Acron’s net profit down on low nitrogen prices as higher output lifts revenue

Acron increased output of key products by 7% year on year in 2020 to 7.98m. tonnes. Total sales were also up, 3% year on year to 7.81m. tonnes, with the remainder captive product. This allowed for total revenue to increase 4% year on year in local currency to $1.66bn equivalent. Of note, currency fluctuations meant that the actual income in US dollars decreased from $1.77bn.

The company’s debt increased by 11% to $1.35bn in 2020.

Net profit declined substantially to $53m in 2020. In 2019, the net profit was $383m. Acron did launch a new granular urea unit in 2020 and was also hit by sharp UAN tariffs in Europe and aggressive UAN pricing from producers in the USA.

In 2020, Acron’s capital investments were $249m, another $210m is forecast to be spent this year with the producer continuing to expand capacity. At the Novgorod plant, a new calcium nitrate production facility is being built with a capacity of 100,000tpa. The Ammonia-3 unit is being upgraded with capacity being increased by 200,000tpa. These projects are scheduled for commissioning in 2022 and 2023, respectively. At the Dorogobuzh plant, a new nitric acid unit and increased capacity at the existing AN units will boost AN output by 180,000tpa. This project is expected to come on stream later this year.

The average prices of all key products were down year on year due to the general bearishness in 2020. The ammonia price declined from $235pt to $204pt (down 13%), ammonium nitrate prices fell from $189pt to $167pt (down 12%), UAN prices fell from $149pt to $125pt (down 16%), urea prices declined from $240pt to $222pt (down 8%). While, NPK values also declined from $296pt to $256pt (down 14%). All prices are on a FOB Baltic/Black Sea basis.

By Michael Samueli, Nitrogen Market Reporter