Aug. 11, 2016
EuroChem Group AG recently reported consolidated sales for the second quarter of 2016 of $1.01 billion, as compared to $1.14 billion in the second quarter of 2015 as the significantly lower product pricing environment overshadowed higher sales volumes. Relatively strong first quarter results helped keep first-half 2016 sales within 4% of last year’s results. The Group realised $2.27 billion in sales during the first six months of 2016, as compared to $2.37 billion in the first half of 2015.
Second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) declined 37% year-on-year to $202 million as lower fertilizer and iron ore prices muted the effects of favourable currency dynamics. The Group’s first-half EBITDA amounted to $586 million, which represented a 25% decline on first-half 2015 EBITDA of $779 million. The EBITDA margin for the first six months of 2016 was 26%. A second-quarter contribution of $115 million lifted first-half net profit to $436 million (1H 2015: $518 million).
Excluding raw material mining products and hydrocarbons, first-half nitrogen and phosphates sales volumes increased 4% to 5.6 million tonnes (MMT), as compared to the same period last year. The Group sold 2.8 MMT of iron ore and baddeleyite concentrates during the first six months of the year (1H-15: 2.8 MMT). Over the same period, the acquisition of the BenTrei distribution assets spurred a 93% year-on-year growth in third-party product sales, which amounted to 1.8 million tonnes, as compared to 948 KMT in the first six months of 2015.
EuroChem Group CEO Dmitry Strezhnev commented: “While the second quarter is traditionally the weakest quarter for us, and the near-term fertilizer outlook remains challenging, the fundamentals of our industry remain structurally sound for competitive producers. Accordingly, we took further steps to anchor our distribution footprint in key markets as we look to start potash production to over the next 18 months.”