27 April 2018
Acron Group's Output Up 7% in Q1 2018
Group's Consolidated Output
(including operating results for Acron, Dorogobuzh
and North-Western Phosphorous Company)
| Product, '000 t | Q1 2018 | Q1 2017 | YOY, % |
| MINERAL FERTILISERS | |||
| Ammonia | 667 | 648 | 2.8 |
| Incl. in-house consumption | 558 | 492 | |
| Nitrogen fertilisers | 1,064 | 976 | 9.0 |
| Incl. in-house consumption | 271 | 271 | |
| AN | 499 | 475 | 5.0 |
| Incl. in-house consumption | 135 | 142 | |
| Urea* | 249 | 204 | 22.5 |
| Incl. in-house consumption | 136 | 129 | |
| UAN | 316 | 297 | 6.3 |
| Complex fertilisers | 699 | 674 | 3.7 |
| Incl. in-house consumption | 16 | 17 | |
| NPK | 586 | 541 | 8.4 |
| Incl. in-house consumption | 16 | 17 | |
| Bulk blends | 113 | 133 | -15.2 |
| Total commercial output for Mineral Fertilisers | 1,584 | 1,518 | 4.5 |
| INDUSTRIAL PRODUCTS | |||
| Organic synthesis products | 115 | 111 | 3.3 |
| Incl. in-house consumption | 58 | 55 | |
| Methanol | 26 | 25 | 7.2 |
| Incl. in-house consumption | 21 | 20 | |
| Formalin | 42 | 41 | 2.3 |
| Incl. in-house consumption | 36 | 35 | |
| Urea-formaldehyde resins | 47 | 46 | 2.0 |
| Incl. in-house consumption | 199 | 193 | 2.8 |
| Non-organic compounds | 41 | 40 | 1.9 |
| Low-density and technical-grade AN | 27 | 15 | 84.6 |
| Industrial urea* | 119 | 126 | -5.8 |
| Calcium carbonate | 10 | 11 | -4.9 |
| Liquid carbon dioxide | 2 | 1 | 15.6 |
| Argon | 256 | 249 | 2.7 |
| Total commercial output for Industrial Products | 115 | 111 | 3.3 |
PHOSPHATE INPUTS | |||
| Apatite concentrate | 312 | 226 | 38.1 |
| Incl. in-house consumption | 253 | 220 | |
| Total commercial output for apatite concentrate | 59 | 5 | increased 11 times |
| TOTAL COMMERCIAL OUTPUT | 1,900 | 1,773 | 7.1 |
Note:
Commercial output is output less in-house consumption.
* Q1 2017 data is adjusted due to reclassification of a part of urea as an industrial urea
Chairman of Acron's Board of Directors Alexander Popov commented on the results:
"In Q1 2018, commercial products output increased 7% year-on-year to 1.9 million tonnes, setting yet another record. Mineral fertiliser output was up 4.5% to 1.6 million tonnes.
"The Group's facilities increased ammonia output 3%. Output at the new Ammonia-4 unit was 208,000 tonnes, up 5% year-on-year. In 2017, the unit reached its capacity of 2,300 tonnes per day, and we plan to increase that to 2,500 tonnes per day following further improvements. Additionally, the total ammonia output growth at the Group's sites made it possible to increase production of nitrogen and complex fertilisers.
"In 2017, Acron's site in Veliky Novgorod implemented a number of measures to modernise its urea units, and that boosted output in Q1 2018 to 249,000 tonnes, up 22% year-on-year. Further expansion in the works: our Veliky Novgorod site is building a sixth urea unit with capacity of 600 tonnes per day. Once the new unit is launched this autumn, total urea capacity will increase to 3,650 tonnes per day. There was also a significant increase in high-quality industrial urea production (including for AdBlue), which was up 85% to 27,000 tonnes.
"AcronGroup's complex fertiliser production was up 4% year-on-year. NPK output was up 8% due to a project implemented in 2017 that increased capacity at the two Veliky Novgorod-based NPK units. Blends production at the Dorogobuzh site was down 15% to 113,000 tonnes.
"In Q1 2018, apatite concentrate output was up 38% year-on-year, mainly due to decreased overburden operations at the open-pit mine compared to Q1 2017. Production at the underground mine is up: in the reporting period, 159,000 tonnes of ore were produced."
Market Trends
Following a slump in December 2017, urea prices recovered in Q1 2018 as seasonal demand picked up. In March, prices reached USD 230 FOB Baltics. It should be noted that the price of coal, which is the main feedstock for urea production in China, continues to grow, which makes most of that country's producers uncompetitive in foreign markets at the current price level. As a result, China is expected to post a further decrease in capacity utilisation and lower exports, as its focus moves to the domestic market. These developments support global prices for urea.
AN prices were down as the premium decreased following the strong autumn season. At the same time, UAN was in high demand and its prices remained stable.
In Q1 2018, NPK prices continued their climb that started in autumn 2017 due to an upward trend in potash and phosphate feedstock prices and strong seasonal demand. The premium over the product basket remained the same.
Average Indicative Prices, USD/t, FOB Baltic/Black Sea
| Q1 2018 | Q4 2017 | Q1 2017 | Q1 2018 / Q4 2017 change | Q1 2018 / Q1 2017 change | |
| NPK 16-16-16 | 284 | 271 | 262 | +4.6% | +6.6% |
| AN | 186 | 218 | 202 | -14.6% | -7.8% |
| UAN | 162 | 162 | 158 | 0.0% | +2.7% |
| Urea | 224 | 239 | 237 | -6.4% | -5.5% |
| Ammonia | 284 | 286 | 302 | -0.7% | -6.0% |
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 has a wholly owned 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 licenses for 13 parcels of the potassium salt deposit at Prairie Evaporite, Saskatchewan, Canada. Acron also holds a minority stake (19.8%) in Polish Grupa Azoty S.A., one of the largest chemical producers in Europe.
In 2017, the Group sold 7.3 million tonnes of various products to 65 countries, with Russia, Brazil, Europe and the United States as key markets.
In 2017, the Group posted consolidated IFRS revenue of RUB 94,342 million (USD 1,617 million) and net profit of RUB 14,260 million (USD 244 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.