URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Quarter of 2012
URALCHEM HOLDING P.L.C. announced its unaudited IFRS financial results for the first quarter of 2012 ending 31 March 2012.
Moscow 5/31/2012 09:39 PM GMT (WooEB)
Moscow, Russia – (For Immediate Release)
- Revenue increased to US $673 million, compared to US $566 million in Q1 2011.
- Operating profit increased to US $178 million, compared with US $160 million in Q1 2011.
- Adjusted EBITDA grew to US $207 million, compared to US $186 million in Q1 2011.
- Net profit amounted to US $354 million, compared with US $174 million in Q1 2011.
URALCHEM HOLDING P.L.C. (hereinafter URALCHEM Holding or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter the Group), one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first quarter of 2012 ending 31 March 2012.
Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the first quarter of 2012 results, “I am pleased with the Company’s results in the first quarter of this year. We are moving ahead as planned. Net profit in the first quarter of 2012 more than doubled compared to the same period last year. This happened due to the acquisition of Minudobrenia in Perm, as well as the reassessment of our share in the enterprise. Besides, the net profit figure was influenced by a considerable reduction in interest expenses on loans which became possible after we refinanced the loan portfolio last year.”
Revenue for the first quarter of 2012 grew 19% to US $673 million, compared to US $566 million in the first quarter of 2011. Operating profit amounted to US $178 million, or 26% of the revenue, compared with the operating profit of US $160 million, or 28% of the revenue in the first quarter of 2011.
Net profit for the first quarter of 2012 more than doubled, amounting to US $354 million, compared to US $174 million in the first quarter of 2011. Without the reassessment of the Company’s share in Minudobrenia, Perm the net profit growth comprised 15%.
During the first quarter of 2012, adjusted EBITDA reached US $207 million, compared to US $186 million the year before, a rise of 11%. Adjusted EBITDA margin for the first quarter of 2012 comprised 31% of revenue compared with 33% of revenue for the first quarter of 2011.
In the first quarter of 2012 the prices of fertilizers and intermediates showed significantly different dynamics. Prices for ammonia at the Yuzhny port fell to $70 / t due to low demand, both in agriculture and industry, which coincided with the launch of Qafco V. Market recovery began only in late March.
During January to early February the urea market repeated its dynamics in 2011. However, in mid-February a rapid increase in the price of urea started due to high demand in the U.S. The late Q1/early Q2 price level approached peak figures ??of 2011 even surpassing them at certain markets. Prospects for market development in the second quarter remain optimistic for market participants.
Prices for ammonium nitrate were stable during the first quarter due to high volumes of domestic market shipments.
The global market of phosphate fertilizers in the first quarter of 2012 was characterized by low activity, with prices going down slightly. European demand was limited due to severe weather conditions and financial instability. Moderate recovery in prices occurred in late Q1 due to higher demand in Latin America and the U.S. domestic market.
In the first quarter of 2012 the Group’s product sales amounted to 1.7 million tons, up 20% compared to the first quarter of 2011. Through the acquisition of OJSC Minudobrenia, Perm in January 2012, sales of urea and of ammonia increased significantly.
Cash generated from operating activities grew by 4%, from US $167 million in the first quarter of 2011 to US $174 million in the first quarter of 2012.
On 31 March 2012, the Company’s net debt amounted to US $1,076 million. The weighted average interest rate in the loan portfolio for the first quarter 2012 decreased to 5.85% compared to annual 8.0% for the same period last year.
Annex to the press release about the unaudited financial results for the first quarter of 2012
EBITDA is a profit / loss from financial and economic activities during the reporting period, before deduction of income tax on profits, income and interest costs, depreciation and amortization. "Adjusted EBITDA" is EBITDA for the reporting period before goodwill, profit / loss from associates, profit / loss on foreign exchange differences arising on financial performance and profit / loss on operations with derivative financial instruments. Adjusted EBITDA is operating profit before depreciation and amortization and financial results of operations with derivative financial instruments. In accordance with International Financial Reporting Standards ("IFRS"), depreciation and amortization are included in cost structure, and in the selling, general and administrative expenses. IFRS does not require the disclosure and does not describe the calculation of EBITDA and adjusted EBITDA, among other financial indicators, so they can not substitute for net profit for the period when evaluating the results of operations or the measure of cash provided by operating activities when evaluating liquidity. Approach to the calculation of EBITDA and adjusted EBITDA, as described earlier, may not coincide with the approaches used by other companies, therefore, comparability may be limited. We believe that EBITDA and adjusted EBITDA provide useful information to investors because they are indicators of the stability and efficiency of our business and our ability to fund discretionary spending such as capital expenditures, the acquisition of subsidiaries and other investments, as well as indicators of our ability to incur and service debt. IFRS classifies depreciation and amortization to operating costs, while in fact they are distributed to the current period non-cash expenses for the acquisition or creation of fixed assets, incurred in previous periods, and are not affiliated with the movement of funds.