Moscow — PhosAgro Group ("PhosAgro" or "the Company") (Moscow Exchange, LSE: PHOR), a Russian vertically integrated company that includes one of the world’s leading phosphate-based fertilizer producers, today announces its operating results and consolidated financial results for the full year ended 31 December 2024.
FY 2024 highlights
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In FY 2024, production of agrochemical products grew 4.3% year-on-year to 11.8 million tonnes, driven mainly by a 5.8% increase in the production of phosphate-based fertilizers and feed phosphates, to 8.9 million tonnes.
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Total sales of agrochemical products in FY 2024 increased by 4.1% year-on-year to 11.9 million tonnes, while sales of phosphate-based fertilizers and feed phosphates rose 6.1%.
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Revenue in FY 2024 amounted to RUB 507.7 billion, an increase of 15.3% year-on-year.
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The Company’s EBITDA for FY 2024 amounted to RUB 177.0 billion, down 3.3% year-on-year.
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Free cash flow for FY 2024 amounted to RUB 29.0 billion.
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As of 31 December 2024, net debt amounted to RUB 325.4 billion, and the net debt/adjusted EBITDA ratio as of the end of the reporting period was a comfortable 1.84x.
* EBITDA is calculated as operating profit adjusted for depreciation and amortization.
** Adj. EBITDA is calculated as EBITDA adjusted for FX differences from operating activities.
*** Adj. net profit is net profit as reported minus FX gain or loss.
Comments on 2024 financial performance
The Company’s revenue grew 15.3% year-on-year in FY 2024, driven primarily by increased production and sales of phosphate-based fertilizers (mainly NPK, which saw sales rise more than 18% year-on-year) and supported by a recovery from the beginning of the year in average sales prices in global markets and exchange rate dynamics.
The Company’s EBITDA for the full year amounted to RUB 177.0 billion, driven by increased sales and higher prices compared with the previous year. At the same time, EBITDA faced pressure from factors such as rising production costs owing to the payment of export duties introduced in 2023, increased consumption of raw materials and higher personnel costs.
EBITDA rose 9.3% quarter-on-quarter in 4Q 2024, reaching RUB 53.5 billion. In addition to increased sales revenue, another factor that had a positive impact on EBITDA was the reduction in export duties at the end of the quarter.
EBITDA margin for FY 2024 was 34.9%, driven by the Company’s highly efficient production assets, increased production of high-margin fertilizers and basic feedstocks as well as its flexible sales policy.
Free cash flow (FCF) in FY 2024 amounted to RUB 29.0 billion, impacted by a planned increase in capital expenditures (associated with the implementation of major investment projects), higher interest expense due to an increase in the Central Bank’s key rate, and cash outflows in the second half of the year to finance working capital (driven by increased shipments to Latin America and longer turnover periods for accounts receivable).
The rating agencies Expert RA and ACRA have assigned the Company their highest-possible credit rating (AAA), a testament to the Company’s solid financial position and its ability service all its debt obligations, including those denominated in foreign currencies, in full and on time.
As of the end of FY 2024, the Company’s debt position remained at a comfortable level. As of 31 December 2024, net debt amounted to RUB 325.4 billion. The increase in net debt during the fourth quarter was mainly due to a reduction in cash reserves following the Company’s year-end payment of declared dividends for 2Q and 3Q 2024. The net debt/EBITDA ratio as of the end of 2024 was 1.84x.
Events occurring after the reporting period that had an impact on the Company’s debt position include the redemption of a USD 500 million Eurobond issue in January 2025. The Company redeemed the bonds in full both domestically and internationally.
Despite the favourable terms available in debt financing markets, the Company plans to prioritize debt repayment this year over refinancing. This measure will help reduce future debt servicing costs and further solidify the Company’s position as a high-grade borrower with strong credit ratings.
Comments on 2024 operating performance
The output of agrochemical products increased by 4.3% in 2024, reaching 11.8 million tonnes, driven by the consistent implementation of the Company’s long-term programme, launched in 2019, to develop its production assets.
Phosphate-based fertilizers accounted for the bulk of the production increase (output of DAP/MAP rose 1.0%; NPK, 23.3%; and MCP, 10.0%). These growth figures were attributed to the fact that the Company’s Volkhov production plant reached its design capacity and to increased production of key feedstocks, such as phosphoric acid and sulphuric acid.
Sales of the Company’s agrochemical products rose 4.1% in 2024, driven by increased production, the strong performance of the Group’s sales network in the Russian market and the solid positions enjoyed by the Company’s products in global markets.
Sales growth was largely driven by a 6.1% year-on-year increase in sales of phosphate-based fertilizers, while the rapid growth in sales three-element fertilizers was due to an increase in sales of agrochemical products in the Company’s priority domestic market.
PhosAgro’s leading position in the Russian market enabled further growth in domestic fertilizer sales in 2024. As a result, total sales of agrochemical products to Russian farmers increased to 3.34 million tonnes.
The markets showing the highest growth rates in terms of shipments in 2024 were Russia, Latin America and Africa.
Fertilizer market in 4Q 2024
Price dynamics in global fertilizer markets were mixed throughout 4Q 2024: prices for phosphate-based and potash fertilizers remained stable, while prices for nitrogen-based fertilizers gradually declined due to oversupply.
Prices for phosphate-based fertilizers have remained stable since mid-2024. Seasonal demand from Latin American markets decreased but was offset by export restrictions in China, which are customary at this time of year. Critically low carryover stocks of DAP fertilizers in India prolonged import demand practically until the end of the year, despite unresolved issues with government support for importers (low subsidies).
The average price for MAP in 4Q 2024 was USD 582 per tonne (FOB Baltic). For the full year, the average price rose to USD 555 per tonne (FOB Baltic), up from USD 517 per tonne (FOB Baltic) in 2023, reflecting stronger demand growth relative to supply in the market for phosphate-based fertilizers throughout 2024.
Prices for nitrogen-based fertilizers in Q4 2024 faced pressure from excess supply in the market owing to the early end of seasonal demand in South America and weak seasonal activity in Europe. However, robust domestic urea sales in India and lower carryover stocks led to the announcement of major tenders late in the year, boosting optimism for market growth in late Q4 2024 and early 2025.
The average price of urea in 4Q 2024 was USD 319 per tonne (FOB Baltic). For the full year, the average price was USD 300 per tonne (FOB Baltic), down slightly from the 2023 average of USD 309 per tonne (FOB Baltic), reflecting a slight surplus in the market due in part to India’s reduced imports during the year and seasonal fluctuations in other markets.
Outlook for 1Q 2025
Growth in seasonal demand in Europe, Central America and North America will shape conditions in mineral fertilizer markets as a whole. Declining carryover stocks across all fertilizer types in India combined with a lack of Chinese exports will provide additional price support.