Acron Group’s Output Up 7% in 2020
*25 January 2021*
*Acron Group’s Output Up 7% in 2020*
The Group’s Consolidated Output
(including operating results for Acron, Dorogobuzh,
and North-Western Phosphorous Company)
*Product, ‘000 t* *2020* * 2019* *YOY, %*
*MINERAL FERTILISERS*
*Ammonia* *2,729* *2,583* *5.7%*
Incl. in-house consumption 2,617 2,291 * *
*Nitrogen fertilisers, *including *4,707* *4,933* *-4.6%*
Incl. in-house consumption 690 1,127 * *
AN 2,430 1,951 24.6%
Incl. in-house consumption 213 408
Urea 1,180 1,253 -5.8%
Incl. in-house consumption 477 719 Incl. prilled urea 485 549 -11.7% Incl. in-house consumption 16 15 Incl. granulated urea 261 Up Incl. in-house consumption 26
UAN 1,096 1,729 -36.6%
*Complex fertilisers, *including *2,372* *2,026* *17.1%*
Incl. in-house consumption 52 36 * *
NPK 2,236 1,892 18.2%
Incl. in-house consumption 52 36 * *
Bulk blends 136 133 1.8%
*Total commercial output for Mineral Fertilisers* *6,448* *6,087* *5.9%*
*INDUSTRIAL PRODUCTS*
*Organic compounds, *including *423* *485* *-12.9%*
Incl. in-house consumption 213 248 * *
Methanol 98 106 -7.8%
Incl. in-house consumption 78 91
Formalin 151 173 -12.8%
Incl. in-house consumption 131 155
Urea-formaldehyde resins 174 206 -15.4%
Incl. in-house consumption 4 2
*Non-organic compounds, *including: *1,035* *842* *23.0%*
Low-density and technical-grade AN 318 189 68.3%
Industrial urea 140 131 6.4%
Calcium carbonate 515 466 10.5%
Liquid carbon dioxide 55 48 16.3%
Argon 7 7 -5.1%
*Total commercial output for Industrial Products* *1,245* *1,079* *15.4%*
*PHOSPHATE INPUTS*
*Apatite concentrate* *1,182* *1,084* *9.0%*
Incl. in-house consumption 900 792
*Total commercial output for Apatite Concentrate* *283* *292* *-3.3%*
*TOTAL COMMERCIAL OUTPUT* *7,976* *7,458* *6.9%*
Note:
Commercial output is output less in-house consumption.
*Chairman of Acron’s Board of Directors Alexander Popov commented on the results:*‘Despite the pandemic, Acron Group set a new record in 2020, ramping up its commercial output 7% to almost 8 million tonnes, which is fully in line with the plan we presented a year ago. This was made possible by government action in the majority of countries to ensure uninterrupted supply of mineral fertilisers to farmers, as well as by the responsible and coordinated coronavirus response mounted by the Group’s employees.‘In 2020, Acron Group also successfully completed three investment projects: the construction of a new 135,000-tpa nitric acid unit, the construction of a 700,000-tpa urea granulation unit, and upgrades to the Ammonia-4 unit, bringing its capacity to 900,000 tpa. The Urea-6+ project, which is currently underway and scheduled for completion in Q2 2021, will increase the unit’s capacity by 520,000 tpa. We are confident that Acron Group’s output will continue to grow. Our plan is to produce 8.4 million tonnes of commercial products in 2021’.*
*
*Performance Analysis*In 2020, Acron Group’s total commercial output was up 7% to 7,976,000 tonnes. This increase was mainly due to upgrades to the ammonia unit at Dorogobuzh in late 2019, which expanded the unit’s capacity and contributed to the increased output of all ammonia-based products.The Group’s mineral fertiliser output was up 6% to 6,448,000 tonnes last year. Industrial product output increased 15% to 1,245,000 tonnes due to the Group’s success in promoting industrial-grade ammonium nitrate in international markets. Output of industrial-grade ammonium nitrate was up 68% to 318,000 tonnes.In 2020, the Group’s ammonia output was up 6% to 2,729,000 tonnes, and the volume of ammonia processed through to end products increased to 96% from 89%. Upgrades to the Ammonia-4 unit in Veliky Novgorod, successfully completed in Q4 2020, increased the unit’s capacity by 70,000 tpa and provided an opportunity to further expand output of ammonia-based products.Output of Acron Group’s agricultural-grade ammonium nitrate was up 25% in 2020 to 2,430,000 tonnes. Agricultural-grade urea output was 1,180,000 tonnes, including 261,000 tonnes of granulated urea, a new product that the Group started producing last year following the launch of the urea granulation unit. Because of the weak UAN price environment, we cut UAN output 37% to 1,096,000 tonnes.
The Group’s output of complex fertilisers was up 17% to 2,372,000 tonnes, backed by both strong demand and an increase in production of phosphate feedstock — apatite concentrate — at the Oleniy Ruchey mine. In the reporting period, apatite concentrate output was up 9% to 1,182,000 tonnes.
*Market Trends*
In Q4 2020, global urea prices remained as high as in late Q3 2020 due to strong demand from India, rising global gas prices, and recovered demand in the industrial segment. Early 2021 is seeing further growth in urea prices fuelled by strong seasonal demand in Europe and the United States and the limited amount of urea available for Chinese export. These factors are expected to support high urea prices throughout Q1.
Like urea, ammonium nitrate prices stayed high from late Q3 into Q4 2020, while UAN prices remained low due to weak seasonal demand in the United States, the key UAN market. Early 2021 is seeing rapid growth in ammonium nitrate and UAN prices, mainly because of increasing urea prices and stronger seasonal demand for these products in the Northern Hemisphere.
NPK prices were on the rise in Q4 2020, driven mainly by significantly higher DAP prices. The premium over the basic product basket was 15%-20%.
*Average Indicative Prices, USD/t, FOB Baltic/Black Sea*
*Q4** **2020 * *Q3** **2020 * *Q4** **2019 * *Q4** **2020 /
Q3** **2020*
*change* *Q4** **2020/
Q4** **2019*
*change*
NPK 16-16-16 262 253 270 3.7% -3.2%
AN 166 162 179 2.7% -7.0%
UAN 119 114 137 4.3% -13.3%
Urea 234 231 216 1.4% 8.4%
Ammonia 211 186 225 13.2% -6.2%
*2020 * *2019 * *2020/2019*
NPK 16-16-16 256 296 -13.5%
AN 167 189 -11.4%
UAN 125 149 -15.9%
Urea 222 240 -7.1%
Ammonia 204 235 -13.2%
*Media Contacts:*
Sergey Dorofeev
Anastasia Gromova
Tatiana Smirnova
Public Relations
Phone: +7 (495) 777 08 65 (ext. 5196)
*Investor Contacts:*
Ilya Popov
Investor Relations
Phone: +7 (495) 745 77 45 (ext. 5252)
*Background Information*
Acron Group is a leading vertically integrated mineral fertiliser producer in Russia and globally, with chemical production facilities in Veliky Novgorod (Acron) and the Smolensk region (Dorogobuzh). The Group owns and operates a phosphate mine in Murmansk region (North-Western Phosphorous Company, NWPC) and is implementing a potash development project in Perm Krai (Verkhnekamsk Potash Company, VPC). It has a wholly owned transportation and logistics infrastructure, including three Baltic seaport terminals and distribution networks in Russia and China. Acron’s subsidiary, North Atlantic Potash Inc. (NAP), holds mining leases and an exploration permit for ten parcels of the potassium salt deposit at Prairie Evaporite, Saskatchewan, Canada. Acron also holds a minority stake (19.8%) in Polish Grupa Azoty S.A., one of the largest chemical producers in Europe.
In 2019, the Group sold 7.6 million tonnes of main products to 78 countries, with Russia, Brazil, Europe and the United States as key markets.
In 2019, the Group posted consolidated IFRS revenue of RUB 114,835 million (USD 1,774 million) and net profit of RUB 24,786 million (USD 383 million). Acron’s shares are on the Level 1 quotation list of the Moscow Exchange and its global depositary receipts are traded at the London Stock Exchange (ticker AKRN). Acron employs over 11,000 people.
For more information about Acron Group, please visit www.acron.ru/en.