Q2 2022 Results
Fertiglobe Reports Q2 2022 Adj. Net Profit of $438 million; Announces H1 2022 Dividend
at $750 million, Supported by Solid Free Cash Flow Generation
Highlights:
Financial and Outlook
• Q2 2022 revenues increased 105% YoY to $1,471 million and adjusted EBITDA +155% YoY to $770 million, driven
by higher selling prices and higher own-produced sales volumes as some deliveries were rephased from Q1 2022 at
better netbacks.
• H1 2022 revenues increased 111% to $2,656 million YoY, while adjusted EBITDA was up 162% to $1,395 million.
• Adjusted net profit was $438 million in Q2 2022, an increase of 270% compared to $119 million in Q2 2021, and $799
million in H1 2022 compared to $202 million in H1 2021.
• Fertiglobe generated free cash flow of $789 million in Q2 2022, a 141% increase as compared to same period last
year, and $1,310 million in H1 2022 versus $479 million in H1 2021. Net cash position of $445 million as of 30 June
2022 is supportive of growth opportunities and attractive dividend pay-out.
• H1 2022 dividends announced at $750 million (payable October 2022), above our guidance of at least $700 million.
• Favourable farm economics and low global grain stocks, combined with high gas prices in Europe, provide support for
nitrogen selling prices to remain above historical averages
• Our attractive dividend outlook is further backed by Fertiglobe’s competitive position on the global cost curve and free
cash flow conversion capacity. Fertiglobe remains committed to its policy of balancing distributions of all excess free
cash flows after growth capex, while maintaining its investment grade parameters. More detailed guidance on the H2
2022 dividend will be provided with Q3 2022 results in November 2022.
Corporate Updates:
• In June 2022, Fertiglobe was issued first time investment grade ratings by S&P, Moody's and Fitch (BBB-, Baa3 and
BBB-, respectively), recognizing its strong free cash flow generation, conservative financial policy and robust outlook.
Abu Dhabi, UAE – 2 August 2022: Fertiglobe (ADX: FERTIGLB), the strategic partnership between ADNOC and OCI, the
world’s largest seaborne exporter of urea and ammonia combined, the largest nitrogen fertilizer producer in the Middle East
and North Africa (“MENA”) region, and an early mover in clean ammonia, today reported that its Q2 2022 revenues
increased 105% to $1,471 million, while adjusted EBITDA grew 155% to $770 million compared to Q2 2021. Free cash
flow increased to $789 million in Q2 2022 from $328 million in Q2 2021.
Ahmed El-Hoshy, Chief Executive Officer of Fertiglobe commented:
“Q2 2022 marks another quarter of solid performance, driven by a favourable price backdrop supported by strong in-season
demand, tight market balances and elevated gas prices in Europe, as well as higher sales volumes due to a phasing of
some shipments from Q1 2022 to this quarter. We are pleased to announce H1 2022 dividends at $750 million, above our
previous guidance of at least $700 million, driven by robust earnings, healthy cash conversion and our capital structure.
We are also delighted to achieve investment grade credit ratings by three rating agencies: S&P (BBB-), Moody's (Baa3)
and Fitch (BBB-), supported by an attractive cash flow profile and a prudent financial policy.
1Q2 2022 Results
In addition, Fertiglobe was included in the FTSE EM Index in June 2022, following its March 2022 inclusion in the FTSE
ADX 15 Index, representing the 15 largest and most liquid companies on the Abu Dhabi Securities Exchange.
The outlook for the fundamentals of our nitrogen end markets continues to be underpinned by tight supply, healthy farm
economics and low grain stocks globally that incentivize the use of nitrogen fertilizers. Forward curves imply that natural gas
prices in Europe will remain at elevated levels through at least 2023, setting breakeven pricing well above historical average
global prices for ammonia and urea.
We continue to focus on operational excellence and utilizing our young, world-scale production assets efficiently while fully
capitalizing on global supply chains – in partnership with OCI – to capture the highest netbacks. We aim to fill supply gaps
to help address global food security concerns, supported by our position as a leading producer and largest seaborne
exporter globally of essential nitrogen fertilizer products.
Fertiglobe’s low leverage positions the company favorably to selectively pursue value-creative growth opportunities,
including organic expansions below replacement cost, capitalizing on the emerging demand for low-carbon ammonia as a
solution to decarbonize industries that make up around 90% of current global greenhouse gas emissions.
Finally, I would like to thank the Fertiglobe team for their efforts to deliver best-in-class performance and their focus on
safety. We look forward to continuing to create value for all our stakeholders.”
Markets
Nitrogen outlook supported by crop fundamentals and high gas prices in Europe
Nitrogen product prices are supported by several market factors which suggest a structural shift to a multi-year demand
driven environment.
i. Nitrogen pricing has support to remain significantly above historical averages. European nitrogen producers are
currently the marginal producer with the forward curve for natural gas implying elevated input costs for the medium
term:
Gas price futures in Europe currently indicate c.$60 / mmBtu for the balance of the year and $36 / mmBtu
o
for 2023 and 2024, compared to $5 / mmBtu in the 2016 to 2020 period.
At these higher feedstock prices, the costs for marginal producers in Europe imply support levels for
o
ammonia at >$2,000/t for the balance of 2022 and >$1,300/t in 2023 / 2024 (excluding CO2 costs), which
is 6-9x higher than the c.$230/t support level during 2016 – 2020.
This translates into price support of >$1,200 / ton for urea for the balance of 2022 (and >$780 / ton in 2023
o
/ 2024)
Prices can drop below such floors particularly during off-season periods, but economics have historically
o
prevailed when margins for producers remain negative for a sustained period, triggering shutdowns as
has been occurring in Europe over the past 12 months.
ii. Nitrogen supply is structurally tighter over 2022 – 2026, resulting in an estimated market deficit of c.7 million tons
for urea. In addition:
In Europe, c.7 million tons of ammonia capacity out of a total 19 million tons is currently shut due to the
o
high gas prices. Given elevated gas price futures and risks related to Russian gas supply, more capacity
may be shut down should selling prices remain below gas-based production costs.
2Q2 2022 Results
Russian ammonia exports from the Black Sea are limited due to logistical constraints (impacting c.2 million
o
tons ammonia or c.10% of global trade)
Urea exports from China, needed to balance the markets, are expected to remain low over the medium
o
term, with controls to curb exports in place until H2 2023 at least and prioritization for domestic supply
iii. Crop fundamentals remain supportive for nitrogen demand:
Global grain stock-to-use ratio remains at decade lows and it will take at least until 2024 to replenish stocks
o
Grain futures (US corn futures at 6.0 /bushel and wheat at $8.0 / bushel from H2 2022 till the end of 2024)
o
remain at levels that incentivize farmers globally to maximize yields by using more nitrogen
Disruptions to agricultural supply chains with reduced fertilizer application in some regions, dry weather,
o
and a late US season is expected to defer demand into 2023 given relative inelasticity of nitrogen demand
Gas markets
Fertiglobe’s assets are favourably positioned on the global cost curve, and we are a net beneficiary of a higher global gas
price environment. Fertiglobe has a significant competitive advantage with favourable gas price supply agreements,
including fixed prices in Abu Dhabi and profit-sharing mechanisms in North Africa.
Dividends and capital structure
Fertiglobe’s dividend policy is to substantially pay out all excess free cash flows after providing for growth opportunities,
while maintaining investment grade credit ratings (S&P: BBB-, Moody’s: Baa3, Fitch: BBB-; all with stable outlooks). Given
the company’s free cash generation, Fertiglobe announced cash dividends of $750 million for H1 2022, above management
guidance of at least $700 million. The dividend will be presented to shareholders for approval and is payable in October
2022.
Fertiglobe’s potential for attractive future dividends is supported by its cash flow performance and competitive position on
the global cost curve. Strong earnings and cash generation during the quarter resulted in a net cash position of $445 million
as of 30 June 2022, compared to net debt of $487 million as at 31 December 2021 (0.3x net debt / adjusted EBITDA),
supporting future growth opportunities and an attractive dividend pay-out.
Beyond H1 2022, Fertiglobe remains committed to its dividend policy of substantially distributing all excess free cash flows
after providing for growth opportunities and maintaining its investment grade parameters. More detailed guidance on the H2
2022 dividend will be provided with Q3 2022 results in November 2022.
3Q2 2022 Results
Consolidated Financial Results at a Glance1
Financial Highlights ($ million unless otherwise stated)
$ million unless otherwise stated Q2 2022 Q2 2021 % Δ H1 2022 H1 2021 % Δ
Revenue 1,471.3 716.6 105% 2,656.1 1,260.0 111%
Gross Profit 747.8 252.8 196% 1,335.6 442.0 202%
Gross profit margin 50.8% 35.3% 50.3% 35.1%
Adjusted EBITDA 770.0 301.4 155% 1,394.6 532.2 162%
Adjusted EBITDA margin 52.3% 42.1% 52.5% 42.2%
EBITDA 770.0 302.5 155% 1,389.6 533.3 161%
EBITDA margin 52.3% 42.2% 52.3% 42.3%
Adjusted net profit attributable to
438.2 118.5 270% 799.2 202.1 295%
shareholders
Reported net profit attributable to
429.4 113.3 279% 786.0 198.5 296%
shareholders
Earnings per share ($)
Basic earnings per share 0.052 0.014 279% 0.095 0.024 296%
Diluted earnings per share 0.052 0.014 279% 0.095 0.024 296%
Adjusted earnings per share 0.053 0.014 270% 0.096 0.024 295%
Earnings per share (AED)
Basic earnings per share 0.190 0.050 279% 0.348 0.088 296%
Diluted earnings per share 0.190 0.050 279% 0.348 0.088 296%
Adjusted earnings per share 0.194 0.052 270% 0.354 0.089 295%
Free cash flow 788.7 327.6 141% 1,309.5 478.9 173%
Capital expenditure 14.6 5.7 156% 24.0 13.6 76%
Of which: Maintenance Capital Expenditure 13.0 5.4 141% 19.8 12.9 53%
30-Jun-22 31 Dec 21 % Δ
Total Assets 5,707.1 5,168.5 10%
Gross Interest-Bearing Debt 1,144.0 1,385.7 -17%
Net (Cash)/Debt (445.0) 486.6 n/m
Q2 2022 Q2 2021 % Δ H1 2022 H1 2021 % Δ
Sales volumes (‘000 metric tons)
Fertiglobe Product Sold 1,540 1,438 7% 2,794 2,943 -5%
Third Party Traded 236 367 -36% 512 522 -2%
Total Product Volumes 1,776 1,805 -2% 3,306 3,465 -5%
1) Unaudited
The full financial statements can be found at https://fertiglobe.com/investor-relations/.
4Q2 2022 Results
Operational Highlights
Highlights
• 12-month rolling recordable incident rate to 30 June 2022 of 0.29 incidents per 200,000 manhours.
• Fertiglobe’s improved performance in Q2 2022 compared to Q2 2021 is due to an increase in selling prices year-
on-year across its product portfolio, in addition to higher own-produced sales volumes due to a rephasing of some
shipments to Q2 2022 from Q1 2022.
• Fertiglobe’s total own-produced sales volumes were up 7% to 1,540kt in Q2 2022 vs Q2 2021, driven by:
A 13% increase in ammonia own-produced sales volumes to 357kt from 316kt in Q2 2021, and
o
5% higher urea own-produced sales volumes of 1,183kt YoY compared to 1,122kt in Q2 2021.
o
• Traded third party volumes decreased 36% YoY to 236kt in Q2 2022, compared to 367kt in Q2 2021.
• Total own-produced and traded third party volumes were 2% lower in Q2 2022, compared to Q2 2021, due to lower
third party traded volumes.
• In H1 2022, Fertiglobe’s total own-produced sales volumes were down 5% to 2,794kt compared to H1 2021, driven
by:
A 21% decrease in ammonia own-produced sales volumes to 580kt from 734kt in H1 2021, and
o
Relatively unchanged urea own-produced sales volumes of 2,214kt.
o
• Traded third party volumes were down marginally (-2% YoY) to 512kt in H1 2022.
• Middle East ammonia and Egypt urea benchmark prices were 87% and 104% higher YoY, respectively, in Q2
2022 (+8% and -5% compared to Q1 2022).
Product Sales Volumes (‘000 metric tons)
Sales volumes (‘000 metric tons) Q2 2022 Q2 2021 % Δ H1 2022 H1 2021 % Δ
Own Product
Ammonia 357 316 13% 580 734 -21%
Urea 1,183 1,122 5% 2,214 2,209 0%
Total Own Product Sold 1,540 1,438 7% 2,794 2,943 -5%
Third-Party Traded
Ammonia 27 29 -7% 79 64 23%
Urea 209 338 -38% 433 458 -5%
Total Traded Third-party Product 236 367 -36% 512 522 -2%
Total Own Product and Traded Third-party 1,776 1,805 -2% 3,306 3,465 -5%
5Q2 2022 Results
Benchmark Prices
Q2 '22 Q2 '21 % Δ H1 '22 H1 '21 % Δ Q1 '22 % Δ
Ammonia Black Sea, FOB $/mt 1,378 464 197% 1,279 398 221% 1,180 17%
Ammonia Middle East, FOB $/mt 965 516 87% 992 441 125% 897 8%
Granular Urea Egypt, FOB $/mt 795 390 104% 818 378 116% 841 (5%)
Granular Urea Middle East, FOB $/mt 721 377 91% 748 361 107% 776 (7%)
Natural gas TTF (Europe) $ / mmBtu 30.8 9.2 235% 31.5 7.9 299% 32.2 (4%)
Natural gas Henry Hub (US) $ / mmBtu 8.1 3.0 170% 6.3 2.9 117% 4.6 76%
Operational Performance
Total own-produced sales volumes were up 7% during the second quarter of 2022 to 1,540kt compared to the same period
last year, mainly due to a rephasing of urea and ammonia shipments to Q2 2022.
Ammonia and urea selling prices were well above prices seen in Q2 2021, with ammonia Middle East benchmark up 87%
YoY and the urea Egypt benchmark price up 104%. Compared to Q1 2022, the ammonia Middle East benchmark was up
8%, while the urea Egypt benchmark price was down 5%.
The higher selling prices resulted in a 105% YoY increase in revenues to $1,471 million in Q2 2022. This translated into a
155% increase in adjusted EBITDA to $770 million in Q2 2022 from $301 million in Q2 2021. As a result, Fertiglobe’s
adjusted EBITDA margin expanded to 52.3% in Q2 2022 from 42.1% in Q2 2021.
6Q2 2022 Results
Segment overview Q2 2022
Production and marketing of
$ million Third party trading Other Total
own produced volumes
Total revenues 1,275.4 195.9 - 1,471.3
Gross profit 749.8 (2.0) - 747.8
Operating profit 724.5 (2.0) (15.3) 707.2
Depreciation & amortization (62.5) - (0.3) (62.8)
EBITDA 787.1 (2.0) (15.1) 770.0
Adjusted EBITDA 787.1 (2.0) (15.1) 770.0
Segment overview Q2 2021
Production and marketing of
$ million Third party trading Other Total
own produced volumes
Total revenues 565.9 150.7 - 716.6
Gross profit 247.7 4.0 1.1 252.8
Operating profit 228.9 4.0 (2.9) 230.0
Depreciation & amortization (72.4) - (0.1) (72.5)
EBITDA 301.3 4.0 (2.8) 302.5
Adjusted EBITDA 301.3 4.0 (3.9) 301.4
Segment overview H1 2022
Production and marketing of
$ million Third party trading Other Total
own produced volumes
Total revenues 2,265.8 390.3 - 2,656.1
Gross profit 1,337.4 3.2 (5.0) 1,335.6
Operating profit 1,291.5 3.2 (29.9) 1,264.8
Depreciation & amortization (124.4) - (0.4) (124.8)
EBITDA 1,415.9 3.2 (29.5) 1,389.6
Adjusted EBITDA 1,415.9 3.2 (24.5) 1,394.6
Segment overview H1 2021
Production and marketing of
$ million Third party trading Other Total
own produced volumes
Total revenues 1,054.8 205.2 - 1,260.0
Gross profit 433.7 7.2 1.1 442.0
Operating profit 395.7 7.2 (5.9) 397.0
Depreciation & amortization (136.1) - (0.2) (136.3)
EBITDA 531.8 7.2 (5.7) 533.3
Adjusted EBITDA 531.8 7.2 (6.8) 532.2
7Q2 2022 Results
Financial Highlights
Summary results
Consolidated revenue increased by 105% to $1,471 million in the second quarter of 2022 compared to the same quarter in
2021, driven by higher prices across the board of Fertiglobe’s product portfolio.
Adjusted EBITDA grew 155% YoY to $770 million in Q2 2022 compared to $301 million in Q2 2021. Fertiglobe benefited
from higher selling prices during the quarter as well as higher sales volumes of own produced urea and ammonia, which
have more than offset higher profit sharing.
Q2 2022 adjusted net profit was $438 million compared to an adjusted net profit of $119 million in Q2 2021. Reported net
profit attributable to shareholders was $429 million in Q2 2022 compared to a net profit attributable to shareholders of $113
million in Q2 2021.
Consolidated Statement of Income 1
$ million Q2 2022 Q2 2021 H1 2022 H1 2021
Net revenue 1,471.3 716.6 2,656.1 1,260.0
Cost of Sales (723.5) (463.8) (1,320.5) (818.0)
Gross profit 747.8 252.8 1,335.6 442.0
SG&A (39.6) (22.8) (70.0) (45.0)
Other Expense (1.0) - (0.8) -
Adjusted EBITDA 770.0 301.4 1,394.6 532.2
EBITDA 770.0 302.5 1,389.6 533.3
Depreciation & amortization (62.8) (72.5) (124.8) (136.3)
Operating profit 707.2 230.0 1,264.8 397.0
Interest income 0.5 0.3 0.9 0.5
Interest expense (25.2) (11.8) (42.0) (21.4)
Other finance income 5.3 0.6 21.2 4.5
Net finance costs (19.4) (10.9) (19.9) (16.4)
Net profit before tax 687.8 219.1 1,244.9 380.6
Income tax expense (64.7) (37.0) (154.7) (64.0)
Net profit 623.1 182.1 1,090.2 316.6
Non-Controlling Interest (193.7) (68.8) (304.2) (118.1)
Net profit attributable to shareholders 429.4 113.3 786.0 198.5
Adjusted net profit attributable to shareholders 438.2 118.5 799.2 202.1
1) Unaudited
The full financial statements can be found at https://fertiglobe.com/investor-relations/.
8Q2 2022 Results
Reconciliation to Alternative Performance Measures
Adjusted EBITDA
Adjusted EBITDA is an Alternative Performance Measure (APM) that intends to give a clear reflection of underlying
performance of Fertiglobe’s operations.
Reconciliation of reported operating profit to adjusted EBITDA
$ million Q2 2022 Q2 2021 H1 2022 H1 2021 Adjustment in P&L
Operating profit as reported 707.2 230.0 1,264.8 397.0
Depreciation and amortization 62.8 72.5 124.8 136.3
EBITDA 770.0 302.5 1,389.6 533.3
APM adjustments for:
Movement in provisions - (1.1) 5.0 (1.1) Cost of sales
Total APM adjustments - (1.1) 5.0 (1.1)
Adjusted EBITDA 770.0 301.4 1,394.6 532.2
Adjusted net profit attributable to shareholders
At the net profit level, the main APM adjustments relate to the impact on non-cash foreign exchange gains on US$ exposure,
accelerated depreciation and other financial expenses.
Reconciliation of reported net profit to adjusted net profit
$ million Q2 2022 Q2 2021 H1 2022 H1 2021 Adjustment in P&L
Reported net profit attributable to shareholders 429.4 113.3 786.0 198.5
Adjustments for:
Adjustments at EBITDA level - (1.1) 5.0 (1.1)
Accelerated depreciation - 9.2 - 9.2 Depreciation
Forex gain on USD exposure (18.4) (2.0) (33.0) (6.3)
Finance income and
expense
Other financial expense 9.7 - 9.7 - Finance expense
Non-controlling interest 17.5 1.3 31.5 4.0 Minorities
Tax effect of adjustments - (2.2) - (2.2) Taxes
Total APM adjustments at net profit level 8.8 5.2 13.2 3.6
Adjusted net profit attributable to shareholders 438.2 118.5 799.2 202.1
9Q2 2022 Results
Free Cash Flow and Net Debt
Free cash flow before growth capex amounted to $789 million during Q2 2022, compared to $328 million during the same
period last year, reflecting performance for the quarter, taxes and maintenance capital expenditures.
Total cash capital expenditures including growth capex were $15 million in Q2 2022 compared to $6 million in Q2 2021.
Management continues to expect 2022 capital expenditures (excluding growth capital expenditure) to be in the range of
$120-140 million.
Reconciliation of EBITDA to Free Cash Flow and Change in Net Debt
$ million Q2 2022 Q2 2021 H1 2022 H1 2021
EBITDA 770.0 302.5 1,389.6 533.3
Working capital 93.0 54.4 13.6 (4.8)
Maintenance capital expenditure (13.0) (5.4) (19.8) (12.9)
Tax paid (77.3) (19.4) (133.7) (35.1)
Net interest paid (11.3) (9.8) (23.0) (18.6)
Lease payments (5.7) (4.4) (7.0) (5.7)
Dividends paid to non-controlling interests and withholding tax (63.5) (10.6) (67.3) (10.6)
Ecremage 96.5 20.3 157.1 33.3
Free Cash Flow 788.7 327.6 1,309.5 478.9
Reconciliation to change in net debt:
Growth capital expenditure (1.6) (0.3) (4.2) (0.7)
Other non-operating items (2.9) (16.3) (2.9) (15.5)
Net effect of movement in exchange rates on net debt 0.5 (1.3) (25.2) (0.3)
Dividend to shareholders (340.0) (23.1) (340.0) (55.0)
Other non-cash items (2.1) (0.5) (5.6) (1.0)
Net Cash Flow / Decrease in Net Debt 442.6 286.1 931.6 406.4
10Q2 2022 Results
Investor and Analyst Conference Call
On 2 August 2022 at 4:30 PM UAE (12:30 PM London, 7:30 AM New York), Fertiglobe will host a conference call for
investors and analysts. To access the call please dial:
International: +44 20 3936 2999
UAE: 0800 0357 04553
UK: 020 3936 2999 / Toll free: 0800 640 6441
United States: 1 646 664 1960 / Toll Free: 1 855 9796 654
Passcode: 055635
About Fertiglobe:
Fertiglobe is the world’s largest seaborne exporter of urea and ammonia combined, and an early mover in clean ammonia.
Fertiglobe’s production capacity comprises of 6.7 million tons of urea and merchant ammonia, produced at four subsidiaries
in the UAE, Egypt and Algeria, making it the largest producer of nitrogen fertilizers in the Middle East and North Africa
(MENA), and benefits from direct access to six key ports and distribution hubs on the Mediterranean Sea, Red Sea, and
the Arab Gulf. Headquartered in Abu Dhabi and incorporated in Abu Dhabi Global Market (ADGM), Fertiglobe employs
more than 2,600 employees and was formed as a strategic partnership between OCI N.V. (“OCI”) and the Abu Dhabi
National Oil Company (“ADNOC”). Fertiglobe is listed on the Abu Dhabi Securities Exchange (“ADX”) under the symbol
“FERTIGLB” and ISIN “AEF000901015. To find out more, visit: www.fertiglobe.com
For additional information, contact:
Fertiglobe Investor Relations: For additional information on Fertiglobe:
Rita Guindy www.fertiglobe.com
Director
rita.guindy@fertiglobe.com
Hans Zayed
Director
hans.zayed@fertiglobe.com
investor.relations@fertiglobe.com
11

Sentiment: positive