Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined and the largest nitrogen fertilizer producer in the Middle East and North Africa region, today reported a Q1 2024 revenue of $552 million.

 

The company's adjusted EBITDA was $223 million, and adjusted net profit $119 million, it said.

 

In Q1 2024, ammonia prices retreated from their levels in Q4 2024 on easing supply disruptions and lower gas prices compared to the previous quarter, while urea prices were impacted by mixed trends due to favourable weather incentivising demand in North America coinciding with delayed planting in Europe, as well as lower-than-expected tender uptake in India, partially offset by healthy demand in other key regions including Brazil and Australia, it said.

 

Ahmed El-Hoshy, CEO of Fertiglobe, commented: "We are pleased to report a strong quarter, marked by a 5% year-on-year increase in our own-produced sales volumes, driven by higher production and lower ending inventories, which led to a 22% and 1% increase in ammonia and urea own-produced sales volumes, respectively. This demonstrates continued efforts by our manufacturing and commercial teams to prioritize our key strategic objectives, paving the way for further operational milestones over the course of the year, by capitalising on our robust in-house capabilities and logistics footprint. 

 

"It is worth noting that these results were delivered in an environment of market volatility and softer prices in Q1, on lower crop and energy prices as well as reduced imports from India and Europe, coupled with an improved supply situation with recent curtailments being reversed," El-Hoshy said.

 

Fertiglobe has continued to make good progress on its cost optimisation programme, having achieved 60% of its $50 million run rate target implemented by the end of March 2024, and remains on track to realise the full target by the end of 2024. In addition, there is potential to generate at least $100 million in incremental annual EBITDA by the end of 2025 compared to 2023, driven by improved production and energy efficiency within its ongoing Manufacturing Improvement Plan (MIP), the company said.

 

Together, these two initiatives have potential to generate ~$150 million of incremental EBITDA by the end of 2025, representing an approximately 15% increase compared to 2023.

 

In addition, Fertiglobe remains firmly focused on technology, innovation and digitalization, and is investing in the integration of Artificial Intelligence (AI) throughout its operations to unlock value, enhance efficiencies, and reduce emissions. The company is harnessing data integration and predictive analytics applications to support business objectives by improving the performance of equipment, processes, and facilities, while also implementing AI-powered analytics at its sites to enhance safety and reliability.

 

El-Hoshy concluded: “I would like to extend my sincere appreciation to our exceptional team, whose dedication has been instrumental in our achievements. Their unwavering commitment to safety and excellence has been pivotal in our transformation into a leading global enterprise, which is about to embark on an exciting new chapter of growth and value creation following Adnoc’s acquisition of OCI's 50% equity stake, which will take Adnoc's ownership to a majority 86.2%. Together, we have immense confidence in Fertiglobe's ability to continue passing milestones and setting new standards for our industry.”

 

Dividends and capital structure

As of 31 March 2024, Fertiglobe reported a net debt position of $743.4 million, implying net debt / LTM adjusted EBITDA of 0.8x, which allows the company to balance future growth opportunities and dividend pay-out, supported by robust free cash generation and a healthy balance sheet. 

 

In April 2024, Fertiglobe shareholders approved the H2 2023 dividend of $200 million, equivalent to 9 fils per share, payable in May 2024. This brings total dividends for 2023 to $475 million, including the H1 2023 dividend of $275 million paid in Q4 2023. - TradeArabia News Service