Abu Dhabi-based Fertiglobe, a strategic partnership between ADNOC and Netherlands’ OCI, has delivered strong earnings and cash generation during the third quarter, which has resulted in a net cash position of $644 million as of 30 September 2022, compared to net debt of $487 million on 31 December 2021.
The world’s largest seaborne exporter of ammonia and urea reported that its Q3 2022 revenues increased 52 percent year-on-year to $1.32 billion, while adjusted EBITDA grew 64 percent to $606 million. Adjusted net profit in Q3 2022 was $292 million, increasing by 84 percent year-on-year.
For the nine months, revenue increased by 87 percent in 2022 to reach $3.97 billion, with adjusted EBITDA of $2.0 billion, up 122 percent, and adjusted net profit of $1.10 billion, increasing by 203 percent.
Free cash flow increased to $189 million in Q3 2022 from $56 million in Q3 2021, a 237 percent increase versus the same period last year. The strong cash position supports its goals of pursuing growth opportunities and enabling a highly attractive dividend payout.
Boosted by its competitive position on the global cost curve and free cash flow conversion capacity, Fertiglobe has decided it will pay a minimum of $700 million, equivalent to AED0.31 per share, in April 2023.
Ahmed El Hoshy, CEO of Fertiglobe, expects the company to continue with its performance and commented: “We are pleased to report another very solid set of results, driven by a step-up in urea and ammonia prices, supported by tight market balances outweighing the usual seasonal slowdown.
“Looking ahead, our international order book is robust, as demand picks up in key import markets, giving us good visibility for Q4 and H1 2023.
“Our competitive position on the global cost curve and free cash flow conversion capacity means that we are well-placed to continue to return capital to shareholders. We expect H2 2022 dividends to be a minimum of $700 million, bringing the total for 2022 to at least $1.45 billion, including the $750 million H1 2022 dividend paid to shareholders in October.”
The outlook of Fertiglobe’s nitrogen end-markets continues to be underpinned by tight supply, healthy farm economics and decades-low grain stocks globally, which incentivise the use of nitrogen fertilisers.
“Building on our position as a leading producer and the largest seaborne exporter globally of essential nitrogen fertilizer products, we aim to fill supply gaps where possible and help in addressing global food security concerns,” El Hoshy added.
Fertiglobe is making progress with its low-/no-carbon ammonia project pipeline, including a demonstration plant in Egypt as a proof of concept for green hydrogen to green ammonia. It is looking to deliver on its hydrogen strategy, while targeting investments significantly below replacement costs and setting the stage for the leading role it aspires to play in decarbonising industries that make up more than 90 percent of current global greenhouse gas emissions.
Fertiglobe is a leading nitrogen fertiliser and ammonia producer and distributer, and the largest producer in the MENA region. With plants located in the UAE, Egypt and Algeria, Fertiglobe’s production capacity comprises of 5.1 million metric tons of urea and 1.5 million metric tons of merchant ammonia annually.
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