Zakłady Azotowe Puławy S.A. started a new financial year 2008/2009 with excellent financial results. The Company made a profit of over PLN 157m which rose fourfold year on year. Particularly good results have been achieved in the fertilizers segment.
The Company increased its sales revenue by over 40%, up to PLN 686m, and operating profit was almost fivefold higher year on year, at PLN 185m. EBITDA was over PLN 201m vs. PLN 55m in Q1 of the previous year.
Fertilizer and non-fertilizer sales increased significantly, to PLN 642.2m (up by over 45%). In volume terms, the sales increased by nearly 10% for fertilizer products and by almost 4% for non-fertilizer products.
Appropriate diversification of the product mix helped us continue with strong performance, although the sector has already shown first signs of a slowdown. Please note that we have taken a full advantage of the typical Q1 imbalance between the demand and supply in the fertilizers market, explains Mr Paweł Jarczewski, President of the Management Board of ZA Puławy S.A. The chemicals market in Q1 of the financial year 2008/2009 was highly dynamic. Melamine prices continued to grow, and the demand grew at the same rate as in previous quarters despite the slowdown in the construction industry in Western Europe.
However, the caprolactam market slid on lower demand in China. In Europe, transfering high prices of raw materials for petrochemical products (including benzene) down the manufacturing chain is proving difficult, while financial weakness of polyamide producers is becoming evident. A dynamically developing market of AdBlue, in the summer season which is typically low for the transport industry, brought about flat sales (in July and August). In September 2008, AdBlue sales picked up again.
The demand-supply balance on the market of nitrogen fertilizers in Q1 2008/2009 was very favourable for the producers. For the first time in history, there was off-season decline in prices the products. The record-high prices of urea, especially in the first part of Q1, resulted from the product shortages on the international markets, which effectively drove up the prices of urea used for technical purposes.
On the Asian market, a number of urea plants in China were temporarily closed or reduced their output during the Olympic Games in Beijing due to the lower supply of electricity.
Nitrogen fertilizers imports to France in the reporting period nearly doubled year on year. This translated into high selling prices for this fertilizer charged by the Company.
Record high sales of urea-ammonium nitrate solution (UAN) on the Polish market resulted from large agricultural producers’ increasingly growing interest in liquid fertilizers.
