Acron Group’s Q1 2020 IFRS EBITDA Up 11% Quarter-on-Quarter

21 May 2020

Acron Group’s Q1 2020 IFRS EBITDA Up 11% Quarter-on-Quarter

Today, Acron Group (Moscow Exchange and LSE: AKRN) released its consolidated IFRS financial statements for Q1 2020.

Key Financials (USD equivalent)

• Revenue was USD 423 million, down 5% year-on-year (up 7% quarter-on-quarter).
• EBITDA* was USD 110 million, down 31% year-on-year (up 11% quarter-on-quarter).
• Net loss was USD 153 million (Q1 2019: profit of USD 133 million, Q4 2019: profit of USD 30 million). The loss was primarily generated by non-cash items, namely a USD 148-million foreign exchange loss from revaluation of foreign currency-denominated assets and liabilities, due to a slump in the dollar to rouble exchange rate in the reporting period.
• Net debt was up 4% to USD 1,258 million from USD 1,215 million.
• Net debt/LTM EBITDA** was 2.5, up from 2.2.

Operating Results

• Output of key products was 1.948 million tonnes, up 1% year-on-year.
• Sales of key products totalled 1.994 million tonnes, up 11% year-on-year.

Alexander Popov, Chairman of Acron Board of Directors, commented on the results:

“With an 11% increase in sales in Q1 2020, we almost offset the decrease in global prices for complex fertilisers and UAN, 19% and 31%, respectively, falling just 5% short of our Q1 2019 revenue.

“That said, financials did improve quarter-on-quarter: revenue was up 7%, EBITDA was up 11%. Despite the Covid-19 pandemic, we are seeing strong demand for mineral fertilisers globally. Supplies of key products to the domestic market are our priority, and these increased 45% to 682,000 tonnes.

“A weaker dollar to rouble exchange rate in the late first quarter has yet to result in higher operating profit but generated a foreign exchange loss from revaluation of the loan portfolio and negative net profit. The loss is non-cash and, therefore, not representative. A weaker rouble coupled with growing output will prop up our financials in future periods.

“In view of the uncertain dynamics on the global markets due to the pandemic, we reduced our capex, which affected the implementation rate of our flexible investment programme and will curb our debt burden”.

APPENDIX

Notes on Key Items in the Financial Statements

Financial Performance

In Q1 2020, Acron Group’s revenue was down 5% to RUB 28,079 million year-on-year due to lower global prices for most of the Group’s products. Sales of key products in the reporting period were up 11% year-on-year. The average dollar to rouble exchange rate changed slightly year-on-year.