PJSC PHOSAGRO - PhosAgro Fertilizer Output up 19% y-o-y in 3Q 2017

“With our major investment projects completed, PhosAgro’s strategy will continue to focus on organic growth, which we believe is the most effective way to navigate the current market environment while remaining fully ready to shift into high gear as soon as the market cycle turns upward, with no significant burden on the Company’s balance sheet.

“Our sales strategy, which is based on the principle of ‘moving closer to our end customers’ is also a cornerstone of our long-term strategy, and is the best way for PhosAgro to capture value as we grow production volumes and maintain the flexibility to adjust to agricultural producers’ changing fertilizer usage trends. We believe that our expanded portfolio of fertilizer grades, coupled with growing volumes and exceptionally high quality fertilizers that are virtually free from potentially harmful heavy metals and other impurities, make PhosAgro crop nutrients the ‘natural’ choice for farmers and food consumers around the world in light of growing concerns about the quality of fertilizers and potential impact on human health.”

Sales overview

• In 3Q17 Sales of both complex NPK/NPS/PKS crop nutrients and concentrated DAP/MAP saw similar 12% year-on-year growth. Demand for DAP/MAP was supported by more than 25% year-on-year growth in MAP sales, primarily to the Russian and CIS markets.
• Russia remains a priority market for the Company; PhosAgro’s domestic sales in 9M 2017 increased by almost 20% year-on-year and have already exceeded 2.1 million tonnes. Overall, our domestic market accounted for almost 35% of total sales in the first nine months of 2017. According to the Russian Association of Fertilizer Producers, total fertilizer sales in Russia grew by only 5% year-on-year.
• Sales to CIS countries other than Russia grew by more than 60% year-on-year, while volumes to North America more than doubled. Sales of phosphate-based fertilizers to Europe grew by 17% year-on-year during 9M 2017. Russia and Europe remain two of the key priority markers for the Company

Market overview

• In 3Q17 export-oriented capacities expanded with the ramp-up of Ma’aden’s new capacity coupled with further growth in exports from China. However, the export of phosphates (DAP/MAP/NP/TSP) from China grew by 20% year-on-year in 3Q 2017, which represents a slowdown from the 30% year-on-year increase seen in 6M 2017.
• On the demand side, Brazilian imports of phosphates were resilient in 3Q 2017, growing by 80% year-on-year (in P₂O₅ content), while MAP and NP imports increased by 60% and 80% year-on-year, respectively. According to preliminary data, DAP imports into India for 9M 2017 were down by 20% year-on-year and amounted to 3.1 mln tonnes.

Outlook

• Looking ahead to the rest of 2017 and the beginning of 2018, significant inflation in main feedstock prices (ammonia and sulphur), growth in coal prices in China (the main feedstock for ammonia production), and tighter environmental regulation in China should protect market prices against additional supply coming from new units at OCP and Ma’aden, while a decrease in inventories in India this year should result in demand emerged earlier than usual in 2018.

The table below provides a breakdown of production volumes by major product:

The table below provides a breakdown of sales volumes by major product:

* Excluding intra-group sales 

** Excluding feedstock

For further information please contact: 

PJSC PhosAgro
Alexander Seleznev, Head of Investor Relations
ir@phosagro.ru
+7 495 232 96 89 ex 21 87

Timur Belov, Press Officer
Anastacia Basos, Deputy Press Secretary
+7 495 232 9689

EM
Sam VanDerlip
vanderlip@em-comms.com
+44 7554 993 032
+7 499 918 3134

Notes to Editors

PhosAgro (www.phosagro.ru) is one of the world’s leading vertically integrated phosphate-based fertilizer producers in terms of production volumes of phosphate-based fertilizers and high-grade phosphate rock with a P₂O₅ content of not less than 37% (according to IFA, Fertecon and CRU).

The Company is the largest phosphate-based fertilizer producer in Europe, the largest producer of high-grade phosphate rock (with a P₂O₅ content of not less than 37%) worldwide and the third largest MAP/DAP producer in the world, according to IFA. PhosAgro is also one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia. PhosAgro is Russia’s only producer of nepheline concentrate.

PhosAgro’s main products include phosphate rock, over 35 grades of fertilizers, feed phosphates, ammonia, and sodium tripolyphosphate, which are used by customers in 100 countries spanning all of the world’s inhabited continents. The Company’s priority markets outside of Russia and the CIS are Latin America, Europe and Asia.

PhosAgro’s shares are traded on the Moscow Exchange, and global depositary receipts (“GDRs”) for shares trade on the London Stock Exchange (under the ticker PHOR). Since 1 June 2016, the Company’s GDRs have been included in the MSCI Russia and MSCI Emerging Markets indexes.