Grupa Azoty posts stable financial results


Grupa Azoty’s second quarter 2022 results were heavily impacted by unrest caused by Russia’s invasion of Ukraine, which negatively impacted raw material availability and prices, driving up commodity prices. finished products in all business segments. Due to the drop in exports, the volumes of fertilizers supplied by Grupa Azoty to the domestic market were significantly higher compared to the same period last year.

In the second quarter of 2022, Grupa Azoty Group generated consolidated revenue of PLN 6410 million, EBITDA of PLN 1240 million, EBITDA margin of 19.3% and net profit of PLN 800 million.

In the first half of 2022, Grupa Azoty Group recorded a consolidated turnover of PLN 13,237 million, an EBITDA of PLN 2,575 million, an EBITDA margin of 19.5% and a net profit of 1,682 million PLN. The reported results are consistent with estimates published by Grupa Azoty.

Results were supported by prevailing product prices in the European markets where Grupa Azoty operates, but were affected by record prices for raw materials used in production processes and lower sales volumes of most categories of fertilizers, chemicals and plastics.

“The second quarter saw stable financial results across all business segments in a challenging market environment. In this context, we are particularly satisfied with the good performance of the Chemicals activity. The market turmoil caused by Russia’s invasion of Ukraine was enormous, unpredictable and completely beyond the company’s control. In the first half of 2022, Grupa Azoty was operating at full available capacity, actively meeting domestic fertilizer demand at the height of the spring fertilizer season. Record natural gas prices pushed fertilizer prices to levels that became unacceptable to end customers in the third quarter. This led to the decision to reduce production at three Group companies. Our Plastics business faced a similar market situation, with temporary production cuts implemented at the Tarnów and Pulawy plants. It should be noted that production reductions have been planned in such a way as to ensure the availability of sensitive products, including liquid CO2, ammonia water and mixtures of acids. Alongside its day-to-day operations, Grupa Azoty has started the implementation of its main strategic objectives 2021 – 2030, including the Green Azoty strategic project designed to diversify its own energy sources towards renewable and zero carbon sources. With this objective, we have expressed our interest in the construction project of the Brzezinka solar photovoltaic power plant with a capacity of up to 270 MWp and the integration with Zespól Elektrowni Wodnych Niedzica SA,” said Marek Wadowski, Vice- chairman of the board. Board of Directors of Grupa Azoty SA

Chemical products

In the second quarter of 2022, the Chemicals segment recorded year-over-year price increases across all product categories, with sales volume declines reported for most products. Rapidly rising prices for raw materials used in the production of chemicals have driven up product prices sharply, leading to weaker demand. The melamine market has been affected by the imminent expiry of anti-dumping duties on melamine imports from China to the European Union. Sulfur prices rose due to Russia’s invasion of Ukraine and supply constraints created by the cut in distribution channels from Russia and Kazakhstan. Higher sales volumes were reported primarily for technical grade urea and OXO alcohols. The segment posted an EBITDA margin of 22.0% for the second quarter of 2022.


In the Agro segment, high fertilizer prices, in particular natural gas, potassium chloride and phosphate rock, continued in the quarter under review. Difficult conditions in commodity markets were a consequence of Russia’s invasion of Ukraine, which led Russia to reduce or completely stop gas supplies to European Union countries. The supply chains of certain key raw materials and intermediates supplied to Grupa Azoty have experienced changes or disruptions. While major European fertilizer producers have implemented production cuts in response to record commodity prices, natural gas in particular, the supply of fertilizers across Europe has shrunk significantly. Prices for natural gas, a key feedstock in the production of fertilizers, were in a strong upward trend at the end of the second quarter of 2022 and reached new record highs in the third quarter of 2022. The average price of natural gas market in the second quarter of 2022 jumped about 290% year over year. These changes and the current market environment have resulted in a significant increase in product prices. In the second quarter of 2022, segment sales volumes were down 11% year-on-year, with a 21% decline reported for compound fertilizers. The Agro Segment posted an EBITDA margin of 18.0% for the second quarter of 2022.

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