● The company’s 2022 revenue increased by 52% year-on-year to $5.0 billion, while adjusted EBITDA increased by 59% to $2.5 billion, and adjusted net profit was $1.3 billion.
● Net cash amounted to $287 million as of December 31, 2022, supporting future growth opportunities and enabling attractive dividend payments.
● Fertiglobe announced a dividend for the second half of 2022 of $700 million in line with its previous guidance and will be paid in April 2023.
● Fertiglobe announced the commissioning of the first phase of the “Green Hydrogen Plant” project in Egypt. It also announced the signing of the comprehensive contracting contract for the design, supply and installation (EPC) of the low-carbon ammonia project with a production capacity of one million tons in the UAE with Tecnimont SpA on behalf of the project, after announcing the signing of the shareholders agreement in January 2023.
Abu Dhabi, United Arab Emirates: FertiGlobe announced the strategic partnership between ADNOC and OCI (ADX: FERTIGLB), the world’s largest marine exporter of urea and ammonia, the largest producer of nitrogen fertilizers in the Middle East and North Africa region, and a leader in the field of nitrogen fertilizers. Clean Ammonia Production, today announced that its 2022 revenue increased by 52% to $5.0 billion compared to 2021, while adjusted EBITDA increased by 59% to $2.5 billion, and adjusted net profit increased by 75% to reach to $1.3 billion. The company also reported a decline in revenue for the fourth quarter of 2022 by 11% year-on-year to $1.1 billion, in addition to a decline in adjusted EBITDA of 27% to $472 million, driven by lower urea prices and business Maintenance in its factories in the UAE and Egypt.
The company’s competitive position on the global cost curve supports the company’s ability to generate healthy profits for its shareholders and adhere to its dividend policy that includes free cash flow distribution while maintaining investment grade credit rating standards and growth opportunities. The company announces a dividend for the second half of 2022 in the amount of $700 million, which will be paid in April 2023. This brings the total dividend for the full year of 2022 to $1.45 billion.
On this occasion, Ahmed Al Hoshi, CEO of Fertiglobe, said: “We are pleased to achieve strong results in our first year as a listed company with revenue growth of 52% in 2022 and adjusted EBITDA of 59%. The company continues to achieve meaningful results thanks to its strategy Central Commercial and continuous focus on implementing the operational excellence program and projects and initiatives that focus on achieving sustainability.We have successfully and safely implemented several periodic maintenance operations in the company’s factories during the year 2022, including the maintenance work that we carried out in our factories in the UAE and Egypt in the fourth quarter of 2022 There are currently no operations planned for maintenance at these plants in 2023. In addition, the company has a good order history during the first quarter of 2023, as the company’s disciplined trading strategy and own distribution capabilities allow inventory to be managed close to major demand centers and on Effectively serving the main import markets.
He added: “We expect the strong market fundamentals to continue in the medium term despite the decline in nitrogen prices globally over the past few months, driven by lower product supply volumes, strong farm economies and lower global grain stocks than previous levels, in addition to lower nitrogen fertilizer prices, which is considered a catalyst.” In addition, we do not expect the entry of new global production capacities for urea in 2023, and very few new production capacities are expected to start between now and 2026. We expect high demand for our industrial products, which mainly supports ammonia, driven by With a recovery in China and lower energy prices that are boosting global industrial demand while improving global growth prospects.
“As part of the company’s efforts in the field of sustainability, it started exporting trial shipments of diesel exhaust fluid (DEF / AdBlue®) from Egypt to Europe in the fourth quarter of 2022 and early 2023, which testifies to the multiplicity of its business sectors and its ability to diversify its industrial products. Other shipments are expected to be exported throughout 2023. Over the course of 2022, we continued to implement our hydrogen strategy with investments targeting expansion at costs that are much lower than its investment costs globally, and we have started operating the first phase of the green hydrogen plant in Ain Sokhna in Egypt on the sidelines Climate Conference “COP27” in November 2022, which, upon completion of all its stages, will produce up to about 15,000 tons of green hydrogen as feedstock used to produce up to 90,000 tons of green ammonia annually in the ammonia plants of Fertiglobe. We are currently evaluating engineering options and technology for the 100 MW electrolysis plant and we are seeking financing and financial support with the aim of reaching the final investment decision for the project in 2023. This project benefits from our infrastructure current global ammonia production and distribution network.
Fertiglobe has also made progress on a low-carbon ammonia project with a production capacity of one million tons in the UAE in partnership with Abu Dhabi Chemical Derivatives Company Limited (Tazez), GS Energy Corporation (GS Energy) and Mitsui & Co. Ltd. (Mitsui), After the signing of the shareholder agreement in January 2023, the company on behalf of the project signed the comprehensive design, supply and installation contract (EPC) with Tecnimont SpA. The project will be financed through a mixture of equity and debt instruments. The increasing demand for low-carbon hydrogen and ammonia and reducing the environmental impact of our operations and sectors whose emissions are difficult to limit are part of our efforts to present actual initiatives before the COP28 climate conference in the UAE.
“I would like to express my gratitude to the Fertiglobe team for their continuous efforts and strong results in 2022 and for their continued focus on ensuring safety, improving performance and achieving excellence,” he concluded.
Strong market fundamentals in the medium term despite temporary volatility in market conditions
Despite the decrease in nitrogen fertilizer prices in the past months, medium term fundamentals still support the prices of our products. Nitrogen demand is expected to recover to support the rebuilding of global grain stocks as the proportion of global grain stocks remains at its lowest level in 20 years. Rising grain futures ensure increased farm income and stimulate increased acreage and higher demand for nitrogen to help offset grain stocks. This is expected to lead to higher global demand than its previous levels at least until 2025.
Limited supplies of nitrogen support the outlook for final market fundamentals for Fertiglobe’s nitrogen production, as markets are expected to experience a structural shortfall in production capacity through 2027. Feedstock pricing is expected to remain volatile in the short-term due to climate volatility and regulatory interventions, but from It is expected to remain higher than its historical levels.
Dividends and capital structure
According to the company’s dividend policy, the bulk of the distributable free cash flow will be distributed after allocating enough for growth opportunities, while maintaining the standards of investment grade credit ratings (Standard & Poor’s: BBB-, Moody’s: Baa3, Fitch: BBB-). all with stable future expectations). The company’s management announced a dividend for the second half of 2022 in the amount of $700 million or the equivalent of AED 0.31 per share, in line with the company’s previous directives, to be paid in April 2023. Dividends amounting to $1.1 billion were distributed from FertiGlobe throughout 2022.
The Company achieved a net cash position of $287 million as at December 31, 2022 (net cash to adjusted EBITDA ratio of 0.1x), compared to a net debt of $487 million as at December 31, 2021 (net debt to earnings ratio adjusted before interest, taxes, depreciation and amortization (0.3 times), which supports future growth opportunities and profitable dividend payments.
On December 22, 2022, the company succeeded in refinancing the remaining amount of the bridging loan through new facilities for 3 years of USD 300 million and a margin of 1.5% and 5 years of USD 600 million and a margin of 1.75%. With the US$300 million revolving credit facility increased to US$600 million, and the maturity extended to December 2027 (from August 2026), this provides significant cash flow for the company.
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About Fertiglobe:
Fertiglobe is the world’s largest marine exporter of combined urea and ammonia, and one of the leaders in clean ammonia. Fertiglobe’s production capacity consists of 6.7 million tonnes of commercial urea and ammonia, which is produced in four subsidiaries in the UAE, Egypt and Algeria, making it the largest producer of nitrogen fertilizers in the MENA region, and benefiting from direct access to six major ports and distribution centers. On the Mediterranean Sea, the Red Sea and the Arabian Gulf. The company is headquartered in Abu Dhabi and incorporated in the Abu Dhabi Global Market, employs more than 2,600 employees and was established as a strategic partnership between OCI NV Corporation (“OCI”) and the Abu Dhabi National Oil Company (“ADNOC”). FertiGlobe is listed on the Abu Dhabi Stock Exchange under the symbol “FERTIGLB” and ISIN number “AEF000901015”. For more information, please visit: www.fertiglobe.com
