URALCHEM HOLDING P.L.C. Reports Unaudited IFRS Financial Results for the First Half of 2012

    MOSCOW, RUSSIA, August 17, 2012 /24-7PressRelease/ -- Revenue increased to US $1,261 million, compared to US $1,035 million in H1 2011.

Operating profit increased to US $410 million, compared with US $288 million in H1 2011.

Adjusted EBITDA grew to US $462 million, compared to US $337 million in H1 2011.

Net profit amounted to US $444 million, compared with US $266 million in H1 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 fertilisers in Russia, announced its unaudited IFRS financial results for the six months ended 30 June 2012.

Key Financial Figures for H1 2012 and 2011 (US $ million)

H1 2012 H1 2011 Year-on-Year Change, %
Revenue 1,261 1,035 22%
Gross profit 743 577 29%
Gross profit margin 59% 56% 5%
Operating profit 410 288 42%
Operating profit margin 33% 28% 18%
Net profit 444 266 67%
Net profit margin 35% 26% 35%
Adjusted EBITDA 462 337 37%
Adjusted EBITDA margin 37% 33% 12%
Net cash generated from operating activities 342 194 76%

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the results for the first half of 2012, "We achieved good financial results in the first half of this year compared to the same period in 2011. EBITDA increased by more than one-third, sales grew by 18% and reached 3 million tons. The good performance was driven by situation on the urea and ammonium nitrate markets, which was favourable for us, as well as acquisition of Minudobrenia OJSC and our own efforts aimed at improving the efficiency of enterprises, the modernization of production and our responsiveness to changing market needs."

Financial Results

Revenue for the first half of 2012 grew to US $1,261 million, compared to US $1,035 million in the first half of 2011. Operating profit amounted to US $410 million, or 33% of the revenue, compared with the operating profit of US $288 million, or 28% of the revenue in the first half of 2011.

Net profit for the first half of 2012 amounted to US $444 million, compared to US $266 million in the first half of 2011.

During the first half of 2012, adjusted EBITDA reached US $462 million, compared to US $337 during the same period last year, a rise of 37%. Adjusted EBITDA margin for the first half of 2012 comprised 37% of revenue compared with 33% of revenue for the first half of 2011.

Markets

During the second quarter of 2012 prices of mineral fertilisers and semi-products showed significantly different dynamics. Ammonia prices began to recover due to high demand and limited supply. During the second quarter the price grew by $150/t and by the end of June it reached $600/t FOB at the Yuzhny port.

Prices for urea increased until mid-May and surpassed the peak figures of 2011. Since mid-May there was a significant decline in prices due to low activity of buyers. In late June - early July, the urea market began to show signs of recovery.

Prices for ammonium nitrate repeated the dynamics of the urea market and grew rapidly until mid-May. However, the second half of the quarter was characterized by falling prices for the product, which was also due to low purchasing activity.

The global market of phosphate fertilisers was in the process of recovery during the second quarter of 2012. Due to strong demand in Latin America, spot prices recovered, despite the launch of Chinese products on the market. Market participants are forecasting a stable outlook for the third quarter of the year.

Sales

In the first six months of 2012 the Group's product sales grew by 18% compared to the same period in 2011 and totalled 3 million tons. Due to the acquisition of OJSC Minudobrenia, Perm, sales of urea and ammonia increased significantly, by 117% and 61% respectively.

Sales of Commercial Products of URALCHEM Group in H1 2012-2011 (thousands of tons)

Name of Product H1 2012 H1 2011 Year-on-Year Change, %
Ammonium nitrate and its derivatives 1,169 1,178 -1%
Urea 598 275 117%
Ammonia 353 219 61%
Phosphate based fertilisers 282 289 -2%
Complex fertilisers 293 319 -8%
Other chemicals, including ammonium nitrate for industrial use 384 329 17%
Total 3,079 2,609 18%

Financial Situation

Cash generated from operating activities in the first half of 2012 amounted to US $342 million compared with US $194 million in the first half of 2011.

On 30 June 2012, the Company's net debt amounted to US $991 million. Interest expenses in the first half of 2012 decreased by US $23 million or 36% compared to the same period last year.

URALCHEM HOLDING P.L.C. is a holding company of the URALCHEM Group, which includes four fertilizer manufacturing facilities in Russia. URALCHEM Group is one of the largest producers of nitrogen and phosphate fertilisers in Russia and the CIS with production capacities of over 2.5 million tons of ammonium nitrate, 2.8 million tons of ammonia, 0.8 million tons of MAP and DAP, 0.8 million tons of complex fertilisers and 1.2 million tons of urea per year. URALCHEM Group is the second largest ammonium nitrate producer in the world and number one in Russia, the second largest producer of nitrogen fertilisers in Russia. URALCHEM Group's key production assets include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC, Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk, Moscow region.

Website: http://www.uralchem.com

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