PhosAgro - 1Q19 IFRS Results Strong, as Expected
PhosAgro has released its 1Q19 IFRS results, which came in line with our and the consensus expectations. The results were strong, supported primarily by a working capital release. Now, however, phosphate fertilizer spot prices are trading below 1Q average levels and have limited upside in our view. We thus think the 1Q high earnings could be a one-off. At spot fertilizer prices and the current USD/RUB, PhosAgro is trading at a 2019E EV/EBITDA of around 6.2 and leveraged FCF yield of 7-8% (depending on the size of the working capital release this year). A conference call will be held today at 14:30 London/16:30 Moscow time.PhosAgro is a producer of phosphate-based fertilizers. As of Dec 31 2014, Co. had two segments: Phosphate-based products, which includes mainly production and distribution of ammophos, diammoniumphosphate, sodium tripoly phosphate and other phosphate based and complex (NPK) fertilisers on the factories located in Cherepovets, Balakovo and Volkhov, and production and distribution of apatite concentrate extracted from the apatite-nepheline ore, which is mined and processed in Kirovsk; and Nitrogen-based products,which includes mainly production and distribution of ammonia, ammonium nitrate and urea on the factory located in Cherepovets.
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