2023-11-21 12:00:02
OCP’s results for the first nine months of 2023 were reinforced by the Group’s performance in the third quarter, marking a significant rebound in profitability compared to the second quarter.
At the end of September 2023, the OCP Group reported a turnover of more than 61 billion dirhams. The company reveals a strong rebound in profitability in the third quarter of 2023. Details
OCP has just revealed its results at the end of September 2023. In this sense, the Group’s turnover amounts to more than 61.03 billion dirhams compared to 89.53 billion dirhams during the same period 2022. It appears that The Group’s Ebitda amounted to nearly MAD 17.18 billion compared to MAD 42.96 billion achieved in 2022. For its part, the Ebitda margin stood at 28%. At the same time, investment expenditure amounted to MAD 17.83 billion compared to MAD 15.22 billion made a year earlier. “OCP’s results for the first nine months of 2023 were reinforced by the Group’s performance in the third quarter, marking a significant rebound in profitability compared to the second quarter,” indicates Mostafa Terrab, Chairman and CEO of the Group. And added: “The favorable market conditions that began in August persisted throughout the month of September and continued in the fourth quarter, with a gradual increase in the prices of phosphate products, supported by a strengthening of demand in the main importing regions. The Group’s CEO also underlines that thanks to its competitive advantages, in particular its industrial flexibility, its commercial agility and its leadership in terms of costs, OCP has succeeded in effectively managing its order book with significant purchases.
“The Group was able to take full advantage of the pricing improvement, transforming a 22% sequential increase in revenue in the third quarter into a more than three-fold increase in Ebitda compared to the second quarter of the year. year,” notes Mr. Terrab. And to continue: “Sales of phosphate fertilizers constituted 69% of turnover during the first nine months of 2023, an increase compared to the 65% recorded in 2022. It should be noted that the Group maintained a strong interest in TSP, a very popular fertilizer for fertilizing leguminous crops. The first of three new fertilizer production lines, completed in the second quarter, is currently in the ramp-up phase for the manufacture of TSP.
The two additional lines should be operational in early 2024. This initiative fits perfectly with OCP’s modular approach to expanding its capacities, adapted according to market needs.
Diagnostic
World prices of phosphate fertilizers showed a gradual recovery during the 3rd quarter of 2023 after their decline in the second quarter. This development is mainly due, according to the Group, to the reduction in Chinese exports and the increase in demand in most key markets. “This recovery in demand was mainly supported by low inventory levels and favorable economic conditions for farmers, particularly in the United States, Europe and India. Also, since July, the prices of raw materials have increased, in particular ammonia due to unforeseen outages and the rise in gas prices in Europe,” notes the same source.
As for the drop in the Group’s turnover at the end of September 2023 compared to the same period of last year, it is mainly attributable, according to OCP, to the decline in sales prices in all product categories. compared to the exceptional price levels of 2022.
Meanwhile, fertilizer turnover decreased by 28% compared to the same period of the previous year in local currency, mainly due to the year-on-year decline in fertilizer prices.
This decline was partially mitigated by increased export volumes, driven by increased global demand in OCP’s key export markets, primarily South America and Europe. It also turns out that rock turnover fell by 42% while phosphoric acid turnover fell by 50% compared to the previous year in local currency. As the OCP Group explains, this decline is mainly linked to the drop in prices from one year to the next and the reduction in volumes exported to the main importing regions. Furthermore, OCP export volumes rebounded strongly in the third quarter, making up for part of the postponements in rock and acid sales encountered in the first half of the year. The gross margin amounted to more than 32.18 billion dirhams compared to more than 56.24 billion dirhams recorded a year earlier, mainly impacted by the high costs of stocks of raw materials previously constituted and by the significant accumulation of stocks in 2022 .
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Drop to 2.12% in countervailing duties on imports of Moroccan phosphate fertilizers to the USA
ReactionIn October 2023, the US Department of Commerce made the decision to reduce countervailing duties on imports of Moroccan phosphate fertilizers into the United States to 2.12% from 19.97%. Welcoming this decision, the OCP Group specifies that this new rate came into force from November 2023 until the conclusion of the next administrative review in the fourth quarter of 2024.
“The Department of Commerce (DOC) considered the detailed evidence provided by OCP during DOC’s initial administrative review and verification process. This result reflects OCP’s commitment to fully cooperate with the DOC review and verification process, which resulted in a significant reduction in tariffs,” concludes the same source.
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