Acron Group Posts Q2 2020 IFRS Net Profit of USD 138 Million

28 August 2020

Acron Group Posts Q2 2020 IFRS Net Profit of USD 138 Million

Today, Acron (Moscow Exchange and LSE: AKRN) released its consolidated IFRS financial statements for Q2 and H1 2020.

Key Financials

• Q2 revenue was RUB 28,353 million, up 1% quarter-on-quarter. In US dollar equivalent, revenue was down 8%, to USD 390 million from USD 423 million.
• Q2 EBITDA* was RUB 8,029 million, up 10% quarter-on-quarter. In US dollar equivalent, EBITDA was up 1%, to USD 111 million from USD 110 million.
• Q2 EBITDA margin reached 28% (up from 26% in Q1 2020).
• Q2 net profit was RUB 9,140 million (against a loss in Q1 2020). In US dollar equivalent, net profit was USD 138 million.
• As at Q2 end, net debt was down 7% from Q1 end to RUB 90,939 million. In US dollar equivalent, it was up 3% to USD 1,300 million.
• As at Q2 end, Net debt/LTM EBITDA** was 3.0, unchanged from Q1 end. In US dollar equivalent, it was up to 2.9 from 2.5.

Operating Results

• In Q2 2020, commercial output of key products was 1.973 million tonnes, up 1% quarter-on-quarter. In H1 2020, output reached 3.921 million tonnes, up 3% year-on-year.
• Q2 sales of key products were 1.865 million tonnes, down 6% from Q1 2020. In H1 2020, sales were 3.859 million tonnes, up 1% year-on-year.

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

‘In Q2 2020, Acron Group saw better key financials quarter-on-quarter. Results have continued to recover after slumping in H2 2019 due to lower global prices for mineral fertilisers. The Group’s debt burden, however, remains high. We have taken a number of measures to change this, including CAPEX cuts and the sale of a potash lease in Canada and of a 10.1% stake in VPC.

‘In Q2, we completed one of our key projects in recent years with the launch of a new urea granulation unit capable of producing up to 700,000 tpa of premium product. Another two projects are in progress at the Veliky Novgorod site: upgrading the Ammonia-4 unit to increase its capacity by 70,000 tpa, and finishing the Urea 6+ project to increase the unit’s capacity by 520,000 tpa; we expect to complete these projects in Q4 2020 and Q2 2021, respectively.