AMMAN — The Arab Potash Company (APC) has announced that its net profit after taxes, provisions and royalties amounted to JD89 million during the first nine months of 2018, recording an increase of 44 per cent over the same period of last year.
In a statement, APC’s Chairman Jamal Sarayrah said that the profits achieved during the said period coincided with the huge budget allocated for the maintenance of the company’s plants and its infrastructure, necessary for ensuring the continuity of its businesses and operations.
The chairman also explained that potash industry is considered among the capital intensive industries constantly requiring large and periodical capital investments, thus requiring the company to take the necessary precautions to secure sustainable finances for such needed mega-investments, according to the statement.
Sarayrah also said that the profits realised during the first nine months of this year will contribute to securing the necessary liquidity for the company’s expansion projects, including the Dead Sea’s Lisan area project and the southern area, among others, which APC plans to study their economic feasibility, in addition to the current expansion projects that are expected to increase productivity and, consequently, profits and job opportunities as well as the country’s foreign currency reserves.
The chairman explained that the growth in the APC’s profits was also the result of the increase in the potash prices following inking new deals with China and India during the second half of 2018, adding that the company’s plans in finding alternatives to expensive energy sources contributed to reducing production costs significantly and accordingly increasing profit margins which should help the company maintain its profitability during the next years in light of the expected drop in international potash prices.
APC President and CEO Brent Heimann said that it is expected that additional potash supply will enter the international market during 2019 following the entry of new producers, pointing out that the potential incremental supply might put downward pressure on international potash prices and would accordingly affect APC’s profit margin, especially when the company’s production costs are among the highest when compared with other international producers despite its efforts over the past years to reduce production costs.
Heimann said that the volume of potash sold during the first nine months of 2018 has reached 1.8 million tonnes, signalling an increase of 3 per cent from the same period in 2017.
He also said that the leading mining company’s consolidated sales revenues during the first nine months of this year have reached JD350 million, compared with JD312 million in 2017, an increase of 12 per cent, according to the statement.