For Immediate Release 23 August 2017
PhosAgro CEO Presents Achievements of Past 4 Years
Moscow -The Board of Directors of PhosAgro (Moscow Exchange, LSE: PHOR), one of
the world's leading vertically integrated phosphate-based fertilizer producers,
today heard a report by Andrey Guryev about the results of his four years as
Chief Executive Officer of the Company, and received information about the
development of the Company's strategy to 2025, as well as about implementation
of the strategy to 2020.
In his report addressed to the Board of Directors on the results of PhosAgro's
performance over the past four years during which he was CEO, Andrey Guryev
noted: "The team and I have achieved good results thanks to a comprehensive
approach to improving the efficiency of our operations, investment in the
modernisation of existing facilities, and the construction of new high-tech
production lines. We have strengthened our reputation and confirmed our status
as a reliable and profitable company for our shareholders, employees, customers
and other stakeholders.
"We intend to continue to strengthen Company's position on domestic and
international markets. We have gig plans for PhosAgro's development. Our role
in the global food chain will grow, as we produce a high-quality product that
is unique in its purity."
The key investment project under the Company's strategy to 2020 is the
construction of a high-tech ammonia production facility with a capacity of 760
ths tonnes/year that will be commissioned this year. This new production line
is an integral part of the Russian Federation's Strategy for the Development of
the Chemical and Petrochemical Industry through 2030. PhosAgro-Cherepovets will
also commission a new 500 ths tonne/year urea shop. Completion of these two
large-scale projects may enable PhosAgro to increase its production capacity
from 2016 levels by nearly 24%, to 9.2 mln tonnes, by 2020.
Other facilities that were constructed and commissioned in the last four years
· Aluminium fluoride facility, the production capacity of which increased
from 23 ths tonnes/year to 43 ths tonnes/year at PhosAgro's Cherepovets
· Complex PKS fertilizers line with a capacity of up to 100 ths tonnes/
year at the Company's Volkhov production site;
· Liquid ammonia storage facility with a capacity of 8 ths tonnes at the
Balakovo production site;
· The second Yuksporsky tunnel, main shaft No. 2 and expansion of the
ANOF-3 beneficiation plant from 6.5 mln tonnes to 7.7 mln tonnes at Apatit,
with the mid-term possibility of increasing capacity to 9 mln tonnes;
· The brand new Smart Bulk Terminal at the Ust-Luga port, which has
helped PhosAgro achieve sustainable cost savings on export sales compared to
Investments into efficiency and modernisation of production lines have enabled
the Company to increase fertilizer output by about 5-10% per year. The Company
expects fertilizer production to have increased by 40% by the end of 2017, from
5.9 million tonnes in 2013 to 8.3 mln tonnes this year. Phosphate rock
production is expected to have increased by 22%, from 7.7 mln tonnes in 2014 to
9.4 mln tonnes for 2017.
The number of fertilizer grades that PhosAgro produces has increased from 19 to
35 and, and by 2020, this number is expected to grow to 40-50. The greatest
demand is expected to be for NPK / NPS fertilizers, which will account for up
to 37% of total consumption, while demand for DAP and MAP will account for
The company remains the leading fertilizer supplier for its priority domestic
market. In the past four years, PhosAgro has nearly doubled domestic fertilizer
and feed phosphates sales, reaching 2.1 million tonnes in 2016. The Company's
sales network is active in 60 regions of Russia.
Supported in a large part by state policy and support of Russian farmers by the
Russian Fertilizer Producers Association, which Andrey Guryev has headed since
2016, domestic agricultural producers were able to significantly increase
fertilizer purchases and make Russia the world's top wheat exporter last year.
Trading companies established by PhosAgro in Brazil, Switzerland, Germany,
Poland, France and Singapore have given the Company a presence in all of its
priority export markets, enabling it to respond quickly to changes in demand
and customer needs. PhosAgro now sells 80% of its fertilizers directly to
customers, without intermediaries.
PhosAgro has kept the promises it made to investors during the IPO and SPO, and
has paid dividends representing from 39% to 50% of net income. Thanks to the
company's robust cash flows and ability to maintain a solid balance sheet
throughout a major investment cycle, the Company has provided investors with
dividend income of USD 3.1 per share since 2013. Total dividends paid out
during the period amounted to around USD 1.2 billion, and the average daily
trading volume of PhosAgro GDRs on the London Stock Exchange has increased from
USD 2 million in 2013 to USD 7 million in 2017.
Despite the fact that the average price for DAP (FOB Tampa) has decreased since
2013 from USD 446 per tonne to USD 346 per tonne in 2016, the Company has
successfully overcome these difficulties, and its EBITDA margin for the same
period has grown from 23% in 2013 to 39% for 2016. The Company's EBITDA has
increased from RUB 23.9 billion in 2013 to RUB 72.4 billion last year.
Moreover, the production capacity increases achieved to date bring an
additional USD 180 million in EBITDA every year.
The Company's energy efficiency programme deserves special attention. PhosAgro
has reduced its per-unit energy costs by 40% over the last four years. After
commissioning its own generating capacities, combined with newly-built mineral
fertilizer production units, a number of PhosAgro's enterprises can almost
fully meet their own electricity needs.
Along with effective economic activity in regions where it is present, PhosAgro
has a corporate housing programme, and participates in a number of major social
programmes in the fields of education, health, youth policy and support of
sports. Annual outgoings on charitable and social projects total more than RUB
2.5 billion. PhosAgro is one of the biggest taxpayers in the regions where it
is active, with consolidated tax payments increasing by 1.5 times in the last
year alone to RUB 18 billion. The company is the leading taxpayer in the
Murmansk and Vologda regions.
In all cities where the company is active, it supports educational programmes
as part of Educated and Healthy Children of Russia programme ("DROZD"). DROZD
aims to address issues identified by the presidential programme for the
development of physical education and sports to raise a healthy younger
generation, developing children's sports, and healthy lifestyles for a
The company is engaged in the training of highly-qualified engineering
personnel, with an educational process that follows the 'school-technical
college-university' progression. Practically all graduates from PhosAgro
classes continue their education in the country's best technological
universities and colleges, and then go on to work at PhosAgro or at other
high-tech enterprises in Russia.
With the aim of developing tourism and creating a basis for forming new areas
of economic growth, PhosAgro has partnered with the government of the Murmansk
region and the mayor's office in Kirovsk to build the Bolshoi Vudyavr ski
resort, which has become the flagship project of the region's tourism cluster.
Between 2013 and 2016, investment in major projects in the tourism, skiing and
recreation spheres amounted to RUB 3.2 billion. As a result, aggregate tourism
traffic has increased by more than 300% over a five-year period.
With the direct involvement of Andrey Guryev, the PhosAgro has been in
partnership with UNESCO since 2013, supporting talented young scientists who
are engaged in research in the field of green chemistry, protecting the
environment and human health. This programme is unique because it is the first
time in the long history of UNESCO and the entire UN that such an initiative is
being implemented on an extra-budgetary basis with financing from a Russian
For many years, the company has acted as a strategic sponsor for chess and, in
particular, the Russian Chess Federation, at which Andrey Guryev is a member of
the Board of Trustees. PhosAgro was the official sponsor of the World Chess
Championship held in Sochi in 2014 and in New York in 2016, where Sergey
Karyakin from Russia faced the reigning champion, Magnus Carlsen from Norway.
Over the last four years, PhosAgro's GDRs have been included in MSCI Russia and
other indexes, and the Company became the only Russian winner of grand prix at
the Russian Business Leaders: Dynamics and Responsibility competition.
The members of the PhosAgro Board of Directors gave positive marks to Andrey
Guryev's performance as the CEO of PhosAgro during the past four years noting
that his appointment opened a new chapter in the Company's history, and that
implementation of the strategy to 2020 under his management has enabled
PhosAgro to significantly increase its competitive advantages and strengthen
its position on the global fertilizer market. The Directors expressed their
confidence that the legacy of the strategy to 2020 will be continued in the
strategy to 2025, which will bring about further development PhosAgro's
production assets and even greater efficiency improvements.
For further information please contact:
Alexander Seleznev, Head of Investor Relations
+7 495 232 96 89 ex 21 87
Timur Belov, Press Officer
Anastacia Basos, Deputy Press Secretary
+7 495 232 9689
+44 7554 993 032
+7 499 918 3134
Notes to Editors
PhosAgro is one of the leading global vertically integrated phosphate-based
fertilizer producers. The Company focuses on the production of phosphate-based
fertilizers, feed phosphate and high-grade phosphate rock (P2O5 content of not
less than 39%), as well as ammonia and nitrogen-based fertilizers.
The Company is the largest phosphate-based fertilizer producer in Europe, the
largest producer of high-grade phosphate rock worldwide and the third largest
MAP/DAP producer in the world (excluding China), according to Fertecon.
PhosAgro is also one of the leading producers of feed phosphates (MCP) in
Europe, and the only producer in Russia.
PhosAgro has 2.1 billion tonnes of resources (according to JORC) of high
quality apatite-nepheline ore. The Company's mines and phosphate rock
production facilities are located in the mountainous areas of the Kola
Peninsula in the Murmansk region of northwest Russia, whereas its fertilizer
and feed phosphate production assets are located near the city of Cherepovets
in the Vologda region and near the city of Balakovo in the Saratov region of
southwest part of European Russia.
PhosAgro's 2016 IFRS revenue was over USD 2.8 bln and EBITDA was USD 1.08 bln.
For further information on PhosAgro please visit: www.PhosAgro.com