Acron Group’s H1 2019 IFRS Net Profit Increases Five Fold to USD 263 Million
26 August 2019
Acron Group’s H1 2019 IFRS Net Profit Increases Five Fold to USD 263 Million
Today, Acron Group (Moscow Exchange and LSE: AKRN) released its consolidated IFRS financial statements for H1 2019.
- Revenue was up 22% year-on-year to RUB 60,472 million (H1 2018: RUB 49,413 million). In US dollar equivalent, revenue was up 11% to USD 926 million from USD 833 million.
- EBITDA* was up 34% year-on-year to RUB 21,035 million (H1 2018: RUB 15,666 million). In US dollar equivalent, EBITDA was up 22% to USD 322 million from USD 264 million.
- EBITDA margin was up to 35%, against 32% year-on-year.
- Net profit increased by a factor of 5 year-on-year to RUB 17,196 million (H1 2018: RUB 3,425 million). In US dollar equivalent, net profit increased by a factor of 4.6 to USD 263 million from USD 58 million.
- Net debt was down 3% to RUB 71,896 million (31 December 2018: RUB: 74,025 million). In US dollar equivalent, net debt was up 7% to USD 1,140 million from USD 1,066 million.
- Net debt/LTM EBITDA** was down to 1.7 against 2.0 as of 31 December 2018. In US dollar equivalent, the ratio remained flat at 1.8 as of 31 December 2018.
- Output of key products was 3.803 million tonnes, up 1.5% year-on-year.
- Sales of key products increased 4.7% year-on-year to 3.835 million tonnes.
Alexander Popov, Chairman of Acron’s Board of Directors, commented on the results:
“We are glad to report Acron Group’s strong financial performance in H1 2019. The Group’s EBITDA was up 22% to USD 322 million, while EBITDA margin increased to 35%.
“In H1 2019, we continued implementing investment projects as part of our Development Strategy. We allocated USD 127 million to capital expenditures, up 22% year-on-year. At Acron (Veliky Novgorod), we put on stream two nitric acid units and started constructing the third one, which is expected to be put into operations by the end of this year. In 2019, we plan to complete construction of the urea granulation unit as well, which will produce a premium product. This year, Dorogobuzh finalises upgrades to ammonia unit, increasing its capacity. At the Oleniy Ruchey phosphate mine, the Group continues developing the underground mine, which in future allow us to increase the output.
“We made certain progress in implementing the Talitsky potash project by completing 70% of the vertical shaft sinking. In addition, we signed the Special Investment Contract with the Government of Perm Krai and the Ministry of Industry and Trade of the Russian Federation and agreed upon the preliminary terms of project financing with banks.
“Acron Group’s debt burden stays moderate. As of the end of the reporting period, net debt/EBITDA in dollar equivalent remained flat at 1.8 against the beginning of the year. Taking into account the Group’s stable financial position, Acron’s Board of Directors has recommended paying dividends twice since the beginning of the year. The general meeting approved these recommendations. The Board of Directors plans to make the third recommendation in 2019”.
Notes on Key Items in the Financial Statements
Acron Group posted H1 2019 revenue of RUB 60,472 million, up 22% year-on-year. This was due to a 4.7% increase in sales volume, higher global dollar-nominated prices for the Group's most products, as well as a 10% increase in the average USD-RUB exchange rate.
Average Indicative Prices, FOB Baltic Sea/Black Sea
|USD/t||H1 2019||H1 2018||Change|
In the reporting period, the cost of sales was up 15% year-on-year to RUB 30,380 million, mainly due to higher labour cost, increased prices for energy and power, and higher depreciation and amortisation.
The higher labour cost was due to increase in a number of employees to develop the Oleniy Ruchey underground mine, payment of bonuses for the launch of new production units at Acron (Veliky Novgorod) and higher payroll expenses on employees whose salary is denominated in foreign currency and affected by a weaker rouble. Depreciation and amortisation increased following the launch of a new urea unit in November 2018 and an equipment upgrade performed at existing production facilities, including an upgrade of NPK and urea units at Veliky Novgorod site.
Selling, general and administrative expenses were up 17% to RUB 4,823 million, mainly due to higher personnel costs driven by the development of the Group’s international distribution segment and increase in fees paid to third parties in accordance with the commercial strategy to increase sales to end users.
Transportation expenses were up 23% to RUB 9,413 million mainly due to increased sales to the USA and Latin America on terms that include transportation. In addition, the cost of logistics services outside of Russia increased due to a weaker rouble. Railcar lease rates were also up.
EBITDA increased 34% year-on-year to RUB 21,035 million. In the reporting period, EBITDA margin was 35%, against 32% in H1 2018. Veliky Novgorod-based Acron, Dorogobuzh and NWPC operated at margins of 38%, 24% and 15%, respectively.
In H1 2019, interest cost increased to RUB 941 million from RUB 367 million in H1 2018 due to lower loan expenses capitalised in the value of construction in process and mining licences cost.
Based on H1 2019 results, the Group posted a net exchange profit of RUB 5,909 million due to the revaluation of assets, loans and liabilities, against RUB 2.189 million loss in H1 2018. In the reporting period, the gain from change in fair value of derivatives was RUB 941 million against a RUB 1.778 million loss in H1 2018.
In H1 2019, net profit increased by a factor of 5 to RUB 17,196 million, against RUB 3,425 million year-on-year.
In H1 2019, net operating cash flow increased 25% to RUB 11,880 million (H1 2018: RUB 9,467 million). This jump was mainly due to an increase in net profit. In the reporting period, working capital increased by RUB 3,796 million, while in H1 2018, working capital was up RUB 3,185 million.
Net cash used in investing activities in H1 2019 was RUB 8,082 million, against RUB 6,894 million in H1 2018. Capital expenditures were up 34% to RUB 8,314 million from RUB 6,201 million in H1 2018. In dollar equivalent, capital expenditures increased 22% to USD 127 million due to implementation of investment projects as part of the Group’s Development Strategy.
Net cash allocated to financial activities in H1 2019 was RUB 5,016 million, while in H1 2018 the Group generated RUB 2,052 million from financial activity. In the reporting period, the cash outflow was caused by a decrease in proceeds from borrowings. In H1 2019, net borrowings were down to RUB 1,625 million against RUB 12,701 million in H1 2018. In the reporting period, RUB 5,573 million were paid as dividends (H1 2018: RUB 5,094 million).
In H1 2019, total debt was down 5% to RUB 82,276 million. In US dollars equivalent, it increased 5% to USD 1,273 million due to stronger rouble as of the end of the reporting period compared to the beginning of H1 2019.
In May 2019, the Group extended for two years the five-year syndicated structured pre-export loan facility for USD 750 million, increasing the share of long-term debt to 83% from 79% on 31 December 2018.
The net debt was down 3% to RUB 71,896 million against the net debt as of 31 December 2018. In US dollar equivalent, it was up 7% to USD 1,140 million due to a stronger rouble.
As of the end of the reporting period, net debt / LTM EBITDA denominated in roubles was 1.7 against 2.0 on 31 December 2018, remaining flat in US dollar equivalent at 1.8.
In Q2 2019, the global urea prices recovered from the seasonal decrease in the beginning of 2019. The urea price was up 3% to USD 250 FOB Baltics against the Q1 2019. The price recovered due to a strong demand in India and Latin America and was supported by high production costs in China.
The AN prices increased in Q2 2019 as urea prices recovered. The average AN price was USD 197 FOB Baltics, up 8% against Q1 2019. However, the UAN prices were under pressure. The average UAN price was down 23% against Q1 2019 to USD 138 FOB Baltics. The UAN price slid was impacted by the introduction of import duties in the EU and unfavourable weather in the United States since these two markets are the key UAN markets. In order to obtain higher netbacks, Acron Group advances its sales to end customers and expands its sales geography. For instance, the Group commenced the direct shipments to Argentina in May 2019.
In Q2 2019, the NPK price remained relatively stable. The support from increasing nitrogen fertiliser prices was offset by decrease in phosphate and potash fertiliser prices. In Q2 2019, NPK premium over the basic product basket was high at approximately 20%.
Average Indicative Prices, FOB Baltic Sea/Black Sea
|USD/t||Q2 2019||Q1 2019||Q2 2018||Q2 2019 / Q1 2019 change||Q2 2019 / Q2 2018 change|
The full version of Acron Group’s financial statements is available at www.acron.ru/en
Note: The exchange rate used for currency conversion was RUB 63.0756 to USD 1 as of 30 June 2019 and RUB 69.4706 to USD 1 as of 31 December 2018. The average exchange rate for the first six months of 2019 was RUB 65.3384 to USD 1. The average exchange rate for the first six months of 2018 was RUB 59.3536 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.
** LTM EBITDA is EBITDA calculated for the past 12 months.
Phone: +7 (495) 777-08-65 (ext. 5196)
Phone: +7 (495) 745-77-45 (ext. 5252)
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 2018, the Group sold 7.3 million tonnes of various products to 67 countries, with Russia, Brazil, Europe and the United States as key markets.
In 2018, the Group posted consolidated IFRS revenue of RUB 108,062 million (USD 1,723 million) and net profit of RUB 13,318 million (USD 212 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 approximately 11,000 people.
For more information about Acron Group, please visit www.acron.ru/en.
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
Brunel stops activities in BIS - Earnings outlook substantially adjusted downwards22.10.2019 20:00:00 CEST | Press release
Amsterdam, 22 October 2019 BIS activities are loss-making and causing one-off costs Profitability further under pressure due to the performance in the Netherlands and expected tougher conditions in Germany After careful consideration, Brunel has decided to stop Brunel Industrial Services (BIS) in Texas, US. Since 2017, BIS has worked on various construction and maintenance projects, including large projects in shale oil & gas. As announced in Brunel´s Q2 results this August, we encountered issues with a project for a water treatment plant, which we won in 2018, leading to a one-off loss of EUR 5.5 million. We replaced the general manager and rebuild the organization, but at the same time we saw the market for shale oil & gas experiencing a slowdown with changing clients’ behavior in their contracting model from T&M to fixed pricing. As a consequence, our BIS-activities in Q3 were at a very low level, causing a disbalance with our organizational capacity and resulting in significant ope
Telenor Group and NENT Group to merge Canal Digital and Viasat Consumer22.10.2019 19:14:00 CEST | Press release
(Fornebu/Stockholm, 22 October 2019) Telenor Group and Nordic Entertainment Group (NENT Group) today announced the formation of a new company that combines Canal Digital and Viasat Consumer (satellite pay-TV & broadband-TV operations). This will create a vibrant Nordic TV distribution business and capture synergies in a maturing direct-to-home (DTH) segment. Telenor and NENT Group will each hold 50 percent of the new company. Highlights: The combination generates a Nordic player with combined net sales of approximately NOK 7 billion and around 1.25 million subscribers (Q2 2019). The combination is expected to yield peak annual cost synergies of approximately NOK 600 million, with full effect from 2022. Integration and other related costs are expected to total approximately NOK 830 million. The company will be headquartered in both Oslo and Stockholm, and will also have a substantial presence in Copenhagen. The joint venture will operate at arm’s length to its parents. The Nordic consum
Telenor og NENT slår sammen Canal Digital og Viasat Consumer22.10.2019 19:14:00 CEST | Pressemelding
(Fornebu / Stockholm, 22. oktober 2019) Telenor og Nordic Entertainment Group (NENT) kunngjør i dag opprettelsen av et nytt selskap som kombinerer Canal Digital og Viasat Consumer (satellitt- og bredbånds-TV). Dette vil skape en fremoverlent nordisk TV-distribusjonsvirksomhet og hente synergier i et modent direct-to-home segment (DTH). Telenor og NENT vil hver eie 50 prosent av det nye selskapet. Nøkkeltall Transaksjonen resulterer i et selskap med en total omsetning på ca 7 milliarder NOK og i overkant av 1,25 millioner kunder (Q2 2019). Transaksjonen er forventet å gi årlige synergier på inntil 600 millioner NOK med helårseffekt fra 2022. Det er forventet inntil 830 millioner NOK i integrasjonskostnader. Selskapet vil ha hovedkontorer i både Oslo og Stockholm, og vil også ha en betydelig tilstedeværelse i København. Selskapet vil operere på armlengdes avstand i forhold til eierne. Det nordiske kundetilbudet vil fokusere på satellittdistribuert betal-TV (DTH) og strømmetjenester, sam
Scanship Holding ASA : Presentation of 3Q 2019 Trading update, including contract awards on 22 October22.10.2019 16:59:00 CEST | Press release
Please find enclosed the presentation of the 3Q 2019 Trading update for Scanship Holding ASA, including the contract awards received the 22 October on the order backlog. For further queries, please contact: Henrik Badin - CEO Scanship Holding ASA Tel: +47 90 78 98 25 Email: firstname.lastname@example.org ABOUT SCANSHIP HOLDING ASA Scanship delivers world leading solutions for cleaner oceans in the Cruise and Aquaculture industries. Scanship provides advanced technologies for processing waste and purifying wastewater. Owners operating Scanship systems have the solution to convert all waste and wastewater into clean energy and purified water which meets the highest international discharge standards. Any residuals from the Scanship processes can be recovered for reuse. This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. Attachment 22102019_Scanship Holding ASA - 3Q2019 Trading Update with contract awards after presentation
European Commission has published a decision on the compatible state aid22.10.2019 16:58:00 CEST | Press release
European Commission has published a decision on the compatible state aid confirming that the measures proposed by the Republic of Lithuania to reduce the costs of maintenance of LNG terminal are compatible with the internal market and fulfil the criteria for state aid. The measures approved in this decision will create legal preconditions to reduce the costs of maintenance of LNG terminal by the amount of up to EUR 135,5 mln. until 2024. Further decisions will be approved by the Board and the General Meeting of Shareholders of AB Klaipedos nafta. More information on the approval of the European Commission is provided on the following: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_53074 Jonas Lenkšas, Chief Financial Officer, +370 694 80594
Scanship Holding ASA : Scanship awarded clean ship system contracts and increases backlog to new record high22.10.2019 15:45:00 CEST | Press release
Scanship Holding ASA, through its subsidiary Scanship AS, has been awarded contracts with an European shipbuilder for the supply of a total Scanship clean ship system for two luxury and expedition class type of cruise ships. The newbuilds will enter service in 2022 and 2023. The contracts also include options for further deliveries to 6 newbuilds planned to enter service from 2024 and onwards. The luxury vessels will be delivered to one of the major US based shipowners. More details will be announced in relation to these contracts at a later stage. The Scanship contracts includes delivery of systems for food waste processing, garbage handling and wastewater purification, to meet the industry's highest environmental regulations worldwide and particularly the new regulations now being enforced in the Baltic Sea. This latest order intake accumulates the total order backlog to a record high level of NOK 710 million firm and NOK 570 million of optional contracts. For further queries, please