21 Nov 2018 13:58

PhosAgro boosts Q3 EBITDA 72% to 23.4 bln rubles, above forecast

MOSCOW. Nov 21 (Interfax) - PhosAgro boosted EBITDA 72% year-on-year in Q3 2018 to 23.4 billion rubles, the fertilizer producer said in a statement.

This was more than the 21.5 billion rubles that analysts predicted in a consensus forecast for Interfax.

PhosAgro's EBITDA margin increased to 37% in Q3 2018 from 29% in Q3 2017.

Sales revenue rose 35% year-on-year to 62.8 billion rubles.

Net income adjusted for non-cash FX items grew 2.2-fold to 12.9 billion rubles, above the 12.1 billion rubles forecast.

The PhosAgro board on November 20 recommended a Q3 dividend of 72 rubles per share be paid for Q3. The payout will be 9.3 billion rubles or more than 70% of adjusted net profit, the usual payment ratio being 50%.

"As part of our long-term strategy, PhosAgro has spent up to 50-60% of EBITDA on investments into its Russian assets over the past five years. Today we can see the significant positive impact on our earnings from these large-scale investments, and the company can take a slightly modified approach to its dividend policy by paying out up to 75% of free cash flow as dividends, which represents a double-digit annualized dividend yield," PhosAgro CEO Andrei Guryev was cited as saying in the statement.

Such a distribution of free cash flow leaves room for the comfortable repayment of ruble-denominated debt in December 2018, he said.

Net operating cash flow increased 125% year-on-year to 22.9 billion rubles in Q3, primarily driven by profitability growth coupled with working capital release. Free cash flow was 12.4 billion rubles, a quarterly record since the company conducted its IPO.

As of the end of September 2018, net debt totaled 120.8 billion rubles, bringing the net debt/EBITDA ratio to a two-year low of 1.7x from 2.07x at the end of Q2.

PhosAgro's capex totaled around 10 billion rubles. The majority of capex spending was on scheduled maintenance and development of the upstream business, as well as on construction of new sulfuric and nitric acid plants.