Grupa Azoty remains profitable in Q3 2014
The financial results of Grupa Azoty in Q3 2014 were published in mid-November 2014. The document also concerned the situation in the companies which belong to the consolidated capital group.
More reasons for satisfaction
Grupa Azoty has closed the third quarter of 2014 with a very good financial result. The earnings before interest and taxes (EBIT) reached 2 million PLN (-9 million PLN year-to-year), and the net profit was 9 million PLN (0.2 million PLN year-to-year), while the revenue from sales was 2.3 billion PLN (2.2 billion PLN year-to-year). Earnings before interest, taxes, depreciation, and amortization (EBITDA) were 127 million PLN in Q3 2014, or similar to the figure in the previous year (EBITDA of 111 million PLN in Q3 2013).
If the three past quarters of 2014 are taken into consideration, Grupa Azoty’s total revenue stood at a good 7.3 billion PLN (as compared to c. 7.5 billion PLN year-to-year). Once more, the financial results of the Group proved better than the market analysts and experts had expected.
Cheaper resources and the production cost
In Q3 2014 Grupa Azoty was able to leverage the advantages of the synergies in the Capital Group. Thanks to our activity aiming at lowering the purchasing prices of resources, we have been able to reduce the cost of production, and at the same time increase our business efficiency. The Vice Chairman of Grupa Azoty Andrzej Skolmowski said: despite a slight fall in EBITDA profitability of particular fertilizer groups, which has mainly resulted from a general downward trend in the pricing of strategic products, overall the decreasing prices of energy resources necessary for the production of fertilizers have had a positive impact on our situation. The prices of natural gas have dropped by 15 %, of coal – by 5-6%, of electricity – by 10-12%. Prices of phosphate and potassium salt, the resources for the manufacturing of compound fertilizers, have fallen by 25% on average.
In Plastics Segment, the sales grew by 18 million PLN, which mainly resulted from a lower volume base. The EBITDA indicator improved thanks to falling prices of energy resources and methanol,the growing production of caprolactam (and polyamide), as well as a slight rise in the prices of oil derivatives.
In the Chemistry Segment, Grupa Azoty closed a sales budget that was worth 81 million PLN more than the sales in the same period in the previous year. The good result was partly due to the takeover of a sulphur mine in Grzybów and a larger role of the sales of urea for technical purposes. The EBITDA profitability indicator looked up (reaching 3 %, as compared to -1% year-to-year), thanks to an improving situation on the resources’ side and the favorable pricing of granulated sulphur (meant for exportation).
The most important events in the recent months
The most important events for Grupa Azoty in Q3 2014 include the placement of the Company on the List of entities of strategic importance for the Polish Treasury. Also, the implementation of Strategy for 2014-2020 began. In this quarter, Grupa Azoty signed agreements concerning the sale of fertilizers in Poland in 2014-2015. We have also signed a cooperation agreement with Comexport as well as a contract with PKP CARGO regarding rail transportation of goods.