Today Acron (RTS, MICEX and LSE: AKRN) released its unaudited consolidated condensed IFRS financials for the first six months of 2010.
H1 2010 IFRS Financials
• Revenue was up 16% year-on-year to RUB 21,836 million (H1 2009: RUB 18,860 million).
• EBITDA* totalled RUB 4,534 million, up 27% year-on-year (H1 2009: RUB 3,596 million).
• EBITDA margin was 21%, up from 19% in H1 2009.
• Net profit more than doubled year-on-year to RUB 2,509 million, against RUB 1,092 million in H1 2009.
* EBITDA is operating profit adjusted for depreciation and amortisation, exchange rate gain/loss and other non-cash and non-standard items.
Operating Results
• Total sales reached 2,717,000 tonnes, up 2% year-on-year.
• Complex fertiliser sales were up 8% year-on-year to 1,157,000 tonnes.
• Ammonia and nitrogen-based fertiliser sales decreased 4% year-on-year to 1,129,000 tonnes.
• Sales of organic and non-organic compounds were up 1% year-on-year to 430,000 tonnes.
Notes to main statement items
Acron Group demonstrated positive dynamics in its key financial and operating indices. Higher revenue in the reporting period was fuelled by stronger NPK sales and higher nitrogen fertiliser prices. In H1 2010 EBITDA increased due to the inflow of operating profit generated by all of the Group’s main divisions, including Hongri Acron.
More stable exchange rate dynamics helped reduce FX losses and enhance net profit. The Group continued capitalising its future period expenses, including interest on loans obtained to purchase the potash licence, which increased net profit by RUB 750 million.
The Group’s net debt was RUB 26,065 million, up 6% from the beginning of the year on the back of an increase in working capital and investments (CapEx in the reporting period was RUB 1,682 million). Expenses were mainly associated with financing NWPC’s aggressive implementation of its mine construction project to process apatite-nepheline ores in the Murmansk region of Russia.
Alexander Popov, Chair of Acron’s Board of Directors, comments on the Group’s performance:
“Our strong half-year performance demonstrates the effectiveness of our development strategy. I would like to draw attention to the Group’s higher profitability, which may be a sign of a new upwards cycle in the global mineral fertiliser industry. We see that fertiliser demand in key markets has nearly recovered. Due to its diversified business operations strategy, the Group has maintained a sufficient profit margin despite higher costs.
“To support the Group’s competitive edge over the long term, we continue to invest in vertical integration. We are on schedule with our current key project to construct a mine at the Oleniy Ruchey deposit and intend to put it into operation by 2012.”