Uralkali yields profit, promises half to shareholders
The bottom line compares with 1H 2010 net profit of $452 billion, with Adjusted EBITDA rising to $1.053 billion from $662 million year on year, on the back of revenue increase to $1.973 billion from $1.266 billion in 1H 2010.
Vladislav Baumgertner, Uralkali CEO, was upbeat about the results, saying that the company focus on production efficiency and growth of production capacity had resulted in overwhelming financial performance
“Uralkali's operational and financial performance in H1 2011 has been very strong. The combined company continues to be among the most cost efficient potash producers in the world with an excellent pipeline of brown- and green-field development projects. The rising demand for potash allowed Uralkali to utilize its production capacities at almost 100%.” said Baumgertner.
The company mentioned that the merger of the two Russian potash producers, Uralkali and Silvinit, expected to bring a synergy effect resulting in growth of efficiency and production volumes
“The combination is expected to yield significant synergy potential including optimization of operational and transportation activities, lowering commercial and administrative expenses and complex development of the resource base for the organic growth of the company. The annual cost-saving synergy will amount to about $100 million starting from 2013. Uralkali production capacity now totals 11.5 million tonnes of potassium chloride per annum. Uralkali plans to further strengthen its position as a leading potash producer through its sustainable growth strategy, with further plans to reach 13 million tonnes of potassium chloride per annum,” the statement reads
Baumgertner added that the company approved new dividend policy regulations, relying on strong business sustainability and a forecast of reduced asset expenditure.
“We predict a significant growth of cash-flow in Uralkali in the next few years due to favorable market situation and our increasing production capacities. At the same time the long-term strategy of the company is one of the most efficient in the potash industry in terms of cost of new capacities. That is why it will not require significant financial investment. Taking this into account, the Board of Directors resolved to pay out the shareholders at least 50% of the net profit as dividends for maintaining the optimal capital structure,” Baumgertner said.