OCP reports earning for first quarter 2019 earnings

Casablanca, Morocco, May 15, 2019 - OCP S.A. (“OCP” or the “Company”), a global leader in the fertilizer industry, today reported results for the first quarter ended March 31, 2019.

First Quarter 2019 Key Figures

• First quarter revenues reached MAD 12,521 million (US$ 1.31 billion), up from MAD 10,419 million (US$ 1.13 billion) in the same period last year. 
• EBITDA amounted to MAD 4,364 million (US$ 456 million), ahead of MAD 2,516 million (US$ 273 million) in the first quarter of 2018.
• EBITDA margin increased to 35% from 24% in the prior year’s first quarter.
• Capex disbursements amounted to MAD 2,252 million (US$ 236 million).

Operating and financial results

2019 first quarter revenues increased 20% to MAD 12,521 million (US$ 1.31 billion) from MAD 10,419 million (US$ 1.13 billion) in the year-ago period, driven by higher acid and fertilizer volumes and supported by higher rock, acid and fertilizer prices in 1Q- 2019 compared to 1Q 2018, which more than offset slightly lower rock volumes.

Gross margin was up 42% to MAD 9,003 million (US$ 942 million), compared with MAD 6,354 million (US$ 690 million) in the first quarter of 2018, reflecting favourable product mix and higher revenues, while raw material prices were stable for sulfur and lower for ammonia.

OCP’s first quarter EBITDA reached MAD 4,364 million (US$ 456 million), 73% ahead of MAD 2,516 million (US$ 273 million) in the year-ago period, due to higher revenues in the period and greater operating efficiencies. EBITDA margin expanded to 35%, ahead of last year’s 24%.

Consequently, first quarter operating profit was MAD 2,536 million (US$ 265 million) up from MAD 1,158 million (US$ 126 million) in the first quarter of 2018.

Capital expenditures were MAD 2,252 million (US$ 236 million) in the first quarter of 2019, below the MAD 2,912 million (US$ 316 million) expended in the similar 2018 period.

Summary and outlook

Market conditions in the first quarter were in line with the company's expectation of price trends, up from the first quarter of 2018, but down from the end of 2018 tied to high inventories and lower raw materials prices. Demand from India remained somewhat stronger than anticipated despite high inventory levels; European demand recovered from last year’s lows, and there was a modest up-tick in imports to Brazil. Conversely, adverse weather conditions affecting the Spring planting season have kept North American inventories high. On the supply side, as expected, Chinese exports increased year-on-year tied to lower domestic consumption.

OCP’s first quarter revenue growth was broad-based, driven by a combination of higher volumes and improved pricing compared to last year’s first quarter, although prices trended significantly lower on a sequential basis. EBITDA margin continued to benefit from the Company’s industrial flexibility across the value chain, which drove favorable product mix and from its commercial agility that positions OCP as a key global supplier across all major importing continents.

Conference call

In line with OCP’s quarterly communications program, management will not be hosting a conference call to discuss the first quarter 2019 financial results. Regular quarterly conference calls will resume as of the second quarter of 2019. Institutional buyers, bondholders, securities analysts and market makers seeking further clarification on first quarter 2019 results are invited to contact Mrs. Ghita LARAKI, Investor Relations at g.laraki@ocpgroup.ma.

About OCP

OCP is the largest phosphate producer in the world and a leading global fertilizer player, backed by a century of production history. OCP has exclusive access to the world’s largest phosphate rock reserve base. It is one of the lowest cost producers of phosphate rock in the industry and has become a leading player in production and trade volumes across the phosphate value chain. OCP employs approximately 21,000 people and contributes to regional development through its mining and fertilizer operations, and through its sustainability program.

For more information visit: www.ocpgroup.ma