LONDON, March 30, 2017 /PRNewswire/ --
Key results for investors since IPO:
- Fertilizer production capacity growth of over 50%;
- PhosAgro GDRs included in MSCI Russia and other indexes;
- Lowest cash cost of production for phosphate-based fertilizers worldwide (since the IPO, direct cash cost per tonne of DAP has declined 1.8 times);
- PhosAgro's free float has increased from 10.7% to over 25%;
- EBITDA margin of approximately 40%, which remains an unreachable goal for most of the largest and integrated phosphate-based fertilizer producers;
- Increased market capitalisation.
Plans for next five years:
- Expand production capacities by 20% to 8.7 million tonnes by 2020, following the launch of new ammonia and urea production facilities in 2017;
- Further development of mining and beneficiation operations at Apatit;
- Modernise sulphuric and phosphoric acid production capacities by 2018;
- Construct new ammonium sulphate capacity;
- Further improve the sales and marketing system, including developing the brand and entering new markets;
- Increase fertilizer grade assortment from current 33 to 40-50 by 2020.
PhosAgro (Moscow Exchange, LSE: PHOR), one of the world's leading vertically integrated phosphate-based fertilizer producers, today held its Capital Markets Day in London, where the Company's achievements since its IPO in 2011 and plans to 2020 were discussed.
PhosAgro CEO Andrey Guryev said: "Since our IPO in 2011, we believe we have created significant value for our shareholders thanks to our strategy of organic growth by construction of new and modernisation of existing production capacities, as well as optimisation and increasing the efficiency of business processes.
"Our production capacity during this period increased by 50% to 7.4 million tonnes of fertilizers and feed phosphates. This includes 37% growth in phosphate-based fertilizers on the back of relatively small capital expenditure of just USD 95 million, or around USD 59 per tonne of additional capacity. This represents 5%-10% annual growth in fertilizer production, while remaining the lowest cash cost producer of phosphate-based fertilizers in the sector.
"While increasing production capacities, we have strictly adhered to workplace health and safety, as well as environmental protection requirements, using the newest technologies available to decrease our impact on the environment. In addition, UNESCO chose us as a partner for implementation of initiatives in the area of green chemistry.
"Looking beyond our investment programme and fulfilling the promises we made to investors during the IPO, we remain a socially responsible company that commits significant resources to social and charity programmes in the regions where we operate, with a focus on long-term sustainability. We invest in preparing highly-qualified engineering staff capable of working at our high-tech production lines, and we develop programmes to retain highly-qualified, results-oriented employees. Another area of focus has been introduction of best practices in corporate governance and transparency, increasing the liquidity of our GDRs and shares, and improving the Company's reputation among investors. PhosAgro's free float has increased to 25% since the IPO, and its GDRs were included in the MSCI Russia and other indexes.
"We see increasing interest in the Company among the investment community, which is the best rating of the work of management and the Board of Directors.
"We do not plan to rest on our laurels, and will continue to implement our strategy: this year the company will complete the biggest investment programme in its history, with the launch of ammonia production (annual capacity of 760 thousand tonnes) and granulated urea (annual capacity of 500 thousand tonnes) at PhosAgro-Cherepovets. Completion of these two large-scale investment projects in 2017 is expected to enable PhosAgro to increase its production capacity by another 20% by 2020, up to 8.7 million tonnes, which will help us to expand our presence on key markets and to strengthen our leading position in the global phosphate-based fertilizer sector. At the same time, our domestic market, which holds significant potential for growth even after PhosAgro increased sales twofold to 2.1 million tonnes in recent years, remains a key priority."
Notes to Editors
PhosAgro is one of the leading global vertically integrated phosphate-based fertilizer producers. The Company focuses on the production of phosphate-based fertilizers, feed phosphate and high-grade phosphate rock (P2O5 content of not less than 39%).
The Company is the largest phosphate-based fertilizer producer in Europe, the largest producer of high-grade phosphate rock worldwide and the third largest MAP/DAP producer in the world (excluding China), according to Freetown. PhosAgro is also one of the leading producers of feed phosphates (MCP) in Europe, and the only producer in Russia. It is Russia's only producer of nepheline concentrate.
PhosAgro's main products include phosphate rock, 33 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.