URALCHEM HOLDING P.L.C. Reports Full Year 2010 IFRS Financial Results

    MOSCOW, RUSSIA, May 12, 2011 /24-7PressRelease/ -- 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, today announced its audited IFRS financial results under for the 12 months of 2010.

Key financial figures for 2009-2010 ($ million)

12 months 2010 12 months 2009 Year-on-year change, %
Revenue 1 389.1 949.1 46.4%
Gross profit 662.7 374.9 76.8%
Gross profit margin 47.7% 39.5% 8.2%
Operating profit / (loss) 205.2 (5.6) -3764.3%
Operating profit / (loss) margin 14.8% -0.6% 15.4%
Net profit (net loss) 29.6 (97) -130.5%
Net profit margin 2.1% -10.2% 12.4%
Adjusted EBITDA 309.2 110.5 179.8%
Adjusted EBITDA margin 22.3% 11.6% 10.6%
Cash generated from / (used in) operating activities 134.9 (70.5) -291.3%

Dmitry Konyaev, CEO of URALCHEM, OJSC (part of URALCHEM Group), commented on the results of operations in 2010: "Strong results have been achieved through access to a unique resource base and a strong industrial and logistics infrastructure, a balanced lineup of basic and premium products, a significant share of the Russian domestic market and international distribution to over 50 countries worldwide. Due to the increased activity in the phosphorus market, optimum resource use, improved structure and schemes of sales, we were able to significantly improve EBITDA which is the key indicator in evaluating the effectiveness of the company".

Maxim Bakov, Chief Financial Officer of URALCHEM, OJSC said: "The financial performance of URALCHEM in the reporting period was massively influenced by market conditions. Excellent results were achieved due to the restoration of the phosphate fertilizer market, growing demand from Russian and Western consumers, as well as flexibility of production at the Company's enterprises. The market began its steady growth towards pre-crisis figures in the last 9 months of 2010, together with an increase in average world prices for ammonia by 47.3%, ammonium nitrate by 31.5%, DAP by 40.1% and urea - by 3.9% compared with the same period of 2009."

Financial results

Revenue for the 12 months of 2010 grew to US $ 1389.1 million, compared to US $ 949.1 million for the 12 months of 2009. Operating profit amounted to US $ 205.2 million, or 14.7% of the revenue, compared with the loss of US $ 5.6 million for the 12 months of 2009.

During the reporting period net profit amounted to US $ 29.6 million compared to the net loss of US $ 97 million during the 12 months of 2009.

During 12 months of 2010 adjusted EBITDA reached US $ 309.2 million, compared to US $ 110.5 million for the same period last year. Adjusted EBITDA margin for 12 months of 2010 comprised 22.3% of revenue compared with 11.6% of revenue for the 12 months of 2009.

Markets

URALCHEM is one of the largest Russian exporters of nitrogen, phosphate and NPK fertilizers, providing up to 14% of its total export supplies from Russia.

During the 12 months of 2010 the volume of export sales reached US $ 891.4 million, compared with the volume of export sales of US $ 632.8 million for the 12 months of 2009.

The volume of domestic sales within the 12 months of 2010 reached US $ 316.0 million, compared with the volume of domestic sales of US $ 200.0 million for the 12 months of 2009.

Sales and Production

The production volume of all Group companies for 12 months in 2010 increased by 10.3% compared to the same period in 2009, amounting to a total of 4.861 million tons. Ammonia production increased by 23.8%, and phosphate fertilizers by 635.5%. Excellent results were achieved due to favorable market conditions, growing demand from Russian and foreign consumers.

Sales of commercial products of URALCHEM in 2009-2010 (thousands of tons)

Name of product 2010 2009 Year-on year change, %
Ammonium nitrate and its derivatives 2 513 152 2 482 887 1.2%
Urea 447 650 529 250 -15.4%
NPK fertilizers 588 578 586 049 0.4%
Phosphate fertilizers 545 218 74 132 635.5%
Ammonia 515 947 416 861 23.8%
Other chemicals, including ammonium nitrate for industrial use 250 745 317 203 -21%
Total 4 861 290 4 406 382 10.3%

Dmitry Konyaev, CEO of URALCHEM, OJSC commented on the sales of commercial products in 2010: "As a result of last year's operations, the group of companies URALCHEM ranks first among Russian manufacturers in terms of production of ammonium nitrate and its derivatives and holds second place in terms of production of ammonia and nitrogen fertilizers. We intend to increase the annual output, and by 2015 total production is set to reach 5.6 million tons."

Financial situation

Cash generated from operating activities (before tax and interest) for the 12 months of 2010 amounted to US $ 134.9 million.

On 31 December 2010 net debt amounted to US $ 1307.9 million. The weighted average interest rate in the loan portfolio for the 12 months of 2010 amounted to 9.07% compared to 9.66% in the same period of 2009.

During the first half of 2011 the Company plans to reduce the net debt by at least 10%.

URALCHEM is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tons of ammonium nitrate, 2.2 million tons of ammonia, 0.8 million tonnes of MAP and DAP, 0.8 million tons of complex fertilizers and 0.5 million tons of urea. URALCHEM is the second largest ammonium nitrate producer in the world and number one in Russia. URALCHEM's key production assets include Kirovo-Chepetsk Chemical Works, OJSC in Kirovo-Chepetsk, Kirov region; Azot, OJSC in Berezniki, Perm region; Voskresensk Mineral Fertilizers, OJSC in Voskresensk, Moscow region.

Website: http://uralchem.com/

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