Today Acron (RTS, MICEX and LSE: AKRN) released its unaudited IFRS consolidated results for 9M 2009.
IFRS Financial Highlights for 9M 2009
• Revenue totalled RUB 28.36 billion, down 22% year-on-year (9M 2008: RUB 36.30 billion)
• EBITDA* shrank 69% year-on-year to RUB 5.06 billion (9M 2008: RUB 16.33 billion)
• EBITDA margin was 18%, down from 45% in 9M 2008;
• Net profit totalled RUB 5.79, down 48% year-on-year (9M 2008: RUB 11.18 billion).
* EBITDA is calculated as operating profit plus depreciation and amortisation.
Acron Group’s Operating Results for 9M 2009
Total ammonia and mineral fertiliser output (less own consumption) totalled 3.2 million tonnes. Ammonia output in 9M 2009 was up 9%, nitrogen fertilisers were up 26 % and complex fertilisers were down 7% year-on-year.
Comments on IFRS Financial Highlights
The reporting period saw a significant decline in revenues caused by the slump in fertiliser prices. This drop was partially offset by increased output volume achieved through higher capacity utilisation and optimisation of the Group’s product portfolio. Cost of sales was up 10% due to current higher prices on mineral raw materials in Russia. Cost-cutting measures delivered a 6% decrease in selling, general and administrative expenses.
The volatile exchange rate significantly affected Acron’s financial performance this year. On the one hand, the strong growth of the rouble against the US dollar reduced exchange rate losses associated with revaluation of foreign currency debts, but it also provoked higher operating foreign exchange losses. In the context of the 3Q weaker global prices, this caused the EBITDA margin drop to 18%. Regardless, Acron’s higher sales volume ensured higher EBITDA quarter-on-quarter.
Profit on sale of Sibneftegaz stock also affected net profit in the reporting period. Accrued interest on the 2008 Talitsky subsoil license loan was capitalised and transferred to the company’s assets and so far has not diminished the reporting period’s profit.
Positive operating cash flow enables the Acron Group to continue implementing its investment projects. For instance, during the reporting period Acron invested more than RUB 800 million in mine construction at the Oleniy Ruchey apatite-nepheline deposit in Murmansk region.
Income generated from the sale of Sibneftegaz stock in 3Q 2009 and rouble stabilisation reduced the Group’s total debt. Net debt fell to RUB 22.95 billion against RUB 24.81 billion at the beginning of 2009. Over the reporting period the Group made concerted efforts to improve its debt structure. Specifically, most of its short-term debt was refinanced with new long-term loans and the issue of four-year RUB bonds. As a result, the Group’s short-term debt was reduced 36% to RUB 11.84 billion, against RUB 18.41 billion at the beginning of 2009.
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