Fertiglobe reports 78% rise in 2022 net profit on higher fertiliser selling prices

Abu Dhabi-listed company's revenue surged 52% in the January-December period

Fertiglobe’s revenue stood at $5.03 billion last year, up from $3.31 billion in 2021. Photo: Fertiglobe

Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, has reported a 78 per cent rise in its 2022 net income after revenue rose on higher selling prices of key fertilisers last year.

Net profit attributable to shareholders for the 12-month period to the end of December rose to $1.25 billion, from $702.7 million in 2021, the company said on Tuesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Fertiglobe's adjusted net income grew by 75 per cent on an annual basis to $1.29 billion, from $737 million a year earlier.

Revenue for the reporting period surged 52 per cent to $5.03 billion, from $3.31 billion in 2021.

“We continue to bear the fruits of our centralised commercial strategy and focus on delivering on our operational excellence programme and our sustainability-focused projects and initiative,” chief executive Ahmed El-Hoshy said.

“We have successfully and safely completed several turnarounds across our plants in 2022, including in the [fourth quarter] in the UAE and Egypt, and do not have further turnarounds planned at these facilities in 2023.”

Fertiglobe’s net profit in the fourth quarter fell 53 per cent to $171.9 million, compared with the same period in 2021.

The company blamed the fall on lower urea selling prices in the latest reported quarter and a drop in European natural gas prices.

The European benchmark for natural gas, a key component in synthetic urea, hit record highs last year after Russia slashed exports to the continent in response to wide-ranging economic sanctions.

Fertiglobe said fundamentals in the nitrogen fertiliser markets were “healthy”, with demand expected to recover this year amid a rebuilding of global grain stocks until at least 2025.

Total product volumes rose 6 per cent in the fourth quarter, but fell marginally last year.

“There is significant pent-up demand for nitrogen fertilisers ahead of the application season, and affordability is boosted by the recent price declines,” said Mr El-Hoshy.

“We expect demand upside for our industrial business, supportive of ammonia primarily, driven by a recovery in China, lower energy prices supporting global industrial demand, and an improving outlook for global growth.”

China, the world’s second-largest economy and top manufacturing country, reopened its borders last month after adhering to a strict zero-Covid policy for about three years.

“We have a good order book going into the first quarter of 2023, and our disciplined commercial strategy and distribution capabilities allow us to manage inventories close to main demand centres, placing us well to serve key import markets,” said Mr El-Hoshy.

In December, Fertiglobe, a joint venture between Adnoc and Netherlands-listed OCI, said it would refinance its outstanding $900 million bridge facility, originally due in 2024, with new $300 million three-year and $600 million five-year facilities.

The company raised about $795 million from its initial public offering on the ADX in 2021, amid strong demand from international, regional and local investors.

It has announced a dividend of $700 million for the second half of 2022, payable in April this year.