Chemical industry giant Fertiglobe, recorded a staggering growth in net profits as rise in selling prices and number of products sold increased revenue, it said in a statement.
Revenues amounted to $1.47 billion in the second quarter, showing a 105 percent rise.
The Abu Dhabi-based company, which is a joint venture between ADNOC and Netherlands’ OCI, also said its free cash flow increased to $789 million in the second quarter from $328 million in the same period last year.
Fertiglobe also announced its first half dividend of $750 million, above the previous guidance of at least $700 million, noting that the increase was due to strong cash flow performance and competitive position on the global cost curve.
These interim dividends are expected to be paid in October, this year.
“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,” Fertiglobe chief executive officer Ahmed El-Hoshy said.
Fertiglobe is the largest producer of nitrogen fertilisers in the MENA region, having sold over 1 billion shares through free float.
The outlook for the fundamentals of nitrogen end markets continues to be underpinned by tight supply, healthy farm economics and low grain stocks globally that incentivise using nitrogen fertilisers, the company said.
“Nitrogen prices have support to remain above historical averages, driven by structurally tight supply over 2022-2026, crop fundamentals supporting demand, and elevated gas prices,” the company said adding “assets are favourably positioned on the global cost curve, and the company is benefitting from a higher global gas price environment.”
In June, the company received 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.
Last year, the company also raised approximately $795 million in its initial public offering (IPO), amid a boom in prices for farming feedstock and other chemicals, making it the third-largest listing on ADX.
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