Fertiglobe approves $200 million dividend in one of the sector’s highest payouts

Fertiglobe shareholders have approved a $200 million cash dividend for H2 2023 that brings the amount returned to them to $2,265 million since IPO. Fertiglobe, the world’s largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertiliser producer in the Middle East and North Africa region, and an early mover in sustainable ammonia, held its AGM on Tuesday.

The latest dividend brings the total 2023 dividend payout to $475 million, which represents one of the industry’s highest dividend yields.

Strong direction

H.E. Dr. Sultan Ahmed Al Jaber, Chairman of Fertiglobe, said the robust financial performance in 2023 “underscores the company’s resilience”, even as urea and ammonia prices returned to normal levels after peaking in 2022. “Fertiglobe continues to advance its low-carbon ammonia growth strategy, as demonstrated by milestones such as its inaugural shipment of internationally recognised renewable ammonia and the deployment of the world’s first cost-effective CycloneCC carbon capture unit in its UAE facilities,” he explained.

ADNOC investment

Last December, ADNOC announced its intention to acquire OCI Global’s 50% stake in Fertiglobe for $3.62 billion, increasing ADNOC’s total ownership to 86.2%. HE Al Jaber confirmed the “fruitful partnership” had made Fertiglobe the world’s largest seaborne exporter of ammonia and urea fertiliser.

“ADNOC’s intention to increase its shareholding in Fertiglobe is a testament to the underlying quality of the business, its future growth strategy and ability to play a crucial role as a global growth platform for low-carbon and renewable ammonia,” he continued.

“With ADNOC’s support, I am confident that Fertiglobe is poised to pursue a range of transformational opportunities that will cement its global market leadership.”

Route to new markets

The firm’s robust financial performance in 2023 was underpinned by a 5% year-on-year increase in own-produced sales volumes, despite that lower price environment compared to 2022.

Overall, Fertiglobe reported full-year revenue of $2,416 million and adjusted EBITDA of $1,004 million, with adjusted net profit at $363 million and an adjusted EBITDA margin of 42%.

The ADNOC-OCI transaction supports growth plans by enabling it to unlock further potential in its core products of urea and ammonia, accelerate the pursuit of new market and product opportunities, while expanding its focus on clean ammonia as an emerging fuel and hydrogen carrier.

For ADNOC, the transaction supports its chemicals growth strategy and plans to establish a global growth platform for ammonia.

Positioned for growth

Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe, highlighted several significant operational, commercial and sustainability milestones in 2023, “positioning the company for substantial growth in the years ahead”.

He said: “I am particularly pleased with our agility in responding to market dynamics and challenges, which enables us to maximise shareholder value while prioritising sustainable growth and our ambitious decarbonisation agenda.”

Fertiglobe’s Manufacturing Improvement Plan (MIP) is expected to generate at least $100 million in incremental annual EBITDA by the end of 2025, compared to 2023.

“Additionally, our proactive cost optimisation programme has already achieved 51% of its $50 million run rate target within six months of its launch,” added the CEO.