Fertiglobe posts first-half revenue of $1.24 billion

Fertiglobe, the largest nitrogen fertiliser producer in the Middle East and North Africa (MENA), has reported first half (H1) 2023 revenue of $1.24 billion and a net profit of $215 million.

Fertiglobe, a joint venture between ADNOC and OCI Global, is the world’s largest seaborne exporter of urea and ammonia combined, and an early mover in sustainable ammonia.

The company’s second-quarter revenue stood at $552 million, adjusted EBITDA at $218 million, and adjusted net profit at $84 million, the company said. In a filing with the Abu Dhabi Securities Exchange (ADX), Fertiglobe said first-half revenue fell to $1.25 billion from $2.66 billion a year earlier. Attributable net profit for the six-month period fell to $214.9 million from $786 million in the corresponding period a year ago.

The company said that the Q2 2023 results were impacted by lower selling prices, as volatility in European gas prices continued while markets saw increased supply from capacities commissioned in 2022, coinciding with the end of the demand season in the northern hemisphere.

Ahmed El-Hoshy, CEO of Fertiglobe, said in a statement: “We are pleased to see that nitrogen markets bottomed during the second quarter and are tightening rapidly, with a strong price trajectory in recent weeks despite the traditional summer lull for fertilisers. Looking ahead, we believe that limited incremental supply additions over the next several years, coupled with healthy farm economics, which incentivise nitrogen fertiliser application, and elevated marginal production costs in Europe continue to support a favourable nitrogen outlook in the medium to longer term.

“We expect more permanent closures of European marginal production, if ammonia pricing continues to persist below marginal production costs. Our overall sales volumes were lower compared to Q2 2022, primarily due to a higher base effect given deferrals from Q1 to Q2 last year. However, going into H2 2023, we are well-positioned to service demand emerging from key regions, leveraging our centralised distribution capabilities and targeting demand centres that offer the highest netbacks, further supported by the reinstatement of urea and ammonia import duties into Europe.

The company has proposed an H1 2023 dividends of at least $250 million, which is subject to board approval.