The operating income of the OCP group amounted to more than 8.05 billion dirhams (billion dirhams) at the end of June 2021, significantly higher than the 871 million dirhams recorded last year.
This sharp increase is explained by the non-recurrence of the donation of MAD 3 billion relating to OCP’s contribution to the Special National Covid-19 Fund, indicates the major player in the fertilizer industry in a press release on its half-yearly financial indicators.
EBITDA in the first half of 2021 grew 48% year-on-year to more than MAD 12.53 billion, the statement said, adding that the increase in selling prices, as well as The operational efficiency of the Group resulted in a strong EBITDA margin of 39%.
“In the first half of 2021, OCP continues to post solid financial and operational performance. The advantages inherent in our economic model, combined with favorable market conditions, have enabled us to achieve double-digit growth in our main financial indicators. This performance is part of a long-term investment perspective in sustainable growth and development programs ”, said Mostafa Terrab, Chairman and CEO of the Group, quoted by the press release.
“OCP’s industrial flexibility has enabled us to adapt our production in order to address the changing needs of our customers, in particular by redirecting part of our fertilizer exports to acid. Commercial agility, on which we constantly rely, has been a key factor in OCP’s ability to strengthen its position as a world leader in exports, by responding to the demand of high-growth markets ”, added Mostafa Terrab.
These attributes, he continued, associated with favorable prices and the Group’s optimized cost structure, led to a 19% increase in revenue compared to end-June 2020 and an increase of 800 basis points. EBITDA margin to 39%, ie, he said, “the highest level reached in the last decade”.
These good results were achieved against the backdrop of higher production of processed phosphate from levels in the first half of 2020, reflecting higher demand for phosphoric acid, while fertilizer production showed a slight decline from levels in the first half of 2020. at the end of June 2020, said the CEO of OCP.
“In addition, I am pleased to announce that on June 12, OCP successfully completed a new bond issue on international markets for a total amount of $ 1.5 billion, consisting of two maturity tranches of 10 and 30 years, with respective coupons of 3.750% and 5.125% ”, said Mostafa Terrab, noting that this new bond issue has been oversubscribed almost 5 times, “testifying to the confidence of international investors in OCP’s long-term growth plans”.
“We have allocated approximately two-thirds of the amount raised to the buyback of a large part of our existing international bonds, in order to optimize the maturity profile of our debt. The remaining funds will be used to finance the next phase of our investment program“, Said Mostafa Terrab
In addition, the press release reports a turnover of 32.47 billion dirhams in H1-2021, against 27.40 billion dirhams a year earlier, explaining this performance, mainly, by the improvement of market conditions, which largely offset a slight drop in sales volumes.
In fact, over the period, the turnover of rock increased by 11%, while the turnover of phosphoric acid and phosphate fertilizers increased by 27% and 20% respectively compared to the same period of the previous year.
This revenue growth was supported by higher selling prices in all three segments as well as higher acid export volumes, helping to mitigate the decline in rock and fertilizer sales volumes.
The decline in fertilizer exported volumes is mainly the result of OCP’s particularly low product inventory level at the start of 2021, given the record production and export volumes achieved in 2020, which included more than 11 million tonnes of fertilizer, explains the same source, noting that OCP has redirected part of its exports to phosphoric acid to meet market demand.
The Group’s operational efficiency, as well as the increase in selling prices, largely offset the increase in sulfur and ammonia costs, and resulted in a 21% increase in gross margin, to 21.177 billion dirhams, against 17.487 billion dirhams a year earlier.
Cash and cash equivalents amounted to MAD 15.08 billion at the end of June 2021, while net financial debt reached MAD 48.35 billion, with a financial leverage ratio of 2.13x which stood at compares to 2.80x, posted at the end of December 2020.