December 4, 2023

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ADNOC entity Fertiglobe in Q1-2023 revenue drop on ‘industry-wide’ decrease promoting costs

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The ADX-listed fertilizer firm, by which OCI International is the opposite main shareholder, noticed first quarter 2023 revenues at $694 million and adjusted web revenue at $135 million, towards $1.18 billion and $361 million a yr in the past.

Earnings have been  impacted by ‘industry-wide decrease promoting costs through the quarter as a result of continued declines in European fuel costs and demand delays in a number of key areas, primarily as a result of climate circumstances’. There was additionally the deferral of 100kt in urea shipments to Ethiopia, which led to an estimated EBITDA affect of $35 million.

Fertiglobe’s free money stream totalled $271 million as of finish March.

In response to Ahmed El-Hoshy, CEO, “The nitrogen outlook stays favorable within the medium to long run. New provide that commisioned in 2022, has been absorbed by the market, and restricted main greenfield provide additions are anticipated within the subsequent 4 years.

“Agricultural demand is buoyed by engaging farmer economics, incentivizing nitrogen fertilizer utility to replenish decade-low grain shares.

“European fuel futures over subsequent winter and 2024 are pricing in expectations of a tighter market than present ranges, implying ammonia price assist of round $815/t (together with CO2) and $650/t (excluding CO2). This could end in closures of European marginal manufacturing if pricing stays under price for a sustained interval.”

Pure fuel costs declined ‘sharply’ in Q1-2023 as a result of a a gentle winter and introduced on decrease marginal prices in

Europe. This in flip led to deferred shopping for in a number of key areas.

“This, mixed with comparatively muted industrial demand, led to promoting costs nicely under their ranges in the identical interval final yr, impacting our earnings progress in Q1-2023 on a year-on-year foundation,” mentioned Fetiglobe in an announcement.

The CEO added: “I’m happy to report that regardless of slower worth momentum in Q1-2023 and a deferral of two 50kt urea shipments to Ethiopia at a weighted common worth of $700/t, our staff was in a position to ship 9 per cent greater own-produced gross sales volumes through the quarter.

“That is pushed by our disciplined industrial technique and centralized distribution capabilities, focusing on demand centres that provide engaging netbacks. We proceed to have a powerful order e-book for the approaching months.”

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