Financial performance

Revenue for 2020 grew by 2.3% y-o-y and amounted to RUB 253.9 bln. Revenue growth was driven by higher sales.

In 2020, lower average sales prices for phosphate- and nitrogen-based fertilizers were fully offset by a 5.3% increase in sales volumes and an 11.4% depreciation of the rouble against the US dollar.

In 2020, cost of sales went down by 2.1% y-o-y, to RUB 133.3 bln. This decline amid increased output was achieved a result of a production upgrade, better self-sufficiency in raw materials, and lower feedstock prices.

Costs for raw materials decreased by 17.7% y-o-y to RUB 35.5 bln on the back of:

• a 52.4% cut in the spending on sulphur and sulphuric acid, to RUB 4.4 bln due to a decline in the sales of sulphur-rich fertilizer grades, pilot commissioning of a new sulphuric acid unit in Cherepovets at the beginning of 2020, as well as falling global prices for this feedstock;
• 10.5% lower spending on potassium chloride, to RUB 12.3 bln, amid falling global prices;
• a 50.9% decline in the spending on ammonium sulphate, to RUB 1.8 bln after our ammonium sulphate plant reached its design capacity.

Ammonia costs increased by 17.3% to RUB 4.8 bln due to higher consumption caused by the launch of the ammonium sulphate plant.

EBITDA for 2020 grew by 11.5% y-o-y and amounted to RUB 84.3 bln, with a 33.2% margin.

The growth was driven by recovering global prices for fertilizers and the completion of technological and operational upgrades. Among other contributing factors were rouble depreciation and low prices for key raw materials. EBITDA margin is one of the highest among direct competitors

In 2020, free cash flow increased 1.5x y-o-y and amounted to a record RUB 42.5 bln. The growth was driven by high EBITDA margin and efficient working capital management.

Capital investments for the year reached RUB 40.9 bln (USD 567 mln), which is equal to 49% of the 2020 EBITDA. The Company’s investments were focused around the development of the raw material base in Kirovsk, upgrade of fertilizer production and railway infrastructure in Cherepovets, launch of a new flexible line producing ammonium sulphate in Balakovo and construction of new facilities at the Volkhov site.

At the end of 2020, our net debt to EBITDA ratio stood at 1.86x. The growth compared to 31 December 2019 was a result of rouble depreciation, since most of the Company’s loan portfolio is denominated in US dollars. Net debt as at 31 December 2020 was RUB 156.9 bln (USD 2.1 bln).