Acron Group’s 2019 IFRS Net Profit up 80% to USD 383 Million


23 March 2020

Acron Group’s 2019 IFRS Net Profit up 80% to USD 383 Million

Today Acron (Moscow Exchange and LSE: AKRN) released its audited consolidated IFRS financial statements for 2019.

Key Financials

  • Revenue was RUB 114,835 million, up 6% year-on-year, (2018: RUB 108,062 million). In dollar equivalent, revenue was up 3% to USD 1,774 million from USD 1,723 million.
  • EBITDA* was down 4% year-on-year to RUB 35,749 million (2018: RUB 37,053 million). In dollar equivalent, EBITDA was down 7% to USD 552 million from USD 591 million.
  • EBITDA margin was 31%, against 34% a year before.
  • Net profit was up 86% year-on-year to RUB 24,786 million (2018: RUB 13,318 million). In dollar equivalent, net profit increased 80% to USD 383 million from USD 212 million.
  • Net debt was up 2% to RUB 75,185 million, against RUB 74,025 million as of 2018 year-end. In dollar equivalent, net debt was up 14% to USD 1,215 million from USD 1,066 million.
  • Net debt/EBITDA was 2.1, up from 2.0 as of 2018 year-end. In dollar equivalent, the ratio was 2.2, against 1.8 as of 2018 year-end.

Operating Results

  • Output of key products stood at 7,458,000 tonnes, down 1% year-on-year.
  • Sales of key products totalled 7,569,000 tonnes, up 4% year-on-year.

Alexander Popov, Chair of Acron’s Board of Directors, commented on the results:

“In 2019, Acron Group’s sales hit a record high of 7.6 million tonnes, and the sales geography expanded to cover 78 countries worldwide. Over the course of the year, the Group implemented several investment projects. The ammonia unit upgrades at Dorogobuzh and construction of the nitric acid unit in Veliky Novgorod were completed and operate efficiently. Another two major projects entered the active implementation stage: urea granulation will be commissioned in the second quarter of 2020, and the construction of the Urea-6+ unit will be completed in early 2021. In 2019, the Group made capital investments of USD 294 million, its maximum amount for the last five years.

“That said, declining global mineral fertiliser prices in the second half of the year affected the Group’s financial performance. To address this situation, we decided to slow down implementation of the investment programme and refrain from taking on any new projects until the market recovers. This step will help us temporarily minimise capex and prevent the debt burden from increasing, while meeting performance targets in terms of both operations and dividends. In 2019, the Group allocated USD 221 million in dividends”.


Notes on Key Items in the Financial Statements

Financial Performance

Acron Group’s 2019 revenue was RUB 114,835 million, up 6% year-on-year due to a 4% increase in sales and a 3% increase in the average dollar to rouble exchange rate. Lower global dollar prices for most of the Group’s products prevented revenue from showing stronger growth.

Average Indicative Prices, FOB Baltics/Black Sea

NPK 16-16-16296300-1.1%
Ammonium Nitrate189188+0.3%

In the reporting period, the cost of sales was up 10% year-on-year to RUB 59,784 million, mainly due to higher sales, growing depreciation and amortisation, increased prices for energy and diesel fuel, and greater payroll costs.

Depreciation and amortisation increased following the launch of a new urea unit at the end of 2018 and two nitric acid units in 2019, as well as equipment upgrades at the existing production facilities. Higher payroll costs were due to a 5% increase in the number of Group’s employees required for the development of the Oleniy Ruchey underground mine, implementation of investment projects at Acron and Dorogobuzh, and construction of the Talitsky mine.

Selling, general and administrative expenses were up 15% to RUB 9,332 million as the Group’s expanded international distribution drove an increase in sales, number of employees and leased warehouse capacity. The goal of this expansion is to increase sales to end users.

Transportation expenses were up 17% to RUB 20,774 million, mainly due to increased freight costs amid growing sales to the United States and Latin America on terms that include transportation. In addition, the cost of logistics services outside of Russia increased as the rouble softened.

EBITDA decreased 4% year-on-year to RUB 35,749 million. In the reporting period, EBITDA margin was 31%, against 34% in 2018. Veliky Novgorod-based Acron, Dorogobuzh, and NWPC operated at margins of 38%, 18%, and 23%, respectively. Dorogobuzh’s lower margin in the reporting period was temporary and caused by a stoppage of the ammonia unit to perform upgrades.

In 2019, interest expense declined to RUB 1,115 million from RUB 1,607 million in 2018. Based on 2019 results, the Group posted a net exchange profit of RUB 7,013 million, driven by the revaluation of assets, loans and liabilities, against a RUB 7,043 million loss in 2018. In the reporting period, the gain from the change in the fair value of derivatives was RUB 1,445 million, against a RUB 896 million gain in 2018.
In 2019, net profit increased 86% to RUB 24,786 million, against RUB 13,318 million year-on-year.

Cash Flow

In 2019, net operating cash flow was RUB 28,278 million, almost unchanged year-on-year. In 2019, working capital decreased by RUB 2,084 million, while in 2018, working capital was down RUB 1,025 million.

Net cash used in investing activities in 2019 came in at RUB 19,054 million, against RUB 14,439 million in 2018. Capital expenditures were up 31% to RUB 19,030 million from RUB 14,542 million in 2018. In dollar equivalent, capital expenditures increased 27% to USD 294 million as the Group pursued its Development Strategy.

Net cash allocated to financial activities in 2019 was RUB 7,328 million (2018: RUB 19,643 million). The decline in cash outflow in the reporting period was caused by lower repayment of borrowings. In 2019, net borrowings raised amounted to RUB 8,840 million, against RUB 28 million of net borrowings repaid in 2018. In the reporting period, RUB 14,313 million were paid in dividends (2018: RUB 13,278 million). In dollar equivalent, dividend payments in 2019 stood at USD 221 million against USD 212 million in 2018.

Debt Burden

In 2019, total debt was up 2% to RUB 86,541 million (USD 1,398 million in dollar equivalent). In May 2019, the Group received a two-year extension on its five-year syndicated structured pre-export loan facility for up to USD 750 million, increasing the share of long-term debt to 85% from 79% on 31 December 2018.

Net debt was up 2% from 31 December 2018 to RUB 75,185 million. In dollar equivalent, it was up 14% to USD 1,215 million due to a stronger rouble as of the end of the reporting period compared to 31 December 2018.

As of the end of the reporting period, net debt/LTM EBITDA was 2.1, against 2.0 on 31 December 2018. In dollar equivalent, the ratio increased to 2.2 from 1.8.

Market Trends

Throughout 2019, global mineral fertiliser prices declined. Urea prices were affected by several factors, including slower U.S. consumption amid adverse weather conditions, increased European output due to lower gas prices, and higher Chinese exports. In the fourth quarter, negative price trends encouraged potential buyers to postpone purchases in expectation of lower prices. As a result, by the beginning of 2020 inventories in the key markets had been depleted, which, coupled with seasonal demand in the United States and Europe, contributed to the recovery of prices in the first quarter of 2020. Prices may receive further support when India begins making active purchases amid lower Chinese exports.
As urea prices decreased, AN and UAN prices slumped as well in 2019. NPK prices were under pressure due to lower prices for nitrogen, phosphate, and potash fertilisers. However, the drop in NPK prices was moderate compared to those products, which resulted in the NPK premium over the basic product basket over 20%. Global demand for NPK continues to grow. In particular, Brazil boosted NPK imports 27% to 1.5 million tonnes, of which 63% are supplied by Russian manufacturers. Other countries in the region are also increasing their NPK consumption.
Average Indicative Prices, FOB Baltic Sea/Black Sea

USD/tQ4 2019Q3 2019Q4 2018Q4 2019/
Q3 2019 change
Q4 2019/
Q4 2018 change
NPK 16-16-16270295316-8.3%-14.4%
Ammonium nitrate179196186-8.7%-4.1%

The full version of Acron Group’s financial statements is available at

Note: The exchange rate used for currency conversion was RUB 61.9057 to USD 1 as of 31 December 2019 and RUB 69.4706 to USD 1 as of 31 December 2018. The average exchange rate for 2019 was RUB 64.7361 to USD 1; the average exchange rate for 2018 was RUB 62.7078 to USD 1.

* EBITDA is calculated as operating profit adjusted for depreciation and amortisation, foreign exchange gain or loss on operating transactions, and other non-cash and extraordinary items.

Media Contacts:

Sergey Dorofeev
Anastasiya Gromova
Tatiana Smirnova
Public Relations
Phone: +7 (495) 777-08-65 (ext. 5196)

Investor Contacts:

Ilya Popov
Investor Relations
Phone: +7 (495) 745-77-45 (ext. 5252)

Background Information

Acron Group is a leading vertically integrated mineral fertiliser producer in Russia and globally, with chemical production facilities in Veliky Novgorod (Acron) and the Smolensk region (Dorogobuzh). The Group owns and operates a phosphate mine in Murmansk region (North-Western Phosphorous Company, NWPC) and is implementing a potash development project in Perm Krai (Verkhnekamsk Potash Company, VPC). It owns transportation and logistics infrastructure, including three Baltic port terminals and distribution networks in Russia and China. Acron’s subsidiary, North Atlantic Potash Inc. (NAP), holds mining licences for 11 parcels of the potassium salt deposit at Prairie Evaporite, Saskatchewan, Canada. Acron also holds a minority stake (19.8%) in Polish Grupa Azoty, one of the largest chemical producers in Europe.

In 2019, the Group sold 7.6 million tonnes of various products to 78 countries, with Russia, Brazil, Europe and the United States as key markets.

In 2019, the Group posted consolidated IFRS revenue of RUB 114,835 million (USD 1,774 million) and net profit of RUB 24,786 million (USD 383 million). Acron’s shares are on the Level 1 quotation list of the Moscow Exchange and its global depositary receipts are traded at the London Stock Exchange (ticker AKRN). Acron employs over 11,000 people.

For more information about Acron Group, please visit

About GlobeNewswire

One Liberty Plaza - 165 Broadway
NY 10006 New York

GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

Subscribe to releases from GlobeNewswire

Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from GlobeNewswire

Nordisk næringsliv fokuserer på innovasjon og forbedring av kundeopplevelsen27.1.2020 10:00:00 CETPressemelding

Rapporten ISG Provider Lens™ viser at selskaper i regionen henvender seg til leverandører av digitale forretningstjenester for hjelp med analyse, kunstig intelligens og andre teknologier STOCKHOLM i Sverige, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Næringslivet i de nordiske landene fokuserer på å forbedre kundeopplevelsen og innovasjonen, og kontakter leverandører av digitale forretningstjenester for å nå målene sine. Dette viser en ny rapport som ble publisert i dag av Information Services Group ( ISG ) (Nasdaq: III ), et verdensledende teknologisk forsknings- og rådgivningsselskap. Rapporten 2019-2020 ISG Provider Lens™ Digital Business – Solutions and Service Partners for Norden viser at bedrifter i regionen omfavner teknologier som dataanalyse, kunstig intelligens, tingenes internett og blokkjeder for å levere kvalitetstjenester til kundene sine og for å skille ut seg fra konkurrenter. «Nordiske bedrifter søker transformasjonstjenester fra IT-leverandører for ikke bare å bli veiledet gje

UPM commits to UN Business Ambition for 1.5°C to mitigate climate change27.1.2020 10:00:00 CETPress release

(UPM, Helsinki, 27 January 2020 at 11:00 EET) – UPM commits to the United Nations Global Compact’s Business Ambition for 1.5°C, joining leading companies in a promise to pursue science-based measures to limit global temperature rise to 1.5°C. UPM will strive to mitigate climate change and drive value creation through innovating novel products, committing to a 65% CO2 emission reduction and by practicing sustainable forestry. The 1.5°C ambition is a response to increasing concern about the severe consequences of a failure to stop global warming. UPM is among the first global forest industry companies making this commitment. “UPM has a unique opportunity to make a positive impact and contribute to mitigating climate change by tangible actions. We innovate climate-positive products and turn them into growing businesses. At the same time, we limit risks from climate mitigation policies and physical impacts of changing climate. This is important for the long-term value of the company,” says

Valmet to supply a board machine rebuild to Umka in Serbia27.1.2020 10:00:00 CETPress release

Valmet Oyj’s press release on January 27, 2020 at 11:00 a.m . EET Valmet will supply a board machine rebuild to Umka Cardboard Mill in Serbia. The main target of the rebuild is to increase the customer’s production capacity. The start-up of the rebuilt paper machine PM 1 is scheduled for the second half of 2021. The order is included in Valmet's orders received of the fourth quarter 2019. The value of the order will not be disclosed. The total value of an order of this type is typically around EUR 15-20 million. "This rebuild is one of the most important strategic decisions we have made in the course of 80 years long history of the mill. We are pleased that this project is going to be completed by Valmet, a global leader in the supply of process technology in the paper industry. I strongly believe in the success and bright future of Umka Cardboard Mill, with planned capacity of over 200,000 tonnes, further quality improvements and wider product portfolio,” says Milos Ljusic, Managing D

Nordic Enterprises Focus on Innovation and Improving Customer Experience27.1.2020 10:00:00 CETPress release

ISG Provider Lens™ report finds companies in the region turning to digital business services providers for help with analytics, artificial intelligence and other technologies STOCKHOLM, Sweden, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Enterprises in the Nordic countries are focused on improving customer experience and enhancing innovation, and they are turning to digital business service providers to achieve their goals, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm. The 2019-2020 ISG Provider Lens™ Digital Business – Solutions and Service Partners Report for the Nordics finds enterprises in the region embracing technologies such as data analytics, artificial intelligence, the Internet of Things and blockchain to deliver quality services to their customers and to differentiate themselves from competitors. “Nordic enterprises are seeking transformation services from IT providers to not only ta

Nordiska företag fokuserar på innovation och förbättrar kundupplevelsen27.1.2020 10:00:00 CETPressemelding

Rapport från ISG Provider Lens™ visar att företag i regionen vänder sig till leverantörer av digitala företagstjänster för hjälp med analys, artificiell intelligens och annan teknik STOCKHOLM, Sverige, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Företag i Norden är inriktade på att förbättra kundupplevelse och innovation, och de vänder sig till leverantörer av digitala företagstjänster för att uppnå sina mål, enligt en ny rapport publicerad idag av Information Services Group ( ISG ) (Nasdaq: III ), ett ledande företag inom global teknikforskning och -rådgivning. Rapporten Digital verksamhet – lösningar och servicepartners2019–2020 från ISG Provider Lens™ för Norden visar att företag i regionen anammar teknik som dataanalys, artificiell intelligens, sakernas internet och blockkedja för att leverera kvalitetstjänster till sina kunder och för att utmärka sig bland konkurrenterna. ”De nordiska företagen söker transformationstjänster från IT-leverantörer för att inte bara ta dem genom sina digitala r

Roche submits supplemental Biologics License Application to the FDA for Tecentriq in combination with Avastin for the most common form of liver cancer27.1.2020 07:00:00 CETPress release

·Application is being reviewed under FDA’s Real-Time Oncology Review pilot programme Basel, 27 January 2020 – Roche (SIX: RO, ROG; OTCQX: RHHBY) today announced the completion of a supplemental Biologics License Application (sBLA) submission to the US Food and Drug Administration (FDA) for Tecentriq® (atezolizumab) in combination with Avastin® (bevacizumab), for the treatment of people with unresectable hepatocellular carcinoma (HCC) who have not received prior systemic therapy. The FDA is reviewing the application under the Real-Time Oncology Review pilot programme, which aims to explore a more efficient review process to ensure safe and effective treatments are available to patients as early as possible. In July 2018, the FDA granted Breakthrough Therapy Designation for Tecentriq in combination with Avastin in HCC based on data from an ongoing Phase Ib trial. “Liver cancer is the most rapidly increasing cause of cancer-related death in the United States. In the IMbrave150 study, Tece