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Uralkali hit by weaker demand and lower potash prices

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Staff writer ▼ | April 12, 2016
Uralkali published its financial statements for 2015. Weaker demand and lower potash prices in key markets, combined with a reduction in Uralkali’s production capacity, impacted the company’s revenue.
Uralkali   Full-year revenue amounted to $3,123 million
Full-year revenue amounted to $3,123 million, a decrease of 12% compared to 2014.

Despite an increase in the EBITDA margin, supported by a drop in cash COGS by almost a third in US dollars terms, foreign exchange losses and fair value losses on derivative financial instruments had a negative impact on the Company’s net profit in 2015. Consequently, in 2015, this amounted to only $184 million.

Challenging conditions in the potash market had no material impact on the Company’s access to long-term external financing. Uralkali borrowed funds from both Russian and international financial institutions.

Under agreements with foreign banks, the Company raised $655 million as part of a four-year syndicated loan with an optional increase up to $800 million. Russia’s Sberbank provided the Company with a non-revolving $1.5 billion credit line with a five-year maturity period.

By the end of December 2015, the Company’s net debt amounted to $5,377 million, equivalent to 2.8x LTM EBITDA. The average interest rate for the entire loan portfolio was approximately 4%.

In June 2015, the Annual General Meeting decided not to pay dividends for 2014.