April 29th 2008

P r e s s   R e l e a s e

Puławy Raises Earnigns Estimates Following Very Good Results Posted in Q3 2007/2008

Following the very successful third quarter, Zakłady Azotowe Puławy S.A. raises its earnigns estimates for the 2007/2008 financial year. According to the new forecast, the Company will post a record net profit of PLN 299m, up by 72% on the 2006/2007 financial year. 

In Q3 alone, Puławy’s profit reached PLN 125.1m and was by over 82% higher relative to the corresponding quarter of the previous year.

In Q3 (January 1st – March 31st 2008), operating profit grew by 85%, to PLN 148.3m, while the Company’s revenue stood at PLN 718.3m, up by 20% year-on-year.

Sales of fertiliser and non-fertiliser products grew by 18.5%, to PLN 655.1m. The increase was driven mainly by the sales of fertilisers, which grew in value terms by nearly 30% relative to Q3 2006/2007.

The chemicals and fertilisers markets continue to be very strong. We also notice stronger demand with limited supply. This applies mainly to the fertilisers market, where the selling prices of, for instance, UAN grew by almost 45%. We also managed to reduce to the minimum the effect of złoty appreciation by entering into appropriate hedging transactions, explains Paweł Jarczewski, President of the Management Board of ZA Puławy S.A.

In the segment of fertiliser products, Q3 2007/8 saw strong growth of revenues across all product groups. Sales of UAN grew in value terms by over 42%, while revenues from sales of ammonium sulphate grew almost two and a half times. The surge was driven by higher prices of grains paid to producers and the release of direct subsidies for farmers.

On the chemicals market, the Company recorded a 15% increase in revenues from sales of melamine. In Q3 2007/8, melamine prices grew due to limited supply, stronger demand and falling stocks. The melamine price is expected to continue to rise due to limited supply and the growing demand.