Warsaw, August 14th 2014
Press release
Strong financial performance in difficult market conditions
Grupa Azoty delivers strong performance in the first half of 2014. The Company generated operating profit (EBIT) of PLN 285m (H1 2013: PLN 788m) and net profit of nearly PLN 235m (H1 2013: PLN 771m), with revenue slightly above PLN 5bn (H1 2013: PLN 5.2bn). The period's weaker year-on-year performance was attributable to the accounting for the Puławy acquisition, recognised as a non-recurring event in 2013. However, the Company's actual results are above the market expectations.
“Net of non-recurring events, the adjusted EBIT and EBITDA margins decreased slightly from 7% and 12% to 6% and 11%, respectively, on the back of adverse pricing environment, especially in the Fertilizers segment,” said Andrzej Skolmowski, Vice-President of the Grupa Azoty Management Board, when asked to comment on the Company's performance.“Declining prices forced us to increase sales volumes and move into new markets. We successfully reduced costs thanks to lower prices of raw materials and synergies generated across the Group,” Mr Skolmowski added.
“Despite the price pressures in the Fertilizers segment, we managed to deliver financial results above the market expectations. Our strategy yields tangible positive results, as do our consolidation efforts and the capital expenditure programme we are currently implementing. Consequently, the Company outperformed its peers despite the challenging market environment,” said Paweł Jarczewski, President of the Management Board of Grupa Azoty S.A.
In H1 2014, Grupa Azoty took advantage of the opportunities offered by the deregulation of the Polish natural gas market.Lower commodity prices on the global markets and the large supply of gas on the domestic market drove down the prices of natural gas and hard coal on the power exchange by 7%−9% and 12%−13%, respectively, allowing the Company to deliver a solid EBITDA margin of 13% in the Fertilizers segment.
Consolidated results of Grupa Azoty S.A.
H1 2013 / H1 2014 / Change / Q2 2013 / Q3 2013 / Q4 2013 / Q1 2014 / Q2 2014Revenue / 5,247 / 5,073 / ↘ / 2,569 / 2,226 / 2,348 / 2,703 / 2,370
EBIT / 788 / 285 / ↘ / 369 / -9 / -77 / 182 / 103
EBITDA / 1,085 / 564 / ↘ / 555 / 111 / 57 / 325 / 239
EBITDA* / 639 / 564 / ↘ / 283 / 111 / -13 / 325 / 239
Net profit / 771 / 235 / ↘ / 360 / 0.2 / -57 / 149 / 86
Grupa Azoty's consolidated revenue by segment
In the Chemicals Segment (which includes the former OXO segment and concentrates on the manufacture of melamine, technical-grade urea, sulfur and pigments), revenue increased by over 3% year-on-year, while the EBITDA margin remained broadly flat at 7%, chiefly on the back of the Siarkopol acquisition and lower prices of raw materials (natural gas for urea and melamine manufacture, and ilmenite, used to manufacture titanium white).
The Plastics Segment saw prices of highly-processed products (Tarnamid and Alphalon) stabilise, which, accompanied by a slight year-on-year decline in prices of such raw materials as benzene and phenol, translated into higher profitability (EBITDA margin up to -1%, from -3%). This was primarily a result of the difficult situation on the caprolactam market, with strong price competition seen in Europe and elevated supply in the Middle East.
Grupa Azoty Puławy Group's consolidated results
In Q4 2014, Grupa Azoty Puławy earned net profit of PLN 74m (down from PLN 105m last year), on revenue of nearly PLN 0.88bn (down from PLN 0.93bn last year).
Q1-4 12/1312M / Q1-4 13/14
12M / Change / Q4 12/13
Q2 2013 / Q1 13/14
Q3 2013 / Q2 13/14
Q4 2013 / Q3 13/14
Q1 2014 / Q4 13/14
Q2 2014
Revenue / 3,886 / 3,626 / ↘ / 930 / 840 / 923 / 983 / 880
EBIT / 429 / 230 / ↘ / 110 / 19 / 21 / 111 / 80
EBITDA / 554 / 379 / ↘ / 142 / 55 / 57 / 149 / 118
Net profit / 390 / 209 / ↘ / 105 / 18 / 19 / 98 / 74
Grupa Azoty Police Group's consolidated results
In H1 2014, Grupa Azoty Police earned net profit of PLN 42m, on revenue of nearly PLN 1.25bn.
Q2 2013 / Q3 2013 / Q4 2013 / Q1 2014 / Q2 2014 / Q2/Q1 change / H1 2014Revenue / 728 / 510 / 500 / 632 / 617 / ↘ / 1,249
EBIT / 32 / 5 / -21 / 20 / 32 / ↗ / 52
EBITDA / 53 / 24 / 4 / 51 / 52 / ↗ / 102
Net profit / 23 / 7 / -13 / 15 / 26 / ↗ / 42
Grupa Azoty Zakłady Azotowe Kędzierzyn's consolidated results
In H1 2014, Grupa Azoty ZAK earned net profit of PLN 69m (down from PLN 84m last year), on revenue of PLN 1.04bn (down from PLN 1.07bn last year).
2012 / 2013 / y/y change / Q4 2012 / Q1 2013 / Q2 2013 / Q3 2013 / Q4 2013Revenue / 1,074 / 1,043 / ↘ / 530 / 474 / 528 / 572 / 471
EBIT / 96 / 79 / ↘ / 44 / 2 / 0 / 47 / 33
EBITDA / 133 / 124 / ↘ / 63 / 21 / 20 / 69 / 54
Net profit / 84 / 69 / ↘ / 39 / 5 / -4 / 39 / 31
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The Grupa Azoty Group, whose parent is Grupa Azoty S.A. of Tarnów, is one of the leading players on the European fertilizer and chemical markets, formed through successive acquisitions of Polish chemical companies. The Group now comprises a number of entities, including: Grupa Azoty S.A. (the Parent), Grupa Azoty Zakłady Azotowe Puławy S.A, Grupa Azoty Zakłady Chemiczne Police S.A., and Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. Grupa Azoty S.A. is currently the second largest EU-based manufacturer of nitrogen and compound fertilizers, and its other products, including melamine, caprolactam, polyamide, oxo alcohols and titanium white, enjoy a strong standing in the chemical sector, with a wide range of applications in various industries. For 2013, the Grupa Azoty Group reported revenue of PLN 9.8bn (2012: PLN 7.1bn), net profit of PLN 714m (2012: PLN 315m) and operating profit (EBIT) of PLN 703m (2012: PLN 372m). Grupa Azoty S.A. has been listed on the Warsaw Stock Exchange since 2008, and since 2013 it has been a constituent of the new WIG30 index. Since 2009, the Company has also been included in the RESPECT Index, the first CSR-focused index in Central and Eastern Europe, and since 2013 – in the MSCI Emerging Markets index.
For more information, please contact:
Grzegorz Kulik
Grupa Azoty Group Press Officer
mobile: +48 785 780 005
email: