MOSCOW (MRC) -- Grupa Azoty suffered a fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) loss of zloty (Zl) 296m (USD67.4m) as Ukraine war market impacts caused “record-breaking and highly volatile” energy and raw material costs, said the company.
Estimated Q4 consolidated sales revenue was Zl 5.1bn while the estimated EBITDA margin in the quarter was minus 5.8%, it added. Estimates for the full-year 2022 results showed EBITDA of Zl 2.5bn, consolidated sales revenue of Zl 24.7bn and an EBITDA margin of 10.3%.
Grupa Azoty Group - which said it would release its consolidated Q4 and full-year results on March 30 - said its fourth-quarter consolidated EBIT and EBITDA were hit by significant impairment losses of around Zl 404m on non-financial non-current assets and inventories of finished products, semi-finished products and raw materials.
The impact of impairment losses on non-financial non-current assets also resulted in a decrease in the group's full-year consolidated EBIT by Zl 963m.
In remarks on the estimated results, state-controlled Azoty, Europe’s second largest fertiliser producer, said: “Record-breaking and highly volatile prices of raw materials, mainly natural gas, throughout 2022, as a result of Russia's aggression against Ukraine and unprecedented cost pressure, forced production cuts in three key Grupa Azoty companies, mainly in the Agro and Plastics segments. “The subsequent fall in gas prices allowed production to be restored in October."
The company added that “it should be emphasised that since the fourth quarter of 2022 in Europe we have been observing an imbalance in demand and supply in all segments, which is reflected in adapting the production volume of the Capital Group companies to the current market situation”.
“The overriding goal of Grupa Azoty remains to ensure access to fertilisers on our most important market in Poland,” it said. Azoty also observed that “analyses show that a large part of farmers have not yet decided to purchase specific fertilisers before the approaching application season.
We remind, Grupa Azoty launched a 40,000 tonne/year concentrated nitric acid unit, doubling its production capacity for the product. Azoty, the sole manufacturer of concentrated nitric acid in Poland, said the zloty (Zl) 57.1m (USD13.1m) plant, built over the course of two years, would be of great importance in securing the production of more high-value chemicals.