Uralkali Announces IFRS H1 2011 Financial Results
OREANDA-NEWS. September 22, 2011. Uralkali (LSE: URKA), one of the world’s largest potash producers, has today published the Consolidated Condensed Interim Financial Information for the six months ended 30 June 2011, prepared under International Accounting Standard №34, "Interim Financial Reporting".
The results are as follows:
IFRS Financial ResultsUSD million |
Proforma H1 20111 |
H1 20112 |
H1 20103 |
Revenue |
1,973 |
1,266 |
911 |
Net Revenue4 |
1,654 |
1,052 |
700 |
Adjusted EBITDA5 |
1,054 |
662 |
423 |
Adjusted EBITDA Margin6 |
64% |
63% |
60% |
Net Profit |
794 |
452 |
280 |
Potassium Chloride Output |
5.217 |
3.113 |
2.418 |
Sales |
5.276 |
3.247 |
2.703 |
1 Uralkali financial results for the 6 months ended 30 June 2011 including Silvinit results starting from 1 January 2011
2 Uralkali financial results for the 6 months ended 30 June 2011 including Silvinit results starting from 17 May 2011 when Silvinit ceased to exist
3 Uralkali results without Silvinit results
4 Net revenue represents adjusted revenue (sales net of freight, railway tariff and transshipment costs)
5 Adjusted EBITDA is calculated as Operating Profit plus depreciation and amortisation and does not include mine flooding costs
6 Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Net Sales
Commenting on the H1 2011 results, Vladislav Baumgertner, Uralkali CEO, said:
"The first six months 2011 were a major milestone for Uralkali and the potash industry in general. As a result of the combination between two Russian potash producers – Uralkali and Silvinit – a company was created which became one of the world’s leading potash producers and Russian mining enterprises. Now that the merger is completed Uralkali continues its constant improvement in line with the best international corporate practices. The Company is focused on seamless post-merger integration and realisation of synergies. Having welcomed two new high-caliber international independent directors to our Board in the first half of the year, we continue to strive to make the new Uralkali even more transparent and open to our shareholders and broader investor community.
Uralkali’s operational and financial performance in 1H 2011 has been very strong. The combined company continues to be among the most cost efficient potash producers in the world with an excellent pipeline of brown and
H1 Business Review
The merger of the two Russian potash producers – Uralkali and Silvinit – which was completed in June 2011 became one of the key market highlights of H1 2011. As a result of the combination Uralkali became world’s largest potash producer by production output. The Company holds an attractive investment portfolio including brownfield and
The rising demand for potash allowed Uralkali to utilise its production capacities at almost 100%. In H1 2011 Uralkali on a proforma basis sold approximately 5.3 million tonnes of potassium chloride.
In H1
Market Outlook
Following the 2009 setback caused by the world economic slowdown, the potash market continues its rebound and shows sustainable growth. Despite the volatility on the international commodities markets, the potash market continues to be very resilient, largely due to strong demand. H1 2011 was the period when the global potash market reached its historic record of 29.4 million tonnes. Due to the high crop prices and low input costs agricultural producers worldwide have been enjoying high profitability and record margins. The corn price has achieved its peak 2008 levels while the prices for wheat, soya beans, and palm oil showed robust growth in 2010 and are currently close to their historic maximums. All this allows them to buy actively mineral fertilisers for the immediate application and stock replenishing. This situation has influenced positively the potash market boosting its growth and increasing pressure on the supply side pushing the utilisation rate across the potash production industry above 90%.
The contract between the Belarusian Potash Company (BPC) and
The potash industry retains its strong fundamentals. Despite the current volatility of the world’s financial markets, we continue to see strong demand, including on the spot markets. Given the current market trends and the fact that major potash producers work at the capacity exceeding 90%, Uralkali believes that the potash market in 2011 may reach 58-59 million tonnes. Before the world economic crisis the record potash market volume was achieved in 2007 when the potash sales reached 56 million tonnes. At the same time the potash prices are still significantly lower than they were at the pre-2008 crisis level. The situation on the potash market in H1 2011 as well as its development in H2 2011 give us confidence to believe that the upward trend will continue in 2012.
Consolidated Condensed Interim Financial Information for the six months ended 30 June 2011 is now available on the Company’s corporate website www.uralkali.com.These financial statements have been reviewed by ZAO PricewaterhouseCoopers Audit.
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