With nitrogen prices continuing to maintain a positive momentum, Abu Dhabi-based Fertiglobe reported $525 million of revenue for the third quarter of 2023 and $1.8 billion for the first nine months of the year and has issued a positive outlook for the near future.
Fertiglobe is a strategic partnership between ADNOC and OCI Global, the world’s largest seaborne exporter of urea and ammonia combined and the largest nitrogen fertilizer producer in the Middle East and North Africa region.
With own-produced sales volumes rising by 8 percent for the third quarter compared to the same period last year, the company reported adjusted EBITDA of $199 million and an adjusted net profit of $41 million for the third quarter. It generated free cash flows of $126 million.
For the nine-month period ending 30 September 2023, Fertiglobe’s adjusted EBITDA was $715 million and an adjusted net profit was $261 million. Free cash flow was at $458 million.
The board approved dividends of $275 million for H1 2023, equivalent to 12 fils per share. The company’s healthy free cash flow conversion and strong balance sheet (net cash position of $28 million) enabled it to maintain dividend payments while investing in value-accretive growth projects.
Fertiglobe: Nitrogen prices maintain positive momentum
Ahmed El-Hoshy, CEO of Fertiglobe, commented: “Despite the traditional summer lull for fertilizer sales, we saw nitrogen prices maintain their positive momentum in Q3, driven by tightening markets on planned and unplanned supply disruptions, restocking demand, as well as expectations of reduced exports from China. Nitrogen prices have increased significantly from their troughs in the second and third quarters, and we expect the benefits from these increases to materialise in the fourth quarter.
“The short-term outlook is further underpinned by a strong order book for ammonia and urea sales in Q4 2023. In the medium- to long-term, the nitrogen outlook remains favourable, with limited incremental supply additions over the next several years, healthy farm economics, and elevated energy prices raising marginal cost floors, particularly going into the winter season.
“We are pleased to note that our own-produced Q3 2023 sales volumes were up 8 percent year-on-year, primarily due to 10 percent higher own-produced urea sales volumes. The expected recovery in demand ahead of the spring application season in the Northern Hemisphere should continue to support prices going in Q4 2023, and Fertiglobe remains ideally positioned to serve key import markets from our strategically located facilities.”
Alongside ADNOC, Fertiglobe recently announced the pilot deployment of the world’s first modular CycloneCC carbon capture unit at its Fertil plant, with the potential for broader deployment across its operations, if successful. The company said it was committed to leveraging its state-of-the-art ammonia facilities and global distribution infrastructure to expand its low-carbon ammonia capacity as part of its commitment to reducing the carbon footprint of its operations and meeting increasing demand for low-carbon hydrogen and ammonia.
Fertiglobe also revealed in the regulatory filing that it has reached commercial agreement with a group of its core relationship banks on the terms of a new $500 million term facility, expected to be executed shortly. Once the facility is executed, the proceeds will be used to refinance short-term borrowings, further improving the company’s maturity profile and liquidity.
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