ABU DHABI, UAE – Fertiglobe, the strategic partnership between ADNOC and OCI Global, on Tuesday reported Q1 2023 revenue of US$694 million, adjusted EBITDA of $297 million and adjusted net profit of $135 million.
The company also reported free cash flow of $271 million in Q1.
Fertiglobe delivered a 9 percent increase in own-produced sales volumes during the quarter.
This was driven by the company’s disciplined commercial strategy and centralized distribution capabilities, targeting demand centers that offer attractive netbacks.
Fertiglobe continues to have a strong order book for the coming months and markets have begun to tighten into the second quarter, resulting in improved prices in some regions.
In line with its continued commitment to creating and returning shareholder value, Fertiglobe guides for at least $250 million in dividends for H1 2023, payable in October 2023.
The exact amount will be disclosed with the Q2 2023 financial results in August 2023.
Ahmed El-Hoshy, CEO of Fertiglobe, said, “We are pleased to announce our Q1 earnings for 2023, with the nitrogen outlook remaining favorable in the medium to longer term.”
He said, “New supply that was commissioned in 2022 has been absorbed by the market and limited major greenfield supply additions are expected in the next four years.”
He added, “Meanwhile, agricultural demand is buoyed by attractive farmer economics, incentivizing nitrogen fertilizer application to replenish decade-low grain stocks.”
El-Hoshy said, “We are progressing several initiatives to further support free cash generation, including our manufacturing improvement plan announced last year, which is on track to deliver operational and EBITDA efficiencies over the next two-three years.”
He said, “We recently launched an initiative to further optimize Fertiglobe’s cost structure targeting $50 million in annualized savings to reinforce our top quartile cash cost positioning.”
He added, “We expect to achieve these savings over the next 12-18 months. We also expect a positive impact on our cost base from the recent devaluation of the Egyptian pound.”
Following the commissioning of the first phase of Egypt Green Hydrogen in Ain Sokhna during COP27 in Q4 2022, Fertiglobe has announced the production of on-spec green ammonia at its facilities in Egypt.
The company expects volumes to ramp up during 2023, targeting a Final Investment Decision on the full-scale 100MW electrolyzer plant this year.
The plant aims to produce up to 15,000 tons of green hydrogen as feedstock for producing up to 90,000 tons of green ammonia per year in Fertiglobe’s existing ammonia plants.