Abu Dhabi, UAE — Fertiglobe, the strategic partnership between ADNOC and OCI, Thursday reported that its Q3 2022 revenues increased 52 percent year-on-year to US$1.32 billion, while adjusted EBITDA grew 64 percent to US$606 million.
Free cash flow increased to US$189 million in Q3 2022 from US$56 million in Q3 2021, a 237 percent increase versus the same period last year. Adjusted net profit in Q3 2022 was US$292 million, increasing by 84 percent year-on-year.
For the nine months, revenue increased by 87 percent in 2022 to reach US$3.97 billion, with adjusted EBITDA of US$2.0 billion, up 122 percent, and adjusted net profit of US$1.10 billion, increasing by 203 percent.
Fertiglobe’s strong cash position supports the Company in pursuing compelling growth opportunities and enabling a highly attractive dividend payout.
Management guidance for H2 2022 dividends is that the Company will pay a minimum of US$700 million, equivalent to AED0.31 per share, to shareholders in April 2023. Fertiglobe’s attractive dividend outlook is backed by its competitive position on the global cost curve and free cash flow conversion capacity.
“We are pleased to report another very solid set of results, driven by a step-up in urea and ammonia prices, supported by tight market balances outweighing the usual seasonal slowdown,” Ahmed El Hoshy, CEO of Fertiglobe said. “Looking ahead, our international order book is robust, as demand picks up in key import markets, giving us good visibility for Q4 and H1 2023.”
The outlook for the fundamentals of Fertiglobe’s nitrogen end markets continues to be underpinned by tight supply, healthy farm economics and decades-low grain stocks globally, which incentivize the use of nitrogen fertilisers.
Meanwhile, Fertiglobe is making progress with its low carbon ammonia project pipeline, including a demonstration plant in Egypt as a proof of concept for green hydrogen to green ammonia.
The Company is looking to deliver on its hydrogen strategy, while targeting investments significantly below replacement costs and setting the stage for the leading role it aspires to play in decarbonizing industries that make up more than 90 percent of current global greenhouse gas emissions.
Strong earnings and cash generation during the quarter resulted in a net cash position of US$644 million as of September 30, 2022, compared to net debt of US$487 million as at December 31, 2021 (0.3x net debt / adjusted EBITDA), supporting future growth opportunities and an attractive dividend pay-out.
Fertiglobe’s dividend policy is to 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).
Based on the current visibility of Fertiglobe’s order book and its favourable positioning on the global cost curve, management is guiding for H2 2022 dividends at a minimum of US$700 million, payable in April 2023.
The exact amount of the H2 2022 dividend will be announced with Q4 2022 results in February 2023. During calendar year 2022, Fertiglobe paid cash dividends of US$1.1 billion