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Fertiglobe — a UAE-headquartered urea and ammonia exporter and MENA’s largest producer of nitrogen fertilizers — reported a 60.2% y-o-y drop in net income in 2Q 2024 to USD 42.7 mn, according to its financial statement (pdf). Its revenues were down 10.1% y-o-y to USD 495.7 mn during the period.
Behind the numbers: The company said its own-produced sales volumes were down 2% y-o-y in 2Q 2024 due to a five percent decline in own-produced urea volumes during the period, according to its earnings release (pdf). Such a drop offset a 12% rise in ammonia sales volumes during the quarter. “When excluding the impact of the gas supply shortages in Egypt, Q2 2024 and H1 2024 own-produced sales volumes would have been up 8.1% and 6.6% y-o-y, respectively,” it said.
“Cautious” buying of urea during 2Q: Fertiglobe said nitrogen prices took a hit during the period due to “delayed demand, cautious buying behavior and reduced urea imports from India, partially offset by some supply disruptions towards the end of the quarter.” The impact came despite a rise in natural gas prices and constant grain prices during the period.
For the year to date: The company’s net income fell 33.7% to USD 197 mn y-o-y during H12024, while revenues were down 16.7% y-o-y during the period to USD 1 bn.
A busy 2Q for Fertiglobe: Some key achievements during the quarter include reaching a final investment decision on a low-carbon ammonia project in the UAE with Ta’ziz — a joint venture between Adnoc and ADQ — and Korea’s GS Energy Corporation and Japan’s Mitsui & Co. Fertiglobe said it awarded the project’s construction contract to Italian engineering group Tecnimont with production slated to begin in 2027. It also helped deliver with Adnoc the world’s first ever certified bulk commercial shipment of low-carbon ammonia using carbon capture and storage to Mitsui.
And that’s not all: Fertiglobe also secured a EUR 397 offtake agreemen t from the German government’s first-of-its-kind H2Global program to supply green ammonia to the EU from its Egyptian facilities between 2027 and 2033 following an auction. Fertiglobe said such an agreement would help it and the consortium behind Egypt Green Hydrogen reach a FID on Africa’s first integrated green hydrogen plant by H1 2025. The project is also the first of such outside of Europe.
What to expect later this year: The company said regulatory approvals for Adnoc’s acquisition of OCI Global’s 50% stake in the company was “progressing well,” expecting the acquisition to close this year, according to the release.
The outlook for the market: “The short-term outlook for ammonia and urea is favorable, driven by tight markets, while the medium to long-term outlook continues to be supported by improving demand from new and existing applications coupled with limited supply additions,” Fertiglobe said. The company expects to benefit from a slowdown in Chinese agricultural fertilizer exports as China limits exports to meet growing domestic demand, CEO Ahmed El Hoshy told The National. At the same time, there has been a surge in global urea production and demand on the back of increased gas supplies, cultivating “a perfect storm” for Fertiglobe, El Hoshy added.
