Today Acron (RTS, MICEX and LSE: AKRN) released its abridged unaudited IFRS consolidated statements for 9M 2010.
Financial Highlights
• Revenue totalled RUB 32.43 billion, up 14% year-on-year (9M 2009: RUB 28.36 billion)
• EBITDA* was RUB 6.40 billion, up 17% year-on-year (9M 2009: RUB 5.49 billion)
• EBITDA margin was 20%, up from 19% for 9M 2009
• Net profit totalled RUB 4.03 billion, down 30% year-on-year from RUB 5.79 billion
*EBITDA is calculated as operating profit adjusted for depreciation and amortisation, exchange rate gain/loss and other non-cash and extraordinary items.
Operating Results
• Sales totalled 4,018,000 tonnes, with no change year-on-year
• Sales of complex fertilisers totalled 1,716,000 tonnes, up 6% year-on-year
• Sales of ammonia and nitrogen fertilisers were down 4% year-on-year to 1,626,000 tonnes
• Sales of organic and non-organic compounds were down 1% year-on-year to 676,000 tonnes
Comments on Key Items
Higher revenue in the reporting period was due to higher nitrogen fertilisers prices. The higher EBITDA was achieved due to higher profits at most of the Group’s business units, including Hongri Acron. Notably, net profit in 2009 was materially impacted by the sale of a stake in JSC Sibneftegaz, whilst no transaction of this kind has taken place YTD. Furthermore, the Group continued capitalising interest on loans involved in the potash licence purchase, which increased net profit by RUB 1.42 billion.
Acron’s net debt in the reporting period was RUB 27.06 billion, up 9% from early 2010. The higher net debt was due to higher CAPEX in the reporting period, which totalled RUB 3.59 billion, a year-on-year increase from RUB 2.39 billion. Most of the expenses were incurred from financing NWPC, which is working to complete its mine in the Murmansk region.
Chairman of the Board of Directors Alexander Popov comments on the results:
“Our financial highlights for 9 months of 2010 were affected by the scheduled overhaul of Dorogobuzh facilities, as well as by the forecasted low demand and prices for fertilisers in the first half of the summer. Nevertheless, prices and demand for mineral fertilisers saw a strong upward trend that started in mid-July 2010. In November, prices for nitrogen and complex mineral fertilisers reached a two-year high. In this period the price of urea rose from $210 to $360 per tonne, and NPK went from $300 to $400 per tonne (FOB Baltic). Our financial results for 9 months of 2010 do not fully reflect this trend. In the fourth quarter of 2010 we expect financial and operating results to considerably improve due to favourable conditions in the international market.”