Togliattiazot 1H 2020 Financials

Public Joint-Stock Company Togliattiazot (PJSC TOAZ), Russia’s largest ammonia producer, has published its financial performance figures for the 1^st half of 2020.

In 1H of 2020 TOAZ revenues amounted to RUB 26.8 bn, which is 8 per cent lower compared with 1H 2019 (RUB 29.2 bn). The revenue decrease was mainly determined by a substantial fall in the global ammonia and urea prices due to the introduction of quarantine measures and businesses’ shutdowns in many countries due to the SARS-CoV-2 infection spread, which led to a global decrease in the consumption and demand level and in the prices for raw materials, accordingly.

Despite the pandemic TOAZ managed to maintain the sales volumes and its market share. In the reporting period, the production of ammonia (the company’s core product) – amounted to 1.515M tons, which is 3 per cent higher compared with the same period of 2019 (1.472M tons). The production of urea in 1H of 2020 amounted to almost 493 thousand tons, which is 14.6 per cent higher as compared with the same period of 2019 (430 thousand tons). The ammonia sales volume for the period amounts to 1,244 thousand tons. The urea sales volume amounts to 503 thousand tons, which is 37 thousand tons or 8per cent higher than the value for 1H of 2019.

The cost for 1H of 2020 has decreased by RUB 0.5 bn (or by 4 per cent) compared with the same period of 2019 mainly through the cost optimization activities carried out by the management of PJSC TOAZ.

The company’s net profit for 1H of 2020 amounts to RUB 0.7 bn, which is RUB 2.7 bn lower compared with 1H of 2019 (RUB 3.4 bn). The bottom line has been affected by the increase in selling expenses by 11 per cent. The main reason of such increase has been growth in sales volumes of both ammonia and urea as well as USD average exchange rate which has led to bigger transportation costs.

CEO’s Comment

Dmitry Mezheedov, CEO of CJSC Corporation Togliattiazot: “In 1H of 2020, the key objective was to ensure continuity of the business and safety of the personnel in the context of the coronavirus infection spread. Despite the need to work under those new, unusual conditions, TOAZ maintained the production output and has continued implementation of the investment program. In particular, construction of the third urea unit was going on, the investments in that project for the 1^st half of 2020 amounts to over RUB 1 bn. All this allows Togliattiazot to maintain its stability and competitiveness in the global market and to move towards reaching the goals embedded in the company’s strategy up to 2025.”