PhosAgro

A vertically integrated structure with a full cycle of production of phosphorus-containing mineral fertilizers from the extraction of phosphate raw materials to final products (fertilizers, feed phosphates, phosphoric acid, etc.). PhosAgro ranks first in Europe and second in the world in the production of concentrated phosphorus-containing fertilizers.

PhosAgro Group includes JSC, Apatite JSC PhosAgro Cherepovets(created as a result of the merger of OJSC Ammofos and OJSC Cherepovets Azot), CJSC, Agro-Cherepovets Balakovo branch of Apatit JSC, CJSC, Metachemical LLC, PhosAgro Trance LLC and PhosAgro Region OJSC.NIUIF

Performance indicators

2023

Latin America became the largest export market

Latin America became the largest export market for Fosagro in 2023: during this 12-month period of time, the Russian company supplied 3.2 million tons of fertilizers to this region, which is 1.5 times more than a year earlier. Such data are given in the manufacturer's reports published in May 2024.

As Vedomosti writes with reference to the materials of Fosagro, the share of Latin America in the company's foreign revenue in 2023 amounted to 37%. In total, Fosagro exported about 8.7 million tons of fertilizers that year.

𝓲

Unsplash

Fosagro estimates its share in the total volume of imports of complex fertilizers by Latin American countries (excluding Brazil) in 2023 at 19%, in Brazilian imports at 20% (against 12% in each direction in 2022).

It is also reported that in 2023, Fosagro's supplies to Russia and the CIS countries also increased by 9% to 2.8 million tons, but exports to Europe decreased by 5% to 2.1 million tons. However, shipments to North and South America rose 44% overall to 3.8 million tonnes. Brazil, the largest fertilizer market in the region, has become the main consumer of Russian products. The company also reports that it has retained the position of the Russian leader-exporter of fertilizers to African countries, increasing supplies to the continent to more than 550 thousand tons by the end of 2023.

The company accounts for 33% of all Russian fertilizer supplies to Africa, we supply our environmentally friendly products, without hazardous concentrations of cadmium and other toxic substances for human health and soil, to more than 20 countries of the continent. At the same time, we have big plans for the future - in the next three years we plan to double supplies to the African continent, the report says.[1]

Decrease in revenue by 23% to 440.3 billion rubles

PhosAgro's revenue at the end of 2023 decreased by 23% compared to 2022 and amounted to 440.3 billion rubles. Net profit during this time decreased by 53.4%, to 86.14 billion rubles. The company published such data at the end of April 2024.

Net debt of the Russian producer of mineral fertilizers as of December 31, 2023 amounted to 223.21 billion rubles against 180.34 billion rubles a year earlier.

The decrease in revenue in 2023 at PhosAgro was associated with the correction of fertilizer prices in world markets after record high prices in 2022. In 2023, the company increased sales of products by 2%, to 11.4 million tons. Among the factors that contributed to the growth of sales of the company's products, the company highlights a flexible sales policy and high price availability of fertilizers, which made it possible to significantly increase sales of fertilizers not only to the priority domestic market, but also to key export markets. It is also possible to note a relatively low level of stocks in key sales markets, the press release says.

𝓲

Unsplash

From the reporting of PhosAgro it also follows that in 2023 the production of mineral fertilizers and feed phosphates increased by 2.1% compared to last year and amounted to 11 million tons, and the production of other agrochemical products amounted to about 0.3 million tons. The company said that this growth was ensured by an increase in the production of phosphate products (diammonium phosphate (DAP) and monoammonium phosphate (MAP)) by 8.4% - to more than 4.5 million tons, ammonium nitrate by 4.4% - to 723 thousand tons and urea by 1.6% - to 1.7 million tons.

The company's EBITDA in 2023 amounted to 183 billion rubles, a decrease of 29% compared to last year. Efficient cost management and growth in the sale of high-margin products made it possible to ensure EBITDA profitability at a high level (41.6%), PhosAgro said^[2]

Growth in fertilizer exports to 8.7 million tons

In 2023, PhosAgro increased its fertilizer exports to 8.7 million tons. The general director of the company, Mikhail Rybnikov, cited such data at the end of December 2023. According to him, in the segments of nitrogen mineral fertilizers and feed phosphates, an increase in supplies abroad was recorded by 6.5% and 8.7%, respectively.

As noted by Rybnikov, sales of fertilizers in near abroad at the end of 2023 at PhosAgro increased by 18%. The main sales areas in the company were Latin America, Asia, Africa, while the company notes the redistribution of about 1 million tons of supplies from India and other Asian countries towards Latin America due to the recovery in Brazilian demand and a more favorable price and logistics situation in the Latin American direction.

PhosAgro increases annual fertilizer exports

At the same time, in 2023, PhosAgro almost stopped deliveries to the countries of Northern, Eastern Europe and the Baltic states, but increased shipments to Southern and Western Europe, to the Balkans.

The total volumes of supplies to Europe remained within 2 million tons, that is, at the level of 2022 (but a third less than the volumes of previous years, when exports to Europe reached 2.8-3 million tons), - added Rybnikov, whose words are quoted by TASS.

According to the head of PhosAgro, friendly states in 2023 accounted for about 75% of the company's exports against 70% a year earlier. Fertilizer supplies to African countries amounted to more than 550 thousand tons.

Fosagro plans to increase its annual exports to Africa by 1.8 times by 2025 compared to the results of 2022 to 1 million tons in physical weight. According to the Russian Association of Fertilizer Producers (RAPU), Fosagro is the largest exporter of Russian fertilizers to Africa. Over the past five years, the company has 4.6 times increased annual deliveries to this continent. Fosagro supplies products to 21 African countries.^[3]

2022: Revenue growth by 35% to RUB 569.53 billion

PhosAgro Group completed 2022 with revenue of 569.53 billion rubles, which is about 35% more than a year earlier. Net profit in comparison with the same periods rose by 42.4% and reached 184.71 billion rubles. Such data were released by the company in early March 2023.

As stated in PhosAgro, revenue growth was the result of an increase in sales of final products. The increase in revenue was also influenced by a higher average level of sales prices on world markets and a change in the structure of the company's products sold in favor of high-margin types of fertilizers, which are in high demand among farmers. Revenue grew at a faster pace relative to the cost of sales, which increased by about 23% at the end of the year, the group said.

PhosAgro Financial Performance

In 2022, total sales of the company's products increased by 6.4% and exceeded 11 million tons, which is a record figure in the history of PhosAgro. At the same time, the growth in sales of phosphate fertilizers (the company's main products) amounted to 8.3% and reached 8.4 million tons. This growth was driven by increased production volumes and strong demand for fertilizers in the Russian and global markets.

Annual production of mineral fertilizers and other products of the chemical complex increased by 4.6%, to 11.1 million tons. This growth was achieved thanks to the efficient operation of new industries launched as part of the implementation of the company's comprehensive long-term development program and the expansion of the product line.

PhosAgro's net debt as of December 31, 2022 increased to 180.3 billion rubles ($2.6 billion), but the ratio of net debt to adjusted EBITDA at the end of the year decreased to 0.68x.^[4]

2021: Revenue growth by 65.6%, to 420.59 billion rubles, profit - 129.67 billion rubles

Fosagro's revenue in 2021 reached 420.59 billion rubles, which is 65.6% more than a year earlier. The net profit of the producer of phosphorus-containing fertilizers during this time soared by 666.3% and amounted to 129.67 billion rubles. The company's statements were published on February 10, 2022.

The growth in revenue at Fosagro was explained by the company's record output of finished products, the recovery of world fertilizer prices during the year and high demand from end consumers amid low stocks in key markets.

Phosagro's net debt as of December 31, 2021 slightly decreased compared to the end of 2020 (then it was 156.88 billion rubles) and amounted to 153.7 billion rubles ($2.1 billion). It is noted that the reduction in the debt burden was ensured by increasing the profitability of the business with effective control of internal costs. Net debt/EBITDA decreased to 0.8x. For 12 months of 2021, the company's free cash flow amounted to a record 77.9 billion rubles, which is 83.1% higher than in 2020.

The volume of investments in the acquisition of Phosagro fixed assets in 2021 amounted to 48 billion rubles, an increase of 17.3%. This growth was associated with reaching the final stage of the construction of a modern production complex in Volkhov and the implementation of other projects as part of a long-term development strategy, the company explained.

In 2021, the cost of Phosagro products sold increased by 31.3% compared to a year ago. This growth was mainly due to an increase in the volume of sales of commodity products and an increase in prices for the main raw materials.

Sales of phosphorus-containing fertilizers and feed phosphates at Fosagro in 2021 increased by 1.2%, to 7.76 million tons. The sale of nitrogen fertilizers rose by 9.1%, to 2.5 million tons.^[5]

History

2024

Election of a new Board of Directors

The board of directors of Fosagro re-elected independent director Viktor Cherepov as its chairman, and also approved the leadership and personal composition of the committees. This was announced in early July 2024 by the press service of the Russian manufacturer of phosphorus-containing fertilizers.

The independent director is re-elected as the Chairman of the Audit Committee, the board member of PhosAgro Victor Cherepov, is elected the Chairman of the Committee on rewards and a personnel the board member of PhosAgro Sirodzh Loikov, on strategy and sustainable development the board member of PhosAgro Alexander Sharabayko is re-elected as the Chairman of the Committee. Sergey Samosyuk was re-elected secretary of the board of directors. Alexander Sharabaiko was re-elected Deputy Chairman of the Board of Directors. The full list of board members is as follows:

• Viktor Mikhailovich Cherepov;
• Ivanov Victor Petrovich;
• Yuri Nikolaevich Krugovykh;
• Loikov Siroj Akhmadbekovich;
• Pashkevich Natalya Vladimirovna;
• Trukhachev Vladimir Ivanovich;
• Rybnikov Mikhail Konstantinovich;
• Seleznev Alexander Evgenievich;
• Sharabaiko Alexander Fedorovich;
• Andrei Vladimirovich Sharonov.

Having considered the issue of compliance of the composition of the committees with the objectives of the Board of Directors of the Company and the objectives of the Company's activities, the Board of Directors confirmed that at the moment, taking into account the scope of activities and the level of risk, the composition of the committees of the Board of Directors of the Company fully meets the objectives of the Board of Directors and the objectives of the Company's activities, there is no need to form additional committees of the Board of Directors of the Company, PhosAgro said in a statement.

According to Viktor Cherepov, Chairman of the Board of Directors of PhosAgro, thanks to the work of labor collectives, close cooperation between the Board of Directors and the company's management, PhosAgro is progressively implementing a long-term dynamic development strategy and a large-scale capital investment program - in 2024 it is planned to allocate a record 73 billion rubles for investments.^[6]

The wife of the founder of Fosagro Guryev sold a 4.82% stake in the company for 41 billion rubles

In early June 2024, it became known that Evgenia Guryeva, the wife of Fosagro founder Andrei Guryev, sold her 4.82% stake in this company. The value of the asset amounted to approximately 40.61 billion rubles.

According to Forbes, the contract for the sale and purchase of securities was concluded on January 9, 2023. The buyer of the package was a company owned by Andrei Guryev. The value of one share under the transaction amounted to 6512 rubles, which is 2% more than the closing price of trading at the time of signing the agreement. As of June 5, 2024, Phosagro, one of the world's leading producers of phosphorus-containing fertilizers, is trading at 5960 rubles.

𝓲

Unsplash

It is noted that the sold stake in Fosagro directly belonged to Evgenia Guryeva since 2007. She met her husband at school, and their son Andrei Guryev Jr. from 2013 to 2022 was the chairman of the board of Fosagro. Guryeva is regularly included in the rating of the richest women in Russia. In particular, in the Forbes list of 2023, it ranks eighth with a capital of approximately $875 million.

Meanwhile, at the end of May 2024, the board of directors of Fosagro approved the progress of the company's key investment projects as part of its development strategy until 2025. So, in Cherepovets and Volkhov, projects are being implemented to increase the processing of apatite concentrate by a total of more than 400 thousand tons. In addition, Cherepovets continues to build a phosphogypsum transportation pipeline and maintain sulphuric acid production capacity. At the same time, Balakovo is undergoing the third stage of development of the production complex with the creation of a flexible scheme for the production of MAP/DAF/NPS/NPK fertilizers and an increase in gross production. Plus, the development of ore-raw materials and enrichment complexes continues: work is underway on the construction of a new mine for the development of the Rasvumchorr Plateau deposit^[7]

Launch of a plant for the production of mineral fertilizers for 34 billion rubles

On March 5, 2024, Fosagro officially opened a chemical complex in Volkhov, Leningrad Region. According to the press service of the regional government, 34 billion rubles were invested in this project for the production of mineral fertilizers.

As part of a large-scale project, a modern complex appeared on the site of the old Soviet enterprise, including new lines for the production of extraction phosphoric and sulfuric acids, water-soluble mineral fertilizers. New storage facilities and a complex for the disposal of waste technological steam have also been created, providing the enterprise with electricity of its own generation by 85%. The company has created 700 new jobs.

source = Government of Leningrad Region

It is noted that due to the deep modernization and new construction:

• annual production of mineral fertilizers will grow by more than 4 times compared to the level of 2019 and will exceed 1 million tons;
• processing of apatite concentrate will grow more than 5 times to more than 1.5 million tons;
• sulphuric acid production will grow more than 5 times to 1.1 million tons;
• phosphoric acid production will grow more than 5 times to 500 thousand tons.

The complex also launched the production of a new brand of fertilizers - monoammonium phosphate. The production of a new product has begun - water-soluble ammophos, fertilizer for greenhouse farms. Volkhov Plant is the only producer of sodium tripolyphosphate in Russia.

Russian President Vladimir Putin took part in the opening of the enterprise via video link. The head of state asked what is the average salary at the enterprise. He was answered - 125 thousand rubles. According to the Governor of the Leningrad Region, Alexander Drozdenko, about 350 highly qualified engineering jobs have been created at the plant^[8]

2022: Vladimir Litvinenko transferred almost the entire stake in PhosAgro to his wife

On May 23, 2022, it became known about the transfer of Vladimir Litvinenko's stake in PhosAgro to his wife Tatyana Litvinenko. The latter became the owner of a 20.6% stake in the company, and the share of the rector of St. Petersburg Mining University in one of the world's leading producers of phosphorus-containing fertilizers decreased to 0.39%.

PhosAgro was notified of Vladimir Litvinenko's change in the share capital of the company, the company's press center on the official website said on May 23, 2022. The reasons for the transfer of the share in the message "Fosagro" are not called.

Earlier, Litvinenko first entered the Forbes global list with a fortune of $1.5 billion. Litvinenko was the second largest shareholder in the fertilizer producer after the Guryev family - the main beneficiaries. Another major shareholder of PhosAgro, Igor Antoshin, owns a 4.5% stake. Litvinenko has repeatedly topped the rating of the richest rectors in Russia thanks to a stake in PhosAgro.

On March 10, 2022, Fosagro CEO Andrei Guryev left his post after the [[|EU]] imposed personal sanctions on him. Also, his father, billionaire Andrei Guryev and Frenchman Xavier Rolet, left the board of directors. Guryev owned 48.48% of the company's shares.

By May 2022, Fosagro is the largest producer of phosphate fertilizers in Russia. The company owns Apatit JSC in Cherepovets, its branches in the Murmansk, Saratov and Leningrad regions, Fosagro-Region LLC and the Research Institute for Fertilizers and Insectofungicides named after Professor Ya. V. Samoilov.

In May 2022, the Government Commission of the Russian Federation allowed PhosAgro to continue circulation of global depositary receipts (GDR) abroad. The companies' GDRs are traded on the London Stock Exchange.^[9]

Notes