Page 120 - RusRPTNov18

of the orders. Thus, the adjusted EBITDA came in 1.5% lower YoY, at RUB 99,832mn. At the same time, net income reached RUB 33,344mn, implying a 30.6% YoY improvement, driven by the positive revaluation of owned stakes, namely in InterRAO. Adjusted net income - reflecting cash-backed profit – was still up, by 4.7% YoY.
9.2.11 Metallurgy & mining corporate news
PhosAgro’s sales of fertilizers (by volume) increased 9% y/y in 3Q18 but were down 2% Q/q. The company reiterated its production guidance for 2018 at 9mn tonnes of fertilizers but also mentioned the possibility of a slight reduction in prices in 4Q18. Bankers expect PhosAgro’s 3Q18 results, due in late November, to be another strong set of numbers. Sales of key products rose 6-33% y/y, except for DAP/MAP (-5% y/y), with customers preferring NPK and NPS products (+6% y/y). Prices were strong as well: DAP rose 28% y/y and urea increased 29% y/y. Bankers agree that phosphates prices might weaken in 4Q18, assuming that demand from India and Brazil is saturated. However, there are several other factors, such as foreign exchange rates and raw materials costs, and their impact on the 4Q18 financials is as yet unknown.
The chemical holding Phosagro has agreed to supply India with $1bn worth of mineral fertilizers , company's general director Andrei Guriev said. The contract provides for the supply of 2mn tons of mineral fertilizers. The term is 2019-2021, the company's general director noted. RDIF is also participating in the transaction, Interfax reports. Issues will be actively discussed on Friday, including the reduction of duties on Russian products in India, said RDIF Director General Kirill Dmitriev. Currently, there is a duty of 5% on Russian fertilizers, the agency reminds.
Russian phosphate fertiliser major Phosagro and the Russian Fund for Direct Investment (RDIF) closed a $1bn deal with Indian Potash Limited for supplies of 2mn tonnes of fertilisers in 2019-2021 , Reuters reported on October 5 citing the head of the company Andrei Guryev. The deal would be a boost for Phosagro that sold 1.2mn tonnes of fertilisers to India in 2016-2018. Previously Phosagro was sanctioned by Ukraine along with other Russian chemical majors EuroChem and Uralkali , but said it will be able to reorient its supplies to other export market painlessly. Notably, the Phosagro could be rewarded with the state-curated deal for being one of the 14 metals, mining, and chemical companies that agreed to presidential aide's Andrei Belousov's proposal to participate in state investment projects over the next six years. Aton Equity estimated that Phosagro was among the companies with high capex/earnings ratios that are relatively immune to the new plan. bne IntelliNews i nterviewed 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. Phosagro reported 4% quarter-on-quarter revenues growth in the second quarter of 2018 to RUB56.6bn, with 7% q/q sales decline offset by ruble depreciation and higher fertiliser prices. In the first quarter of 2018 Phosagro missed expectations, but in the second quarter company's Ebitda jumped 31% q/q to RUB18.7bn beating consensus expectations by 7%, with the margin gaining 7pp q/q to 33%. Net profit of the company was 62% above consensus expectations at RUB3bn.
120 RUSSIA Country Report November 2018 www.intellinews.com