The winning streak of Grupa Azoty – the company’s financial results

| Prospects & Investment |

The announcement of 2014 financial results of Grupa Azoty and particular companies in the Group was held on March 16th, 2015.

Good results despite a difficult market situation

The overall financial result of Grupa Azoty in 2014 proved excellent. Revenue from sales approached 9.9 billion PLN (as compared to 9.8 billion in 2013), while the net income was 265 million PLN (net income in 2013 minus one-off events was 245 million PLN). The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) increased by nearly 100 million PLN in comparison with the previous year’s results. Earnings including amortization reached 822 million PLN in 2014. Also, the results of the Group proved better than the original forecast.

Sales in particular segments

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CONSOLIDATED REVENUE STRUCTURE 2014

AGRO Segment played a crucial role in obtaining good results. When 2014 is compared with the previous year, the Group managed to maintain EBITDA profitability at about 11%. This was possible thanks to good cooperation in the Capital Group and cost reduction.

Andrzej Skolmowski, the Vice Chairman of Grupa Azoty, said at the press conference that “the breakdown of sales results from various key activities has proven that CHEMISTRY Segment has grown the most, mainly due to poor results in 2013, which had not included full Grupa Azoty SIARKOPOL sales that year (Siarkopol consolidation commenced in Q4). Key AGRO and PLASTICS Segments maintained sales results similar to those from 2013.”

PLASTICS Segment improved the margin from -8% to -2%, mainly due to the optimization of production and the growth of the sales volume. EBITDA profitability rose largely because of the falling prices of energy resources.

The CHEMISTRY Segment, despite improved sales, saw EBITDA margin fall from 71 million PLN in 2013 to 45 million PLN in 2014.

Various steps were taken by Grupa Azoty in 2014 in order to tighten the cooperation between the entities in the Group and to consolidate the Works even further. The joint value of investment expenditure in 2014 was 572 million PLN.

Investment in Grupa Azoty

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Two major investment procedures were launched in Tarnów in 2014. The first one is the construction of a new Polyamide Plant II with planned output capacity of 80,000 tonnes/year (the total investment budget is 320 million PLN), and the second one is the Mechanical Granulation Installation project (141 million PLN).

The main investment projects in Puławy included an installation for the production of liquid fertilizers based on urea and ammonium sulphate (total expenditure: 69.5 million PLN) as well as ammonia stockage (108.5 million PLN). Progress was also made in the construction of the installation for the production of solid fertilizers based on urea and ammonium sulphate (98 million out of 137.5 million PLN of the total budget was spent in 2014). Also, the network of containers for RSM sale was extended.

In Police, the major investment projects in 2014 included the modernization of the ammonia synthesis reactors (10.5 million out of 24 million PLN of the total budget was spent in 2014) and the extension of the installation for desulphurization of calcination-derived gases with two new reactors added (3.9 million out of 8.8 million PLN of the total budget was spent in 2014).

In Grupa Azoty ZAK S.A. the first stage of the construction of a new heat and power plant was commenced in 2014 (61 million out of a total budget of 375 million PLN was spent in 2014).