Fertiglobe Reports Robust H1 2024 Revenues And Strategic Growth Initiatives

Fertiglobe announced H1 2024 revenues of $1,048 million, with adjusted EBITDA at $378 million, an adjusted net profit of $134 million, and free cash flows of $225 million. For Q2 2024, the company reported revenues of $496 million, adjusted EBITDA of $156 million, and an adjusted net profit attributable to shareholders of $15 million.

Despite rising natural gas costs and stable grain prices in Q2 2024 compared to Q1 2024, nitrogen prices were affected by delayed demand, cautious purchasing behaviour, and reduced urea imports from India. Some supply disruptions towards the end of the quarter partially offset these impacts.

CEO Ahmed El-Hoshy stated, "Over the past quarter, Fertiglobe has taken important steps towards achieving its strategic business objectives by maintaining the positive momentum surrounding some of its most significant operational projects and decarbonisation initiatives."

Fertiglobe's strong balance sheet and effective cash flow management enable it to pursue growth initiatives while balancing shareholder returns. A proposal for H1 2024 dividends will be presented to the Board for approval in September 2024, with payment expected in October 2024.

The company has partnered with TA'ZIZ, GS Energy Corporation, and Mitsui & Co., Ltd. on the TA'ZIZ 1 mtpa low carbon ammonia project. The Final Investment Decision (FID) has been made, and Tecnimont S.p.A. has been awarded the construction contract. Production is anticipated to start in 2027.

Fertiglobe was selected as the winning bidder in the first-of-its-kind H2Global auction. The company will supply renewable ammonia from Egypt to Europe under a contract worth up to €397 million at a delivered price of €1,000 per ton until 2033. This agreement supports demand and pricing for Fertiglobe and its partners in Egypt Green Hydrogen to reach FID on Africa's first integrated green hydrogen plant by H1 2025.

Decarbonisation Efforts

Supported by ADNOC, Fertiglobe delivered the world's first certified bulk commercial shipment of low-carbon ammonia enabled by carbon capture and storage to Mitsui & Co., Ltd. for clean-power generation in Japan. This shipment was produced at Fertiglobe's Abu Dhabi facilities.

ADNOC's $23 billion allocation towards decarbonisation and low-carbon solutions further demonstrates their strong partnership with Fertiglobe.

Cost Optimisation Programme

The company has progressed its cost optimisation programme with 84% of the $50 million run rate target already implemented as of June 2024, yielding $42 million in cost savings. Additionally, Fertiglobe prioritises its Manufacturing Improvement Plan (MIP), aiming to generate at least $100 million in incremental annual EBITDA by the end of 2025 compared to 2023 through improved energy efficiency and production.

Artificial Intelligence Integration

Fertiglobe remains committed to unlocking more value by investing in integrating artificial intelligence (AI) across its production platforms. This includes operations, maintenance, and sustainability efforts.

As of June 30th, 2024, Fertiglobe reported a net debt position of $880.6 million. This implies a net debt / LTM adjusted EBITDA ratio of 1.0x, allowing the company to balance future growth opportunities with dividend payouts supported by robust free cash generation and a healthy balance sheet.

The company continues to focus on creating shareholder value through active cost optimisation and manufacturing improvement initiatives that bolster cash flow generation while maintaining a robust balance sheet.

With inputs from WAM