Page 96 - RusRPTJune18

9.2.13 Other sector corporate news
Russian phosphate fertiliser major Phosagro reported RUB54.6bn ($0.9bn) in the first quarter of 2018 , up by 19% quarter-on-quarter and backed by strong fertiliser prices and robust operating results. However, company's Ebitda of RUB14.3bn missed the consensus by 11%, partially explained by a stronger ruble and increased in costs. While net income of RUB6.9bn jumped 62% quarter-on-quarter on lower interest and income tax expenses, it still was 22% below the expectations. Phosagro number being "significantly lower than the street’s estimates" are seen by Aton Equity as mildly negative for the stock. Nevertheless, free cash flow (FCF) was positive at RUB1.5bn (up from minus RUB9.1bn in the fourth quarter) boosted by seasonally lower capex and no significant working capital build-up. Company's net leverage improved to 2.3x net debt to Ebitda. In the short term Aton expects that a "traditional weakening in [fertiliser] prices should move from 2Q18 to the high season in 3Q as it is expected that demand from Brazil will be deferred after weak 1Q18 imports."
96 RUSSIA Country Report June 2018 www.intellinews.com