Today Acron (Moscow Exchange and LSE: AKRN) released its consolidated IFRS financial statements for the first quarter of 2017.
Key Financials
- Revenue was RUB 24,073 million, down 4% year-on-year (Q1 2016: RUB 25,015 million). In dollar equivalent, revenue was up 22% to USD 409 million from USD 335 million.
- EBITDA* was down 28% year-on-year to RUB 7,434 million (USD 126 million) (Q1 2016: RUB 10,286 million; USD 138 million)
- EBITDA margin was 31%, against 41% for Q1 2016
- Net profit was down 88% year-on-year to RUB 1,571 million (USD 27 million) (Q1 2016: RUB 12,657 million; USD 170 million)
- Net debt was down 1% to RUB 51,369 million (31 December 2016: RUB 51,949 million). In dollar equivalent, net debt was up 6% to USD 911 million from USD 856 million.
- Net debt / LTM EBITDA** was 1.9, against 1.7 as of 31 December 2016.
Operating Results
- Output of key products was 1.773 million tonnes, up 18% year-on-year.
- Sales of key products totalled 1.781 million tonnes, up 19% year-on-year.
Chairman of Acron’s Board of Directors Alexander Popov comments on the results:
“First of all, I would like to emphasise the excellent operating results. Sales showed double-digit growth, which gives us an advantage against ever increasing competition on the global mineral fertiliser market. As a result, revenue in the reporting period was up 22% year-on-year in dollar equivalent.
At the same time, a stronger rouble and higher costs contributed to a decrease in EBITDA. EBITDA margin was 31%, which is close to the average over the past five years.
With the investment cycle over, we are reducing capital expenditures, which helps maintain the debt burden at a comfortable level.In the reporting period, net profit was affected by a loss due to changes in the value of derivative financial instruments, specifically by the expiration of a call option for VPC shares. However, since this loss is non-monetary, it will not affect dividend amount”.
Appendix
Notes on Key Items in the Financial Statements
Financial Highlights
The Group’s revenue in the first quarter of 2017 was RUB 24,073 million, down 4% year-on-year. In the reporting period, the global fertiliser market saw different trends for dollar prices: nitrogen fertiliser prices were up, and complex fertiliser prices were down year-on-year. Sales of key products increased 19% year-on-year. At the same time, in the first quarter of 2017, the average RUB to US dollar exchange rate was 21% lower year-on-year.
On the back of a 19% increase in sales, the cost of goods sold in the reporting period was up 21% to RUB 12,807 million. Cost growth was limited due to lower potassium chloride prices.
Selling, general and administrative expenses were down 2% to RUB 1,922 million due to lower foreign currency-denominated staff costs, including at the Group’s foreign facilities. Transportation expenses were up 8% to RUB 3,510 million due to increased sales and indexation of Russia’s railway tariff.
In the first quarter of 2017, EBITDA was RUB 7,434 million, down 28% year-on-year. EBITDA margin was 31%, down from 41% for the first quarter of 2016. The Group’s Veliky Novgorod-based Acron and Dorogobuzh facilities operated at 28% and 26% margin, respectively. NWPC’s EBITDA margin was down to 33% due to lower apatite concentrate prices.
Based on the results of the first quarter of 2017, the Group posted a net exchange gain of RUB 1,901 million from revaluation of assets, loans and liabilities, against a gain of RUB 1,876 million for the first quarter of 2016.
