PhosAgro Reports Operating and Financial Results for 1Q 2023

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MOSCOW , May 18, 2023 (press release) –

Moscow. 18 May 2023. PhosAgro (“PhosAgro” or “the Company”) (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers, today announces its consolidated interim condensed financial results for the three months ended 31 March 2023.

1Q 2023 highlights

In 1Q 2023, production of mineral fertilizers and other chemicals increased by 6.1% year-on-year to over 2.8 million tonnes. The phased ramp-up to design capacity of the production complex in Volkhov, launched as part of the Company’s comprehensive long-term development programme, made this growth possible.

Total fertilizer sales in 1Q 2023 increased by 1.5% year-on-year to more than 2.7 million tonnes. At the same time, while sales of phosphate-based fertilizers (the Company’s main product) remained essentially flat year-on-year, sales of nitrogen-based fertilizers rose by 6.1% compared with 1Q 2022 on the back of seasonal demand, driven mainly by an almost twofold increase in sales of ammonium sulphate.

Revenue for 1Q 2023 decreased by 35.7% year-on-year and amounted to RUB 116.2 billion (USD 1.6 billion). The decrease in revenue was due to a drop in global fertilizer prices from their highs in early 2022, when a high degree of uncertainty and sanctions pressure on Russia (the biggest player in the global fertilizer market) led to speculation, driving up prices for all types of fertilizers.

At the same time, the Company’s quarterly revenue rose by 5.5% compared with 4Q 2022, driven by an increase in production and sales at a time of relatively stable prices.

The Company’s adjusted EBITDA amounted to RUB 49.0 billion (USD 0.67 billion) in 1Q 2023, which was lower year-on-year, while adjusted EBITDA margin was 42.2%. Adjusted EBITDA increased by 10.1% from 4Q 2022.

In 1Q 2023, the Company’s adjusted free cash flow reached RUB 43.4 billion (RUB 0.6 billion), up 29.0% year-on-year and nearly double the figure from 4Q 2022.

Net debt as of 31 March 2023 amounted to RUB 142.4 billion (USD 1.85 billion), while the net debt/adjusted EBITDA ratio was 0.62x as of the end of the quarter.

Financial and operating highlights




Financial highlights

RUB mln

1Q 2023

1Q 2022

Change %

4Q 2022

Change %


116 178

180 678


110 104



55 395

87 672


58 441



48 978

86 992


44 470


Adj. EBITDA margin






Net profit

28 059

43 462


19 214


Adj. net profit***

33 897

59 253


32 099


Free cash flow

43 419

-3 061


22 756


Adj. free cash flow****

43 419

33 668


22 756



31 March 2023

31 December 2022




Net debt

142 435

180 338














Operating highlights

Production volumes by category


1Q 2023

1Q 2022

Change, %

4Q 2022

Change, %

Phosphate-based fertilizers and feed phosphates

2 070,3

1 957,4


2 040,1


Nitrogen-based fertilizers






Other products






TOTAL fertilizers

2 811,8

2 651,3


2 807,4


Sales volumes by category


1Q 2023

1Q 2022

Change, %

4Q 2022

Change, %

Phosphate-based fertilizers and feed phosphates

2 016,7

2 010,7


2 012,8


Nitrogen-based fertilizers






Other products






TOTAL fertilizers

2 742,3

2 700,8


2 671,8



RUB/USD exchange rates: average 1Q 2023 rate: 72.7738; average 1Q 2022 rate: 86.0693; as of 31 March 2023: 77.0863; as of 31 December 2022: 70.3375.
* * EBITDA is calculated as operating profit adjusted for depreciation and amortisation.
** Adj. EBITDA is EBITDA as reported minus FX differences from operating activities.
*** Adj. net profit is net profit as reported minus FX gain or loss.
**** Free cash flow adjusted for the amount of cash and cash equivalents written off as a result of the loss of ownership of foreign companies.

The Company’s high margins in 1Q 2023 were driven not only by increased production and sales but also by cost optimisation in the form of reduced spending on sulphur, ammonia and especially ammonium sulphate.

Although the Company continues to diversify its sales structure, securing the interests of the rapidly growing domestic market remains its top priority. While meeting seasonal demand, PhosAgro fully addressed Russian farmers’ needs for high-quality fertilizers and also increased sales to India and Latin America at the same time.

The Company’s robust operating performance was reflected in increased free cash flow, which was driven by a reduction in working capital, among other things.

Thanks to its strong performance in 1Q 2023, the Company is in an excellent financial position, as reflected by the AAA credit ratings (the highest possible) received from two major Russian rating agencies – Expert RA and ACRA. As of 31 March 2023, the Company’s net debt had decreased to RUB 142.4 billion, and its net debt/adjusted EBITDA ratio was 0.62x. In addition, it should be noted that, as of the end of the quarter, the Company had cash on hand for the payment of dividends declared for 2022 in the amount of RUB 465 per ordinary share. The dividends were paid out in April 2023.

Among other highlights in terms of debt management, the successful redemption of USD 500 million in Eurobonds in late April 2023 is worth noting. The Eurobonds were refinanced including through two issues of exchange-traded bonds (RMB 2 billion and RUB 20 billion) which had previously been successfully floated on Moscow Exchange. The redemption of the Eurobonds was completed through a separate payment scheme that was agreed with all the bondholders and entered in the payment documentation in the second half of 2022.

Market situation in 1Q 2023

The situation in global mineral fertilizer markets in 1Q 2023 was marked by weakening demand for all types of fertilizers, driven by high stocks in key markets amid a downward price trend.

Residual demand in India and pre-season purchases in Brazil supported the market for phosphate-based fertilizers at the beginning of the year, while demand in Western Europe and North America remained weak. The average price for MAP in 1Q 2023 was USD 606 per tonne (FOB Baltic).

The off-season in South America (Brazil), delays in a significant tender in India and increased competition among major suppliers in other sales areas drove a downward price trend in the market for nitrogen-based fertilizers. The average price of urea in 1Q 2023 was USD 319 per tonne (FOB Baltic). Export prices for ammonium nitrate remained relatively high as a result of seasonal shipments to the domestic market. The average price of ammonium nitrate in 1Q 2023 was USD 323 per tonne (FOB Baltic).

Weak demand in fertilizer markets also drove down prices for major commodities. The average price of sulphur in 1Q 2023 was USD 77 per tonne (FOB Baltic); the average price of potassium chloride was USD 443 per tonne (FOB Baltic). Prices for phosphate feedstocks remained stable at USD 300 per tonne (FOB Morocco) as of the end of 1Q 2023 (for feedstocks with P2O5 content of 31%–33%).

Market outlook

The beginning of the second quarter was marked by continued low demand for fertilizers in key markets, due to the end of the spring season in the Northern Hemisphere and the off-season in key markets in Asia and South America. The decrease in prices for fertilizers in 1Q 2023 helped make them more affordable (in terms of the cost of fertilizer in relation to a basket of basic agricultural products), which will help stabilise future prices in fertilizer markets. In addition, the second quarter has seen a rise in seasonal demand in markets in India, Brazil and Southeast Asia, which should also have a positive impact on prices.



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