Fertiglobe reports lower revenue amid European gas prices and shipment deferrals

ABU DHABI, UAE: Fertiglobe, the joint venture between ADNOC and OCI Global, has reported its financial results for Q1 2023, revealing a revenue of $694 million, adjusted EBITDA of $297 million, adjusted net profit of $135 million, and free cash flow of $271 million.

The lower selling prices during the quarter was due to continued declines in European gas prices and demand delays in several key regions, primarily due to weather conditions. Additionally, the deferral of 100kt in urea shipments to Ethiopia, with an estimated EBITDA impact of $35 million, contributed to the results.

Ahmed El-Hoshy, CEO of Fertiglobe, noted that the nitrogen outlook remains favorable in the medium to longer term. He said that new supply commissioned in 2022 has been absorbed by the market, and limited major greenfield supply additions are expected in the next four years. Agricultural demand is buoyed by attractive farmer economics, incentivizing nitrogen fertilizer application to replenish decade-low grain stocks.

El-Hoshy further added that the company is progressing several initiatives to further support free cash generation, including the manufacturing improvement plan announced last year. This plan is on track to deliver operational and EBITDA efficiencies over the next 2-3 years. In addition, the company launched an initiative to optimize Fertiglobe’s cost structure, targeting $50 million in annualized savings.

Following the commissioning of the first phase of Egypt Green Hydrogen in Ain Sokhna during COP27 in Q4 2022, Fertiglobe announced the production of on-spec green ammonia at its facilities in Egypt during the quarter. The company expects volumes to ramp up over the year and targets 2023 FID on the full-scale 100MW electrolyzer plant planned to produce up to c.15,000 tons of green hydrogen as feedstock for production of up to 90,000 tons of green ammonia per year in Fertiglobe’s existing ammonia plants.

El-Hoshy reiterated the company’s commitment to delivering on its sustainability agenda and to showing serious progress towards a more sustainable production footprint for themselves while contributing to the decarbonization of other industries in its value chain, including power and transport.

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