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PhosAgro: 1Q21 operating results – Fertilizer sales up 2.6% y/y

  • PhosAgro delivered a solid set of numbers, which highlights the corresponding y/y growth in production and sales
  • The geography of sales saw a strong increase in Latin America for phosphates
  • PhosAgro reported that the increase in fertilizer prices on global markets supported sales in 1Q21

PhosAgro (PHOR: LI; O/W; TP $21.4/GDR) delivered a solid set of numbers, which highlights the corresponding y/y growth in production and sales. Expectedly, sales volumes jumped quarter-on-quarter on carry-over supply from last year perceived as a strategic move amid growing prices. PhosAgro produced a total of 2.6 mn t of fertilizers and other products, which is up 2.3% y/y. NPK production volumes grew c.12% y/y on equipment upgrades. Sales volumes reached 2.8 mn t, up 2.6% y/y. We note a 5.1% y/y decrease in DAP/MAP sales attributable to delays in the dispatch of several vessels due to severe weather conditions. NPK/NPS sales grew c.4% and c.5% y/y in response to healthy demand on the European, Russian and LATAM markets. The share of value-added NPK(S) brands reached 49% vs. 47% recorded last year. Nitrogen fertilizer sales grew 12% y/y also on back of robust demand.

The geography of sales saw a strong increase in Latin America for phosphates and in North America for nitrogen fertilizers. Sales to Russia were lower - roughly 5% down for both phosphate and nitrogen based fertilizers. We view it as a consequence of higher exports driven by seasonal demand. Volume wise Russia remains the core market for PhosAgro. Total export sales reached 2 mn t while shipments to the domestic market came in at 0.9 mn t, representing a meaningful increase vs the previous quarter.

PhosAgro reported that the increase in fertilizer prices on global markets supported sales in 1Q21. Phosphate-based fertilizer prices were seen rising through the first quarter. March highs for Brazil MAP reached $635-645/t CFR basis. DAP prices in India ended March at $515/t CFR, up from $445-$446/t vs month earlier. A slight price correction from the current level of phosphates is possible due to the start of the off-season in the US, Europe and China. As crop prices remain high, we assume the price correction to have a limited effect on fertilizer prices and reiterate our positive view on the investment case of PhosAgro.


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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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