PhosAgro Fertilizer Production up 3.7% y-o-y in 2014

OREANDA-NEWS. February 03, 2015. PhosAgro (Moscow Exchange, LSE: PHOR), one of the world’s leading vertically integrated phosphate-based fertilizer producers, announces its production results for the year ended 31 December 2014.

Total fertilizer production and sales increased year-on-year in 2014 by 3.7% and 2.7%, respectively. Production of phosphate-based fertilizers and feed phosphates in 2014 increased by 3.2%, while production of nitrogen-based fertilizers increased by 5.2% year-on-year. 

PhosAgro’s production and sales volumes for the year 2014 are summarized in the tables below.

Commenting on the full year 2014 operational results, PhosAgro CEO Andrey Guryev said: “We saw solid demand for our products this year: Brazil, one of the world’s largest consumers of mineral fertilizers, increased imports of phosphate-containing fertilizers by over 10%; India increased imports by 4% year-on-year, though still remaining at the lowest consumption/application rates in the past seven years.  

“PhosAgro’s domestic market demonstrated the best growth rates in consumption of phosphate-containing fertilizers, with a more than 30% increase in NPK consumption and 5% growth in MAP. 

“The pricing environment has also been much more favorable compared to 2013, and we were again able to increase production and sales volumes of fertilizers, which I believe clearly demonstrates the success of our strategy of focusing on efficiency, modernization and debottlenecking at our production sites.

“Looking forward to 2015, we believe demand will be solid again, with probably the most significant growth rates in India, which has been significantly under-applying P2O5 for the past two years.  Growth rates in Brazil are likely to be slower, given that cereals prices at the moment are at their lowest levels in six years. When considering Brazil, however, it is important to factor in the fact that devaluation has decreased farmers’ local currency costs, which gives a significant cost advantage relative to producers whose costs are primarily USD-denominated. In addition to this, substantially lower USD fuel prices have made it possible for Brazilian farmers to invest more into fertilizers in order to increase crop output.  Thus we do not see any significant downside risk in this market.  

“As the global cash cost leader, we are optimistic about the Company’s outlook in terms of financial performance.”

The table below provides a breakdown of production volumes by major product for the year 2014:

The table below provides a breakdown of sales volumes by major product for the year 2014: