URALCHEM HOLDING P.L.C. Reports The First Nine Months Of Year 2012 Unaudited IFRS Financial Results

    MOSCOW, RUSSIA, November 20, 2012 /24-7PressRelease/ -- Revenue increased to US $1,804 million, compared to US $1,556 million in the first nine months of 2011.

Operating profit increased to US $553 million, compared to US $487 million in the first nine months of 2011.

Adjusted EBITDA grew to US $632 million, compared to US $560 million in the first nine months of 2011.

Net profit amounted to US $600 million, compared to US $318 million in the first nine months of 2011.

URALCHEM HOLDING P.L.C. (hereinafter URALCHEM HOLDING or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter called the Group), one of the largest producers of nitrogen and phosphate fertilisers in Russia, announced its unaudited IFRS financial results for the first nine months of 2012 ending 30 September 2012.

Key financial figures in the first nine months of 2012-2011
($ million)

1st 9 Months of 2012 1st 9 Months of 2011 Year-on-Year change
Revenue 1,804 1,556 16%
Gross profit 1,041 899 16%
Gross profit margin 58% 58% -
Operating profit 553 487 14%
Operating profit margin 31% 31% -
Net profit 600 318 89%
Net profit margin 33% 20% 65%
Adjusted EBITDA 632 560 13%
Adjusted EBITDA margin 35% 36% -3%
Cash generated from operating activities 472 330 43%

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the results for the first nine months of 2012: "During nine months of this year the Company showed steady improvement of its financial performance compared to the results for the same period of 2011. To this contributed the acquisition earlier this year of another production unit, Minudobrenia, located in Perm and rising world prices for our main products, ammonia and urea. Looking back at the first nine months, we're optimistic about the full-year 2012 results."

Financial Results

Revenue in the first nine months of 2012 grew to US $1,804 million, compared to US $1,556 million in the first nine months of 2011. Operating profit amounted to US $553 million compared with operating profit of US $487 million in the first nine months of 2011. Operating profit margin amounted to 31% both in the first nine months of 2012 and in the same period of the previous year.

In the first nine months of 2012, net profit amounted to US $600 million, compared with US $318 million in the same period in 2011.

In the first nine months of 2012 adjusted EBITDA reached US $632 million compared to US $560 million for the same period last year, an increase of 13%. Adjusted EBITDA margin in the first nine months of 2012 comprised 35%, compared with 36% in the first nine months of 2011.

Markets

During the third quarter of 2012, price dynamics for fertilizers and intermediate products were different.

Prices for ammonia in the third quarter showed a significant increase due to growing demand and limited supply. During these three months, the price level rose by $50 / t, and reached $650 / t FOB Port of Yuzhny by the end of September.

In the absence of a strongly marked trend, the urea market was characterized by high volatility. Prices have not shown any significant increase or noticeable reduction, remaining within the limits of $360 to $400 / t FOB the ports of the CIS.

Ammonium nitrate prices mainly matched the dynamics of urea prices during the third quarter.

The global market for phosphate fertilizers in the third quarter of 2012 showed low levels of activity. In September, there has been a downward trend in prices amid a lack of demand in South Asia (India, Pakistan).

Sales

As the demand for the Group's products both in Russia and abroad was high and stable, the volume of sales in the first nine months of 2012 increased by 16% compared to the same period in 2011 and totalled 4,357 thousand tonnes for all products. Sales of urea, increased by 144%, largely contributed to the rise. Due to high demand in the ammonia market, sales of ammonia increased by 54%, while sales of ammonium nitrate decreased by 6%. Sales of "other chemicals" increased by 19%, mainly due to increased sales of ammonium nitrate for industrial use in the domestic market.

Sales of commercial products of the Group in the first nine months of 2012-2011
(thousands of tons)

Name of Product 1st 9 Months of 2012 1st 9 Months of 2011 Year-on Year Change
Ammonium nitrate and its derivatives 1,576 1,681 -6%
Urea 904 371 144%
Ammonia 503 327 54%
Phosphate fertilizers 344 399 -14%
NPK fertilizers 464 486 -5%
Other chemicals, including ammonium nitrate for industrial use 566 477 19%
Total 4,357 3,741 16%

Financial Situation

Increased revenues contributed to the increase of cash generated from operations to US $472 million in the first nine months of 2012 rise, compared to US $330 million in the same period last year.

As at September 30, 2012 the Company's net debt amounted to US $945 million. The weighted average interest rate in the loan portfolio during the first nine months of 2012 comprised 5.8% per annum compared to 7.9% in 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.

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