PhosAgro’s net profit for the first quarter decreased by 33.2%, to 18.8 billion rubles

The PhosAgro group, one of the world’s largest producers of phosphate-containing fertilizers, reported on Monday evening a decrease in net profit under IFRS for the first quarter of 2024 compared to the same period in 2023 by 33.2%, to 18.754 billion rubles.

Revenue for the reporting period amounted to 119.272 billion rubles, an increase of 2.7% compared to the same period last year against the backdrop of increased production volumes and sales of commercial products. The company’s EBITDA amounted to 39.06 billion rubles (minus 29.5%), free cash flow — 1.8 billion rubles, entering the positive zone compared to the previous quarter. 

Production of agrochemical products in the first quarter increased by 6.9% and amounted to a record 3.01 million tons: the main increase came from an increase in the production of phosphate fertilizers and feed phosphates by 9.2%, to 2.26 million tons. Total fertilizer sales increased year-on-year by 11.4%, exceeding 3 million tons; sales growth in phosphorus-containing fertilizers and feed phosphates amounted to 16%.

The growth in revenue is mainly due to an increase in production and sales of phosphate fertilizers, which became possible after the completion of investment projects as part of the long-term development strategy. In turn, the decrease in EBITDA compared to the same period last year is explained by lower sales prices for fertilizers on world markets and the payment of export duties introduced in 2023.

Free cash flow in the first quarter entered the positive zone, the company notes, but during the quarter it was under pressure from such factors as a higher level of capital investment compared to 2023, payment of export customs duties, as well as the use of funds for the formation of working capital. The latter was due to the replenishment of fertilizer stocks in the trader’s warehouses before the start of the spring season and an increase in product sales to Latin America.

The successful implementation of a long-term development program and large-scale capital investments — a record 73 billion rubles are planned for investments in 2024 — contribute to the achievement of new production records: the company believes that the current growth rates allow us to count on achieving a new production record at the end of the year and overcoming the milestone of 11. 5 million tons.

The company also reported that the information on financial results was reviewed by the board of directors, inviting shareholders to choose one of three options to determine the amount of dividends: at the rate of 165 rubles per ordinary share, 234 rubles per ordinary share, 309 rubles per ordinary share — either abstain or vote against each of them.

“The board of directors recommended setting July 11, 2024 as the closing date of the register for receiving dividends. The annual general meeting of shareholders, which will consider this issue, will be held on June 30, 2024 in absentia,” the company clarified.

The PhosAgro group includes Apatit (Cherepovets), its branches in Kirovsk, Balakovo and Volkhov, as well as a number of other assets. The family of businessman Andrei Guryev controls about 48.5% of the company’s shares, the wife of the rector of the St. Petersburg Mining University Vladimir Litvinenko, Tatyana Litvinenko, controls 20.6% of the shares.