Fertiglobe (FERTIGLB) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $496 million, down 10% year-over-year; adjusted EBITDA was $156 million, down 29% year-over-year.

• H1 2024 revenues reached $1,048 million, with adjusted EBITDA of $378 million and adjusted net profit of $134 million.

• Own-produced sales volumes in H1 2024 rose 1% year-over-year to 2.8 million tons, despite gas supply disruptions in Egypt.

• Manufacturing Improvement Plan and cost optimization initiatives are progressing, with $42 million in savings realized by June 2024 and a $100 million annual EBITDA uplift targeted by end-2025.

• Major progress on low-carbon ammonia projects, including FID for the TA'ZIZ plant, winning a €397 million H2Global contract, and ADNOC's acquisition of OCI's 50% stake progressing for 2024 closing.

Financial highlights

• Q2 2024 adjusted net income attributable to shareholders was $15 million, down from $84 million in Q2 2023.

• H1 2024 free cash flows totaled $225 million, with free cash flow before growth CapEx at $70 million in Q2 2024.

• Net debt as of June 30, 2024, was $880 million, with net debt/LTM adjusted EBITDA at 1.0x.

• Adjusted EBITDA margin was 31% in Q2 2024 and 36% in H1 2024.

• Maintenance CapEx for Q2 2024 was $16 million; 2024 guidance is $110–130 million.

Outlook and guidance

• Manufacturing Improvement Plan targets $100 million in additional annual EBITDA by end-2025.

• Cost optimization program is 84% complete toward a $50 million run rate target, with full realization expected by year-end.

• Maintenance CapEx guidance for 2024 is $110–130 million; growth CapEx expected below $50 million.

• H1 2024 dividend proposal to be presented to the board in September, with payment expected in October.

• Short- and medium-term outlook for ammonia and urea is favorable due to tight markets and limited supply additions.