Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, reported H1 2024 revenues of $1.05 billion, with adjusted EBITDA of $378 million, adjusted net profit of $134 million, and free cash flows of $225 million. 

 

The company reported Q2 2024 revenues of $496 million, adjusted EBITDA of $156 million, and adjusted net profit attributable to shareholders of $15 million.

 

Despite the increase in natural gas costs and the steady level of grain prices in Q2 2024 compared to Q1 2024, nitrogen prices have been impacted by delayed demand, cautious buying behaviour and reduced urea imports from India, partially offset by some supply disruptions towards the end of the quarter.

 

Strong balance sheet

Fertiglobe’s strong balance sheet position and effective cash flow management continue to enable the Company to pursue growth initiatives, whilst balancing shareholder returns. In light of this, a proposal for H1 2024 dividends will be presented to the Board for approval in September 2024, with payment in October 2024.

 

Ahmed El-Hoshy, CEO of Fertiglobe, commented: “Over the past quarter, Fertiglobe has taken important steps towards achieving its strategic business objectives by maintaining the positive momentum surrounding some of its most significant operational projects and decarbonisation initiatives. 

 

“Firstly, Fertiglobe, in partnership with TA’ZIZ, GS Energy Corporation, and Mitsui & Co, Ltd, has taken the Final Investment Decision (FID) on the TA’ZIZ 1 mtpa low carbon ammonia project and has awarded the construction contract to Tecnimont, with production expected to start in 2027. I am also excited about our selection as the winning bidder in the first-of-its-kind H2Global auction. 

 

“As the winning bidder, Fertiglobe will supply renewable ammonia out of Egypt into Europe, under a contract worth up to €397 million ($430 million) and at a delivered price of €1,000 per tonne until 2033. The agreement provides a framework for demand and pricing support, helping Fertiglobe and the consortium behind Egypt Green Hydrogen reach Final Investment Decision (FID) on the first integrated green hydrogen plant in Africa, and the first outside of Europe, by H1 2025.

 

“Finally, supported by Adnoc, we played a key role in delivering the world’s first ever certified bulk commercial shipment of low-carbon ammonia enabled by carbon capture and storage to Mitsui & Co, Ltd for use in clean-power generation in Japan. The landmark low-carbon ammonia shipment was produced at Fertiglobe’s Abu Dhabi facilities and supported by Adnoc’s $23 billion allocation towards decarbonisation and low-carbon solutions, further demonstrating the unique value proposition behind our partnership with Adnoc.”

 

Cost optimisation

Fertiglobe has continued to successfully progress its cost optimisation programme with 84% of the $50 million run rate target already implemented as of June 2024, yielding $42 million in cost savings. 

 

In addition, the company continues to prioritise its Manufacturing Improvement Plan (MIP), which aims to generate at least $100 million in incremental annual EBITDA by the end of 2025 compared to 2023, driven by a focus on improving energy efficiency and production. Fertiglobe also remains committed to unlocking more value by investing in the integration of Artificial Intelligence (AI) across its production platforms, including in operations, maintenance and sustainability.

 

Fertiglobe’s own-produced sales volumes fell by 2% Y-o-Y in Q2 2024. Own-produced sales volumes were driven down by 5% lower own-produced urea volumes, which offset the impact of a 12% increase in ammonia sales volumes. When excluding the impact of the gas supply shortages in Egypt, Q2 2024 and H1 2024 own-produced sales volumes would have been up 8.1% and 6.6% Y-o-Y, respectively.

 

El-Hoshy concluded: “I would like to express my gratitude to the entire Fertiglobe team; their steadfast efforts in minimising the impact of the widespread gas supply shortages faced in Egypt have been critical in ensuring healthy operating rates across the rest of our platform.

 

“Adnoc’s pending acquisition of OCI Global’s 50% equity stake in Fertiglobe continues to progress. Once completed, the transaction is expected to support Adnoc’s ambitious chemicals and low-carbon ammonia roadmap, and we are confident in Fertiglobe's ability to continue developing global low-carbon hydrogen and ammonia value chains and capturing value-accretive opportunities in the burgeoning hydrogen economy within Adnoc’s supportive ecosystem.”

 

Dividends and capital structure

As of June 30, 2024, Fertiglobe reported a net debt position of $880.6 million, implying net debt / LTM adjusted EBITDA of 1.0x, which allows the company to balance future growth opportunities and dividend pay-out, supported by robust free cash generation and a healthy balance sheet.

 

A proposal for H1 2024 dividends will be presented to the Board for approval in September 2024, with payment in October 2024.--TradeArabia News Service