Financial performance

Alexander Sharabaiko

2020 was a record year for the Company. The long-term development programme allowed us to produce more than ten million tonnes of commercial products a year for the first time ever, while total fertilizer sales grew by more than 5%. Growth in fertilizer sales against a backdrop of favourable pricing environment on the global markets ensured an 11.5% increase in the Company’s EBITDA to RUB 84.3 bln. At the same time, our EBITDA margin of more than 33% remains one of the highest in the industry.

I would also like to highlight our business’s ability to generate significant cash flows despite the challenging conditions – by the end of the year our cash flow reached RUB 42.5 bln, an all-time record for the Company.

PhosAgro’s leverage is stable at 1.86x net debt / EBITDA, while CAPEX for the reporting period amounted to less than 50% of EBITDA.

We currently see a surge in demand and prices for all major types of mineral fertilizers as a result of high prices for major crops and seasonal demand in key sales markets – Europe, the domestic market of the US, and China.

On top of that, India is likely to contribute to fertilizer demand in the near term due to low carry-over stocks and, consequently, a potential early start of seasonal procurement.

Alexander Sharabaiko, Deputy CEO for Finance and International Projects

Key drivers of financial results

PhosAgro’s financial performance in 2020 was materially impacted by the following key factors and events:

  • surge in prices for all major types of mineral fertilizers during the year as a result of high prices for major crops and seasonal demand in key sales markets – Europe, the domestic market of the US, and China;
  • limited supply of phosphate-based fertilizers due to lack of new production capacities and lower output at the beginning of the year amid the spread of COVID-19;
  • shrinking phosphate-based fertilizer exports from China and other countries.

Revenue analysis

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.

FY 2020 financial and operational highlights, RUB mln
Item 12M 2019 12M 2020 Change y-o-y, %
Revenue 248,125 253,879 2.3
EBITDAEBITDA is calculated as operating profit adjusted for depreciation and amortisation. 75,582 84,280 11.5
EBITDA margin 30.5% 33.2% 2.7 p.p.
Net profit 49,408 16,921 (65.8)
Adjusted net profitAdjusted net profit means net profit less foreign exchange gain or loss and other non-cash items. 37,062 46,791 26.3
Free cash flow 28,272 42,517 50.4
31 December 2019 31 December 2020
Net debt 131,583 156,875
12M net debt / EBITDA 1.74 1.86
Sales volume, kt 12M 2019 12M 2020 Change y-o-y, %
Phosphate-based fertilizers 7,255 7,669 5.7
Nitrogen-based fertilizers 2,197 2,286 4.0
Total sales 9,452 9,955 5.3
Revenue breakdown by key products, RUB bln
Item 2019 2020 Change y-o-y, %
Phosphate-based products 201.3 203.6 1.1
Nitrogen-based products 37.9 38.7 2.1
Other 9.0 11.6 28.9
Total 248.1 253.9 2.3
Revenue breakdown by region, RUB bln
Item 2019 2020
Russia 80.7 85.1
CIS 13.6 10.5
Europe 72.4 66.5
South America 34.8 41.9
Africa 9.5 12.3
India 14.2 21.6
North America 19.4 12.3
Others 3.9 3.6
Operating costs analysis
Cost of sales, RUB mln, %
Item 12M 2019 12M 2020 Change y-o-y, %
Depreciation and amortisation 21,368 23,743 11.1
Materials and services 41,221 40,973 (0.6)
Phosphate rock transportation 8,641 8,134 (5.9)
Repair 10,119 10,134 0.2
Drilling and blasting 2,323 3,168 36.4
Other materials and services 20,138 19,537 (3.0)
Raw materials 43,155 35,514 (17.7)
Ammonia 4,095 4,802 17.3
Sulphur and sulphuric acid 9,165 4,360 (52.4)
Potassium 13,691 12,253 (10.5)
Natural gas 12,627 12,342 (2.3)
Ammonium sulphate 3,577 1,757 (50.9)
Salaries and social contributions 12,744 13,807 8.3
Electricity 6,204 6,311 1.7
Fuel 4,849 3,885 (19.9)
Products for resale 6,683 9,102 36.2
Total 136,224 133,335 (2.1)

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

Change in EBITDA components in 2020, RUB bln
Free cash flow

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.

2020 EBITDA (plan/actual), RUB mln
EBITDA to FCF conversion in 2020, RUB bln

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).

Loans and borrowings breakdown as rate type at 31 December 2020, %
Loans and borrowings breakdown as currency at 31 December 2020, %
Loans and borrowings breakdown as maturity, RUB mln
Repayment schedule, RUB bln
Direct economic value generated and distributed
Item Stakeholder 2019 2020
Direct economic value generated 249,583 254,854
Revenue from sales Wide range of stakeholders 239,130 242,262
Revenue from other sales 8,995 11,617
Revenue from financial investments 1,458 975
Revenue from sale of assets 0
Economic value distributed (243,077) (247,254)
Operating expenses, including: Suppliers and contractors

(194,090) (193,263)
wages and other payments to employees (24,706) (28,540)
social expenses (2,661) (2,570)
Payments to providers of capital: Shareholders and creditors
payments to shareholders (32,244) (38,852)
payments to creditors (4,635) (4,132)
Tax expenses and other payments to government: Government (12,108) (11,007)
including income tax expense (9,724) (8,045)
Economic value retained 6,506 7,600