August 8, 2012
Uralchem''s income rises amid fertiliser market revival
Uralchem Holding plc, the holding company of the Uralchem Group, declared that its unaudited IFRS financial results for the six months ended June 30, 2012 have increased.
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 tonnes. 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 modernisation of production and our responsiveness to changing market needs."
Revenue for the first half of 2012 grew to US US$1,261 million, compared to US US$1,035 million in the first half of 2011. Operating profit amounted to US US$410 million, or 33% of the revenue, compared with the operating profit of US 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 US$444 million, compared to US US$266 million in the first half of 2011.
During the first half of 2012, adjusted EBITDA reached US US$462 million, compared to US 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.
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 US$150/t and by the end of June it reached US$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 characterised 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.
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 tonnes. Due to the acquisition of OJSC Minudobrenia, Perm, sales of urea and ammonia increased significantly, by 117% and 61%, respectively.