PhosAgro has announced its operational results for 1H17. Its overall fertilizer production grew by 8.8% year-on-year to almost 4 million t, while sales increased by 11.8% year-on-year to 4.1 million t.
In 2Q17, downstream production of fertilizers grew by 15.7% year-on-year, or 4.1% quarter-on-quarter, to 2.04 million t, which was supported by a healthy increase of over 20% year-on-year, or 4.9% quarter-on-quarter, in the output of phosphate-based products, to 1.65 million t. Production of nitrogen-based fertilizers in 2Q17 was virtually unchanged year-on-year and quarter-on-quarter, standing at 0.4 million t.
Total fertilizer sales reached almost 2.1 million t in 2Q17, up by 15% year-on-year and 3.8% quarter-on-quarter, while the sale of phosphate-based products grew by 13.2% year-on-year to over 1.6 million t. The sale of nitrogen-based products expanded by 21.9% year-on-year, to 0.43 million t.
Commenting on the 2Q17 operational results, PhosAgro CEO, Andrey Guryev, said: “Our long-term strategy continues to prove its ability to secure PhosAgro’s solid operational performance through market cycles, thanks to a focus on production and sales flexibility, as well as organic growth through debottlenecking and modernisation.
In terms of product mix, PhosAgro saw 9 – 12% year-on-year growth in sales of NPK/NPS/PKS crop nutrients and concentrated DAP/MAP fertilizers. The increase in concentrated fertilizer sales was supported by a 25% year-on-year growth in MAP sales, driven by demand from the Russian and Brazilian markets.
Russia remains a priority market for PhosAgro’s, and the company’s domestic sales in 1H17 increased by more than 20% year-on-year, supported by improved sales of MAP, NPK and ammonium nitrate. Despite overall consumption for the Russian market remaining nearly flat, the growth in sales serves as confirmation of the success of the company’s approach of being closer to end customers with a strong domestic distribution network.
Looking at priority export markets, PhosAgro has achieved more than 60% year-on-year growth in shipments to Brazil, as well as nearly doubling volumes to CIS countries other than Russia. Sales of phosphate-based fertilizers to Europe grew by 14% year-on-year in 1H17.
In terms of global seaborne markets in 1H17, PhosAgro saw further expansion of its export-oriented capacities in the MENA region, with the continued ramp-up of new units in Morocco, as well as growth in export volumes from China. The export of phosphates from China grew by almost 25% year-on-year in the period.
Brazilian imports of phosphates grew by nearly 40% year-on-year, which was partially offset by some delay in the high buying season in India due to uncertainties related to changes in the tax system that were only resolved at the end of June.
Guryev concluded by highlighting the company’s key investment projects – the construction of new ammonia and granulated urea units – are on schedule. The ammonia unit is already running in trial mode and is expected to be fully operational in September/October.