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sulphur and gas costs, while net profit could have been higher if not for the RUB8.7bn foreign currency. Analysts of Aton sees the results as positive for the company, "especially on the adjusted bottom line" and reiterate Buy rating on Phosagro "highlighting the long-awaited strengthening in fertiliser prices, and prominent 2Q18 results that mark a turnaround in profitability." Phosagro announced it will continue to pay 50% of adjusted net income, with the dividend yield estimated at 7% by VTB Capital. At the same time the company reported Net debt to EBITDA at a comfortable 2.1x. "While Ebitda was 7% above consensus, the stock has not reacted much, being under pressure of geopolitical factors," VTB Capital commented. Still, VTB sees the stock as "fundamentally attractive, with a 38% ETR [estimated total return] to 12-month target price of $17 and trading at 6.1x 2018F Enterprise Value/Ebitda, a 27% discount to Mosaic [US potash and phosphate fertilizer major]" and reiterated a Buy recommendation. bne IntelliNews interviewed the head of Phosagro Andrei Guryev . The company has been on a tear, and is a favourite of both portfolio and bond investors. It is cash rich, has low debt and grows at a steady 10% a year irrespective of the shockwaves that have bombarded Russia in recent years.
124 RUSSIA Country Report September 2018 www.intellinews.com