Warsaw, August 14th 2014
Press release
Strong financial performance in difficult market conditions
Grupa Azoty delivers strong performance in the first half of 2014. The Company
generated operating profit (EBIT) of PLN 285m (H1 2013: PLN 788m) and net profit of
nearly PLN 235m (H1 2013: PLN 771m), with revenue slightly above PLN 5bn (H1 2013:
PLN 5.2bn). The period's weaker year-on-year performance was attributable to the
accounting for the Puławy acquisition, recognised as a non-recurring event in 2013.
However, the Company's actual results are above the market expectations.
“Net of non-recurring events, the adjusted EBIT and EBITDA margins decreased slightly
from 7% and 12% to 6% and 11%, respectively, on the back of adverse pricing environment,
especially in the Fertilizers segment,” said Andrzej Skolmowski, Vice-President of the
Grupa Azoty Management Board, when asked to comment on the Company's
performance. “Declining prices forced us to increase sales volumes and move into new
markets. We successfully reduced costs thanks to lower prices of raw materials and
synergies generated across the Group,” Mr Skolmowski added.
“Despite the price pressures in the Fertilizers segment, we managed to deliver financial
results above the market expectations. Our strategy yields tangible positive results, as do
our consolidation efforts and the capital expenditure programme we are currently
implementing. Consequently, the Company outperformed its peers despite the challenging
market environment,” said Paweł Jarczewski, President of the Management Board of
Grupa Azoty S.A.
In H1 2014, Grupa Azoty took advantage of the opportunities offered by the deregulation
of the Polish natural gas market. Lower commodity prices on the global markets and the
large supply of gas on the domestic market drove down the prices of natural gas and hard
coal on the power exchange by 7%−9% and 12%−13%, respectively, allowing the Company to
deliver a solid EBITDA margin of 13% in the Fertilizers segment.
Consolidated results of Grupa Azoty S.A.
H1
2013
H1
2014
Change
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
5,247
5,073
↘
2,569
2,226
2,348
2,703
2,370
788
285
↘
369
-9
-77
182
103
EBITDA
1,085
564
↘
555
111
57
325
239
EBITDA*
639
564
↘
283
111
-13
325
239
Net profit
771
235
↘
360
0.2
-57
149
86
Revenue
EBIT
* Adjusted for gain on bargain purchase of Grupa Azoty PUŁAWY
Grupa Azoty's consolidated revenue by segment
In the Chemicals Segment (which includes the former OXO segment and concentrates on
the manufacture of melamine, technical-grade urea, sulfur and pigments), revenue
increased by over 3% year-on-year, while the EBITDA margin remained broadly flat at 7%,
chiefly on the back of the Siarkopol acquisition and lower prices of raw materials (natural
gas for urea and melamine manufacture, and ilmenite, used to manufacture titanium
white).
The Plastics Segment saw prices of highly-processed products (Tarnamid and Alphalon)
stabilise, which, accompanied by a slight year-on-year decline in prices of such raw
materials as benzene and phenol, translated into higher profitability (EBITDA margin up to
-1%, from -3%). This was primarily a result of the difficult situation on the caprolactam
market, with strong price competition seen in Europe and elevated supply in the Middle
East.
Grupa Azoty Puławy Group's consolidated results
In Q4 2014, Grupa Azoty Puławy earned net profit of PLN 74m (down from PLN 105m last
year), on revenue of nearly PLN 0.88bn (down from PLN 0.93bn last year).
Q1-4 12/13
12M
Q1-4 13/14
12M
Change
Q4 12/13
Q2 2013
Q1 13/14
Q3 2013
Q2 13/14
Q4 2013
Q3 13/14
Q1 2014
Q4 13/14
Q2 2014
3,886
3,626
↘
930
840
923
983
880
EBIT
429
230
↘
110
19
21
111
80
EBITDA
554
379
↘
142
55
57
149
118
Net profit
390
209
↘
105
18
19
98
74
Revenue
Grupa Azoty Police Group's consolidated results
In H1 2014, Grupa Azoty Police earned net profit of PLN 42m, on revenue of nearly PLN
1.25bn.
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q2/Q1
change
H1
2014
Revenue
728
510
500
632
617
↘
1,249
EBIT
32
5
-21
20
32
↗
52
EBITDA
53
24
4
51
52
↗
102
Net profit
23
7
-13
15
26
↗
42
Grupa Azoty Zakłady Azotowe Kędzierzyn's consolidated results
In H1 2014, Grupa Azoty ZAK earned net profit of PLN 69m (down from PLN 84m last year),
on revenue of PLN 1.04bn (down from PLN 1.07bn last year).
2012
2013
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
1,043
y/y
change
↘
1,074
530
474
528
572
471
EBIT
96
79
↘
44
2
0
47
33
EBITDA
133
124
↘
63
21
20
69
54
Net profit
84
69
↘
39
5
-4
39
31
Revenue
***
The Grupa Azoty Group, whose parent is Grupa Azoty S.A. of Tarnów, is one of the leading players
on the European fertilizer and chemical markets, formed through successive acquisitions of Polish
chemical companies. The Group now comprises a number of entities, including: Grupa Azoty S.A. (the
Parent), Grupa Azoty Zakłady Azotowe Puławy S.A, Grupa Azoty Zakłady Chemiczne Police S.A., and
Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. Grupa Azoty S.A. is currently the second largest EUbased manufacturer of nitrogen and compound fertilizers, and its other products, including
melamine, caprolactam, polyamide, oxo alcohols and titanium white, enjoy a strong standing in the
chemical sector, with a wide range of applications in various industries. For 2013, the Grupa Azoty
Group reported revenue of PLN 9.8bn (2012: PLN 7.1bn), net profit of PLN 714m (2012: PLN 315m)
and operating profit (EBIT) of PLN 703m (2012: PLN 372m). Grupa Azoty S.A. has been listed on the
Warsaw Stock Exchange since 2008, and since 2013 it has been a constituent of the new WIG30
index. Since 2009, the Company has also been included in the RESPECT Index, the first CSR-focused
index in Central and Eastern Europe, and since 2013 – in the MSCI Emerging Markets index.
For more information, please contact:
Grzegorz Kulik
Grupa Azoty Group Press Officer
mobile: +48 785 780 005
email: rzecznik@grupaazoty.com