry and URALCHEM was no exception. Against the background of adverse market developments, we worked actively to improve the efficiency of business processes, to increase productivity, profitability and to reduce operating costs. We managed to strengthen our leadership in the nitrogen segment, by showing an increase in production and sales of key products. Thanks to its chosen strategy, URALCHEM has continued to maintain a leading position among Russian producers in terms of margins, with the EBITDA margin at 28% in 2013.”

Financial Results

Revenue for 2013 decreased by 4% to 72.15 bln RUB, compared to 73.33 bln RUB in 2012. Operating profit amounted to 16.5 bln RUB (23% of revenue) compared with the operating profit of 22.73 bln RUB (30% of revenue) in 2012.

Adjusted EBITDA reached 20.12 bln RUB, compared to 25.99 bln RUB in 2012, a decrease of 23%.

The adjusted EBITDA margin for 2013 comprised 28% of revenue, compared with 34% of revenue for 2012.

Markets

In 2013, the global fertilizer market was affected by a number of unfavourable factors. Among them were the reduction of fertilizer subsidies in India and the depreciation of regional currencies in the countries of South and Southeast Asia, the leading importers of mineral fertilizers. During the year Thai baht and Indian rupee lost 10% against the US dollar. On the Brazilian and Turkish markets (traditionally important for the Russian fertilizer exports), the real and the lira decreased by 15% and 19% against the US dollar, respectively. Restructuring of potash sales and a deficiency of natural gas for the nitrogen sector in Egypt, South-East and South Asia, and Latin America also added to the uncertainty.

As a result, continuing high demand for fertilizers under worsening general macroeconomic conditions was not supported by solvency of the major importers. This was reflected in falling prices of the major fertilizers and created the prerequisites for a general decline in prices in the short and medium terms. China’s increasing role as a supplier of fertilizers, coupled with the expectation that the country’s costs will remain stable (or even reduce slightly) will significantly constrain other producers’ opportunities to increase prices, even seasonally. The US move away from the import of nitrogen products to domestic production will increase competition in other regions and will also put additional pressure on prices.

The price of ammonia FOB Yuzhny Port during 2013 decreased from US $600 per tonne in January to US $385 to US $425 per tonne in December. The main factors influencing the negative trend in world prices for ammonia were: a drop in demand from Indian manufacturers of fertilizers, moderate demand from industrialized countries in Asia, the weakening of phosphate fertilizer market and lower prices for urea. During the same period, ammonia deficit increased in the countries of Southeast Asia, Europe and Latin America, which gave rise to the need for additional purchases of fertilizers from other regions. Also in 2013, industrial demand for ammonia remained high.

The price of urea FOB Yuzhny Port decreased by 24% during the reporting period to US $312 per tonne compared with US $408 per tonne in 2012. The most significant factor in the reduction in prices was the rise of China in the export markets, while the cost of production of urea in China significantly decreased due to the decrease in coal prices.

Steady growth of quotations of ammonium nitrate at the beginning of the year was replaced by a fall in mid-March. In late May prices stabilized, helped by repair works at plants in the CIS. By the end of the 2nd quarter, prices in the CIS received support from the industrial segment. Since the end of September, prices for ammonium nitrate started to restore due to the reduction of exports from Ukraine and the early-season purchases in the domestic markets of the CIS. During 2013 quotes for ammonium nitrate averaged $287 tonne, which was 6% lower than a year earlier (FOB Baltic).

In the phosphate fertilizers segment there was global decline in prices due to a lack of current demand. The main factor for the price reduction was a sharp drop in import demand in India due to the accumulation of significant reserves of phosphate and compound fertilizers in the country. Increased stocks were the result of low phosphorus usage in 2012 due to the drought that hit the country during the application season. Also, a significant reduction in imports was brought about by lower government subsidies and depreciation of the rupee against the dollar. At the same time, on the expectation of falling prices, importers in other regions adopted a policy of procurement to meet current needs only. The price of phosphate fertilizers on the basis of FOB Tampa averaged US $443 per tonne in 2013, which was 17.4 % lower than in 2012.

Financial Situation

Cash generated from operating activities in 2013 amounted to 14.47 bln RUB, compared to 20.63 bln RUB in 2012.

As at 31 December 2013, the Company’s net debt amounted to 148.997 bln RUB. The increased size of the debt is largely due to a loan of 126.27 bln RUB which the Company obtained from VTB Capital to finance the purchase of 19.99% of shares in OJSC “Uralkali” in December 2013.

The Company’s US dollar-denominated loan portfolio amounts to more than 140.89 bln RUB. The weighted average interest rate of the loan portfolio in dollars equals 3.7% annually.

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
Email: pr@uralchem.com
Web: http://www.uralchem.com

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, OJSC Reports IFRS Financial Results for the First Nine Months of 2013

December 12, 2013 staronepr Leave a comment

Despite the difficult market conditions, the company maintained its revenues at the level of 2012. Thanks to its chosen strategy, URALCHEM has continued to maintain a leading position in the industry in terms of margins, with the EBITDA margin at 32%.

Moscow, Russia (December 11, 2013)

– 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.

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*.

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.

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
Email: pr@uralchem.com
Web: http://www.uralchem.com

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.

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 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.

-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
E-Mail: pr@uralchem.com

Business

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the year 2012

March 12, 2013 staronepr Leave a comment

– Revenue increased to US $ 2,423 million, compared to US $ 2,080 million in 2011.
– Operating profit increased to US $ 734 million, compared with US $ 659 million in 2011.
– Adjusted EBITDA grew to US $ 839 million, compared to US $ 750 million in 2011.
– Net profit amounted to US $ 665 million, compared with US $ 445 million in 2011.

Moscow, Russia (March 12, 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, published its audited IFRS Financial Statements for the year 2012.

Dmitry Konyaev, CEO of URALCHEM, OJSC (a Russian holding company of the Group), commented on the 2012 results, “Thanks to the programmes for the modernization of production facilities, which we have successfully implemented in recent years, as well as our efforts to improve the management of the company, the year 2012 was a success for URALCHEM Holding. During the year, we maintained an optimal balance of production, oriented towards current demand, which allowed us to be responsive to the needs of the market. These factors enabled the company to show good operational and financial performance over the past year.”

Financial Results

Revenue for the year 2012 grew to US $ 2,423 million, compared to US $ 2,080 million in 2011. Operating profit amounted to US $ 734 million, or 30% of the revenue, compared with the operating profit of US $ 659 million, or 32% of the revenue in 2011. Net profit for the year 2012 amounted to US $ 665, compared to US $ 445 million in 2011.

During the year 2012, adjusted EBITDA reached US $839 million, compared to US $750 million the year before, a rise of 12%. Adjusted EBITDA margin for the year 2012 comprised 35% of the revenue compared with 36% of the revenue for the year 2011.

Markets

After the fall of the price of ammonia in the first quarter due to lower demand from industrial consumers, prices started to recover in late March and early April. This recovery occurred due to the delayed launch of new facilities and close-down repairs at a number of major enterprises in the Middle East, as well as restrictions on the supply of gas in Trinidad. The same factors determined growth in prices during the second and third quarters. In the fourth quarter, there was a decline in prices associated with the reduction in demand from the industrial consumers in the US, Asia, and North Africa. Over the year, average prices for ammonia on the basis of FOB Yuzhny port grew by 5.2% compared to the same period in 2011.

The urea market remained relatively stable in the first half of the first quarter. However, a sharp rise in prices began later, due to high demand in the United States, backed by demand in Latin America and India. In the second half of the second quarter, prices fell due to the end of seasonal demand in the Northern Hemisphere. During the third quarter, prices were relatively stable, with a tendency to growth towards the end of the quarter, due to increased demand in major markets, which coincided with the closure of a number of CIS and the Middle East facilities for repairs. In the fourth quarter, prices fell due to low buying activity. Overall, in the second half of the year the market was under pressure from massive Chinese exports. As a result, the average price of prilled urea on the basis of FOB Yuzhny port decreased by 3.5% compared to 2011.

The prices of ammonium nitrate in 2012 basically followed the dynamics of the urea price. The price increase in the first quarter was driven by demand in the domestic market of the CIS. Until the middle of the second quarter, prices grew mainly due to the support from price of urea. From the middle of the second quarter, prices fell under the influence of the seasonal decrease in demand and also the pressure of prices for urea. In the third quarter, prices were relatively stable. Near the end of the quarter there was a strong growth in prices due to the lack of available products as a result of a number of enterprises switching to the production of commercial ammonia, as well as due to increased demand in the domestic market of the CIS. Falling prices in the first half of the fourth quarter is associated with pressure from the price of urea. From the middle of the quarter, there was a recovery in prices for ammonium nitrate in the ports of the CIS because of redistribution of the product to the domestic market, as well as switching of production to the manufacture of ammonia. Overall for the year 2012, there was a 2% decline in the prices of ammonium nitrate in the ports of CIS compared to the average price in 2011.

During the first quarter, the price of phosphate fertilizers slightly decreased due to the extremely low market activity. In the second quarter, the signing of the Indian contracts stabilized prices. During the quarter, the market showed a moderate recovery due to demand in Latin America and a number of “niche” markets. The third quarter was characterized by stable prices and low market activity. By the end of the quarter there was a tendency to a slight decrease in prices due to lack of demand in the South Asian markets and the purchasing tactics used by Latin American buyers based on current needs. In the fourth quarter, the downward trend in prices continued. The main reason for the decline in prices remained a lack of demand from South Asia, the low demand activity in Latin America, as well as increasing export supply from the US due to the end of the phosphate season. In 2012 the price of phosphate fertilizers in the CIS ports decreased by more than 12% compared to the average price in 2011.

Sales

Against the background of steady high demand for the Group’s fertilizers in Russia and abroad, the sales in 2012 rose by 18% compared to 2011, amounting to a total of 5,796 thousand tons. Sales of urea increased by 128%, sales of commercial ammonia grew by 50%.

Financial Situation

Due to the increase in revenue, cash generated from operating activities amounted to US $669 million for the year 2012, compared to US $523 million the year before.

On 31 December 2012, the Company’s net debt amounted to US $830 million compared to US $931 million at the end of the previous year. The weighted average interest rate in the loan portfolio of the Group for the year 2012 amounted to 5.2% annually compared to 5.9% annually for the year 2011.

-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
E-Mail: pr@uralchem.com

Business

URALCHEM HOLDING P.L.C. Reports the First Nine Months of Year 2012 Unaudited IFRS Financial Results

November 16, 2012 staronepr Leave a comment

URALCHEM HOLDING P.L.C. announced its unaudited IFRS financial results for the first nine months of 2012 ending 30 September 2012.

(Moscow, Russia – November 16, 2012) – Revenue increased to US $1,804 million, compared to US $1,556 million in the first nine months of 2011.
– Operating profit increased to US $553 million, compared to US $487 million in the first nine months of 2011.
– Adjusted EBITDA grew to US $632 million, compared to US $560 million in the first nine months of 2011.
– Net profit amounted to US $600 million, compared to US $318 million in the first nine months of 2011.

URALCHEM HOLDING P.L.C. (hereinafter URALCHEM HOLDING or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter called the Group), one of the largest producers of nitrogen and phosphate fertilisers in Russia, announced its unaudited IFRS financial results for the first nine months of 2012 ending 30 September 2012.

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the results for the first nine months of 2012: “During nine months of this year the Company showed steady improvement of its financial performance compared to the results for the same period of 2011. To this contributed the acquisition earlier this year of another production unit, Minudobrenia, located in Perm and rising world prices for our main products, ammonia and urea. Looking back at the first nine months, we are optimistic about the full-year results for 2012.”

Financial Results

Revenue in the first nine months of 2012 grew to US $1,804 million, compared to US $1,556 million in the first nine months of 2011. Operating profit amounted to US $553 million compared with operating profit of US $487 million in the first nine months of 2011. Operating profit margin amounted to 31% both in the first nine months of 2012 and in the same period of the previous year.

In the first nine months of 2012, net profit amounted to US $600 million, compared with US $318 million in the same period in 2011.

In the first nine months of 2012 adjusted EBITDA reached US $632 million compared to US $560 million for the same period last year, an increase of 13%. Adjusted EBITDA margin in the first nine months of 2012 comprised 35%, compared with 36% in the first nine months of 2011.

Markets

During the third quarter of 2012, price dynamics for fertilizers and intermediate products were different.

Prices for ammonia in the third quarter showed a significant increase due to growing demand and limited supply. During these three months, the price level rose by $50 / t, and reached $650 / t FOB Port of Yuzhny by the end of September.

In the absence of a strongly marked trend, the urea market was characterized by high volatility. Prices have not shown any significant increase or noticeable reduction, remaining within the limits of $360 to $400 / t FOB the ports of the CIS.

Ammonium nitrate prices mainly matched the dynamics of urea prices during the third quarter.

The global market for phosphate fertilizers in the third quarter of 2012 showed low levels of activity. In September, there has been a downward trend in prices amid a lack of demand in South Asia (India, Pakistan).

Sales

As the demand for the Group’s products both in Russia and abroad was high and stable, the volume of sales in the first nine months of 2012 increased by 16% compared to the same period in 2011 and totalled 4,357 thousand tonnes for all products. Sales of urea, increased by 144%, largely contributed to the rise. Due to high demand in the ammonia market, sales of ammonia increased by 54%, while sales of ammonium nitrate decreased by 6%. Sales of “other chemicals” increased by 19%, mainly due to increased sales of ammonium nitrate for industrial use in the domestic market.

Financial Situation

Increased revenues contributed to the increase of cash generated from operations to US $472 million in the first nine months of 2012 rise, compared to US $330 million in the same period last year.

As at September 30, 2012 the Company’s net debt amounted to US $945 million. The weighted average interest rate in the loan portfolio during the first nine months of 2012 comprised 5.8% per annum compared to 7.9% in the same period last year.

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 fertilisers 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 fertilisers 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 fertilisers 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, Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk, Moscow region.

Business

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

August 3, 2012 staronepr Leave a comment

Moscow, Russia – August 03, 2012 — (For Immediate Release)

– Revenue increased to US $1,261 million, compared to US $1,035 million in H1 2011
– Operating profit increased to US $410 million, compared with US $288 million in H1 2011
– Adjusted EBITDA grew to US $462 million, compared to US $337 million in H1 2011
– Net profit amounted to US $444 million, compared with US $266 million in H1 2011

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 fertilisers in Russia, announced its unaudited IFRS financial results for the six months ended 30 June 2012.

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the results for the first half of 2012, “We achieved good financial results in the first half of this year compared to the same period in 2011. EBITDA increased by more than one-third, sales grew by 18% and reached 3 million tons. The good performance was driven by situation on the urea and ammonium nitrate markets, which was favourable for us, as well as acquisition of Minudobrenia OJSC and our own efforts aimed at improving the efficiency of enterprises, the modernization of production and our responsiveness to changing market needs.”

Financial Results

Revenue for the first half of 2012 grew to US $1,261 million, compared to US $1,035 million in the first half of 2011. Operating profit amounted to US $410 million, or 33% of the revenue, compared with the operating profit of US $288 million, or 28% of the revenue in the first half of 2011.

Net profit for the first half of 2012 amounted to US $444 million, compared to US $266 million in the first half of 2011.

During the first half of 2012, adjusted EBITDA reached US $462 million, compared to US $337 during the same period last year, a rise of 37%. Adjusted EBITDA margin for the first half of 2012 comprised 37% of revenue compared with 33% of revenue for the first half of 2011.

Markets

During the second quarter of 2012 prices of mineral fertilisers and semi-products showed significantly different dynamics. Ammonia prices began to recover due to high demand and limited supply. During the second quarter the price grew by $150/t and by the end of June it reached $600/t FOB at the Yuzhny port.

Prices for urea increased until mid-May and surpassed the peak figures of 2011. Since mid-May there was a significant decline in prices due to low activity of buyers. In late June – early July, the urea market began to show signs of recovery.

Prices for ammonium nitrate repeated the dynamics of the urea market and grew rapidly until mid-May. However, the second half of the quarter was characterized by falling prices for the product, which was also due to low purchasing activity.

The global market of phosphate fertilisers was in the process of recovery during the second quarter of 2012. Due to strong demand in Latin America, spot prices recovered, despite the launch of Chinese products on the market. Market participants are forecasting a stable outlook for the third quarter of the year.

Sales

In the first six months of 2012 the Group’s product sales grew by 18% compared to the same period in 2011 and totalled 3 million tons. Due to the acquisition of OJSC Minudobrenia, Perm, sales of urea and ammonia increased significantly, by 117% and 61% respectively.

Financial Situation

Cash generated from operating activities in the first half of 2012 amounted to US $342 million compared with US $194 million in the first half of 2011.

On 30 June 2012, the Company’s net debt amounted to US $991 million. Interest expenses in the first half of 2012 decreased by US $23 million or 36% compared to the same period last year.

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 fertilisers 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 fertilisers 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 fertilisers 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, Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk, Moscow region.

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.

-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
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.