Fertiglobe Reports Q3 2024 Revenues Of USD 496 Million Amid Strategic Developments

Fertiglobe has announced its financial results for the third quarter of 2024, revealing revenues of $496 million, an adjusted EBITDA of $176 million, and an adjusted net profit of $31 million. For the first nine months of 2024, the company reported revenues of $1.5 billion, an adjusted EBITDA of $496 million, and an adjusted net profit of $135 million.

The company's net profits for both Q3 and the first nine months were affected by a provision related to potential changes in Sorfert's gas pricing setup. This provision amounted to $37 million for Q3 and $48 million for the nine-month period ending September 2024. Despite these potential adjustments, Fertiglobe maintains competitive costs in Algeria compared to its global operations.

Ahmed El-Hoshy, CEO of Fertiglobe, highlighted ADNOC's recent acquisition of a majority stake in Fertiglobe. He stated that ADNOC plans to transfer its 35% equity interest in the Baytown Texas low-carbon ammonia project in the US and two UAE projects to Fertiglobe. This move aims to position Fertiglobe as the world's largest low-carbon ammonia producer by 2029.

"ADNOC's stakes in the three projects will be transferred to Fertiglobe at cost and when ready for start-up," El-Hoshy explained. "This will lead to an immediate contribution to earnings upon transfer, concurrent with any funding requirements, improving project returns and preserving the Company's balance sheet during development and construction."

The inclusion of the US project into Fertiglobe's portfolio is contingent on its expected final investment decision (FID) in 2025. This addition marks a significant milestone for Fertiglobe as it evolves into a low-carbon ammonia growth platform with global reach. The company aims to serve emerging demand centres worldwide effectively.

This strategic transaction highlights Fertiglobe's commitment to expanding its low-carbon ammonia capabilities while maintaining its leadership in nitrogen products. ADNOC's expertise in hydrogen value chains and carbon capture supports this ambition.

Cost Optimisation Efforts

Fertiglobe is also advancing its value enhancement initiatives aimed at boosting free cash flow generation across market cycles. By September 2024, the company had achieved 92% of its $50 million cost optimisation run-rate savings target and remains on track to meet its full-year goal.

The Manufacturing Improvement Plan (MIP) is progressing well, targeting an additional $100 million in annual EBITDA by the end of 2025 compared to 2023. These improvements focus on enhancing production and energy efficiency.

El-Hoshy noted that while significant progress has been made on these initiatives, external factors such as gas and power supply fluctuations have muted their impact on volumes. Planned turnarounds during this period also contributed to this effect.

With inputs from WAM