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Press Release

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Quarter of 2012

URALCHEM HOLDING P.L.C., a Cypriot holding company of the URALCHEM Group, one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first quarter of 2012 ending 31 March 2012.
MOSCOW, RUSSIA, June 01, 2012 /24-7PressRelease/ -- Revenue increased to US $673 million, compared to US $566 million in Q1 2011.
Operating profit increased to US $178 million, compared with US $160 million in Q1 2011.
Adjusted EBITDA grew to US $207 million, compared to US $186 million in Q1 2011.
Net profit amounted to US $354 million, compared with US $174 million in Q1 2011.
URALCHEM HOLDING P.L.C. (hereinafter URALCHEM Holding or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter the Group), one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first quarter of 2012 ending 31 March 2012.
Key Financial Figures for Q1 2012 and 2011 (US $ million)
Q1 2012 Q1 2011 Year-on-Year Change, %
Revenue 673 566 19%
Gross profit 375 317 18%
Gross profit margin 56% 56% -
Operating profit 178 160 11%
Operating profit margin 26% 28% -7%
Net profit 354 174 103%
Net profit margin 53% 31% 71%
Adjusted EBITDA 207 186 11%
Adjusted EBITDA margin 31% 33% -6%
Net cash generated from operating activities 174 167 4%
Dmitry Konyaev, CEO of URALCHEM, OJSC (part of the Group), commented on the first quarter of 2012 results, "I am pleased with the Company's results in the first quarter of this year. We are moving ahead as planned. Net profit in the first quarter of 2012 more than doubled compared to the same period last year. This happened due to the acquisition of Minudobrenia in Perm, as well as the reassessment of our share in the enterprise. Besides, the net profit figure was influenced by a considerable reduction in interest expenses on loans which became possible after we refinanced the loan portfolio last year."
Financial Results
Revenue for the first quarter of 2012 grew 19% to US $673 million, compared to US $566 million in the first quarter of 2011. Operating profit amounted to US $178 million, or 26% of the revenue, compared with the operating profit of US $160 million, or 28% of the revenue in the first quarter of 2011.
Net profit for the first quarter of 2012 more than doubled, amounting to US $354 million, compared to US $174 million in the first quarter of 2011. Without the reassessment of the Company's share in Minudobrenia, Perm the net profit growth comprised 15%.
During the first quarter of 2012, adjusted EBITDA reached US $207 million, compared to US $186 million the year before, a rise of 11%. Adjusted EBITDA margin for the first quarter of 2012 comprised 31% of revenue compared with 33% of revenue for the first quarter of 2011.
Markets
In the first quarter of 2012 the prices of fertilizers and intermediates showed significantly different dynamics. Prices for ammonia at the Yuzhny port fell to $70 / t due to low demand, both in agriculture and industry, which coincided with the launch of Qafco V. Market recovery began only in late March.
During January to early February the urea market repeated its dynamics in 2011. However, in mid-February a rapid increase in the price of urea started due to high demand in the U.S. The late Q1/early Q2 price level approached peak figures of 2011 even surpassing them at certain markets. Prospects for market development in the second quarter remain optimistic for market participants.
Prices for ammonium nitrate were stable during the first quarter due to high volumes of domestic market shipments.
The global market of phosphate fertilizers in the first quarter of 2012 was characterized by low activity, with prices going down slightly. European demand was limited due to severe weather conditions and financial instability. Moderate recovery in prices occurred in late Q1 due to higher demand in Latin America and the U.S. domestic market.
Sales
In the first quarter of 2012 the Group's product sales amounted to 1.7 million tons, up 20% compared to the first quarter of 2011. Through the acquisition of OJSC Minudobrenia, Perm in January 2012, sales of urea and of ammonia increased significantly.
Sales of Commercial Products of URALCHEM Group in Q1 2012-2011 (thousands of tons)
Name of Product Q1 2012 Q1 2011 Year-on-Year Change, %
Ammonium nitrate and its derivatives 651 640 2%
Urea 363 166 119%
Ammonia 204 115 78%
Phosphate based fertilizers 169 191 -12%
Complex fertilizers 143 175 -18%
Other chemicals, including ammonium nitrate for industrial use 191 153 25%
Total 1,721 1,440 20%
Financial Situation
Cash generated from operating activities grew by 4%, from US $167 million in the first quarter of 2011 to US $174 million in the first quarter of 2012.
On 31 March 2012, the Company's net debt amounted to US $1,076 million. The weighted average interest rate in the loan portfolio for the first quarter 2012 decreased to 5.85% compared to annual 8.0% for the same period last year.
URALCHEM HOLDING P.L.C. is a holding company of the URALCHEM Group, which includes four fertilizer manufacturing facilities in Russia. URALCHEM Group is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tons of ammonium nitrate, 2.8 million tons of ammonia, 0.8 million tons of MAP and DAP, 0.8 million tons of complex fertilizers and 1.2 million tons of urea per year. URALCHEM Group is the second largest ammonium nitrate producer in the world and number one in Russia, the second largest producer of nitrogen fertilizers in Russia. URALCHEM Group's key production assets include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilizers, OJSC in Voskresensk, Moscow region.
Website: http://www.uralchem.com
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