Fertiglobe reports H1 2023 revenues of $1.2bln and adjusted EBITDA of $516mln

 Fertiglobe (ADX: FERTIGLB), the strategic partnership between ADNOC and OCI Global, the world’s largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertilizer producer in the Middle East and North Africa (“MENA”) region, and an early mover in sustainable ammonia, today reported H1 2023 revenues of $1.2 billion, adjusted EBITDA of $516 million, adjusted net profit of $219 million and free cash flows of $331 million. The Company reported Q2 2023 revenues of $552 million and adjusted EBITDA of $218 million, in line with market estimates. Adjusted net profit for the quarter was $84 million, generating free cash flows of $60 million. Q2 2023 results were impacted by lower selling prices, as volatility in European gas prices continued while markets saw increased supply from capacities commissioned in 2022, coinciding with the end of the demand season in the northern hemisphere.

In view of its solid balance sheet position and healthy cash flows, Fertiglobe’s management is proposing H1 2023 dividends of at least $250 million or the equivalent of at least AED 11 fils per share, subject to board approval in September 2023 and with payment expected to follow in October 2023. The Company continues balance future growth opportunities and dividend pay-out.

During the second quarter, Fertiglobe made strong progress on its cost optimization program, aimed at reinforcing the Company’s first quartile cost positioning and optimizing its cost structure. The program is well on track to achieve $50 million in recurring annualized savings by the end of 2024, with 25-30% of these savings planned to be realized this year. Fertiglobe’s key focus areas include operating model enhancements and improvements in logistical capabilities as well as operational cost and spending efficiencies. In addition, Fertiglobe is already starting to see positive results from its manufacturing improvement plan, which is set to deliver significant operational and cost efficiencies by 2025.

Ahmed El-Hoshy, CEO of Fertiglobe, commented:

“We are pleased to see that nitrogen markets bottomed during the second quarter and are tightening rapidly, with a strong price trajectory in recent weeks despite the traditional summer lull for fertilizers. Looking ahead, we believe that limited incremental supply additions over the next several years, coupled with healthy farm economics, which incentivize nitrogen fertilizer application, and elevated marginal production costs in Europe continue to support a favorable nitrogen outlook in the medium to longer term. Going into H2 2023, we are well positioned to service the demand emerging from key regions, leveraging our centralized distribution capabilities. In alignment with our commercial strategy, we continue to target demand centers that offer attractive netbacks, and expect the reinstatement of urea and ammonia import duties into Europe to have a positive impact on our netbacks.