Fertiglobe earnings to get a boost from Adnoc funding support
Fertiglobe, the world's largest seaborne exporter of urea and ammonia combined, expects funding support from Adnoc to boost the company's earnings per share, its CEO said.
The company's interest bill will reduce by around $10 million via direct and indirect financing support by Adnoc, adding approximately six per cent to its 2024 earnings per share, driven by refinancing, debt repricing and the benefits of the credit rating upgrades the company received following Adnoc's majority stake acquisition. 'Combined, between the fixed and the interest cost savings, we expect an approximate 13-16 per cent after-tax earnings per share accretion by the end of 2025, in addition to incremental contributions from the announced strategic pillars,' Ahmed El-Hoshy, CEO, Fertiglobe, told Khaleej Times in an interview.
A strong operational performance as well as favourable market conditions for urea and the strategic shipment deferrals from Q4 2024 to Q1 2025 drove Fertiglobe's performance for the first quarter of this year, capitalising on higher prices, as it targets earnings before interest, taxes, depreciation and amortisation (Ebitda) by 2030, El-Hoshy said.
Fertiglobe had a very strong start to the year, with revenues growing 26 per cent and adjusted Ebitda up 45 per cent over the same period last year. Our adjusted attributable profits also increased significantly on a normalised basis to $73 million, up 306 per cent after adjusting for a one-off foreign currency revaluation benefit in Q1 of last year.
'Additionally, supported by the company's ongoing manufacturing improvement plan (MIP), our asset utilisation and energy efficiency levels reached record highs across most plants in Q1 2025, a key reason behind the increase of 7 per cent year-on-year in our own-produced sales volumes,' El-Hoshy said.
Fertiglobe's 'Grow 2030 Strategy' aims to transform the company into a $1 billion+ Ebitda global integrated downstream nitrogen product champion by 2030 via four strategic pillars: operational excellence, customer proximity, nitrogen product expansion and disciplined low-carbon ammonia growth. 'While these pillars are expected to collectively add $340-420 million to Ebitda till 2030 (at unchanged prices), several of the initiatives behind those pillars will start to reflect on our earnings this year,' El-Hoshy said.
Adnoc has provided its full support to integrate and optimise $15-21 million of fixed costs by the end of 2025, leading to a 7-10 per cent earnings-per-share accretion by the end of year. 'In addition, we continue to make progress on our MIP, with gains expected to also continue reflecting on our run rate volumes and earnings. In addition, our recent acquisition of Wengfu Australia, as part of our downstream integration strategy, is expected to be accretive starting this year,' El-Hoshy said.
Fertiglobe has identified four strategic pillars, for growth. 'Pillar one is achieving operational excellence working towards top quartile performance via manufacturing and cost excellence which should unlock $165-175 million of incremental Ebitda, most of it to be achieved by the end of 2027. The second pillar is maximising netbacks and increasing customer proximity, with our Wengfu Australia acquisition being a case in point of our opportunistic and focused approach towards growth, whether organic or inorganic. Separately, we will be looking to expand our nitrogen product portfolio to capture more value and convert ammonia into higher value products, similar to an Automotive Grade Urea (AGU) agreement we signed with DF Group of Spain. And finally, the fourth pillar revolves around low-carbon ammonia and pursuing a disciplined value-led approach capitalising on our existing advantages and the synergies with our majority shareholder's ecosystem,' El-Hoshy said.
The company recently acquired Wengfu Australia's distribution assets.'Wengfu is a leading fertiliser distributor with significant downstream presence in Australia. For us, Australia is a highly attractive market and one of our largest, offering high value and growth in the urea sector. The acquisition also accelerates our expansion across the Asia-Pacific region, which is a key growth market,' El-Hoshy said.
Fertiglobe has been supplying urea to Wengfu for over five years. 'This acquisition secures our position in a strategic premium market and brings us closer to end customers. It aligns with our new strategy of selectively expanding downstream in our key markets. This acquisition can drive additional urea volume growth in Australia and will provide access to a broader customer base, unlock supply chain efficiencies, and support the introduction of enhanced-efficiency and sustainable fertilisers,' El-Hoshy said.
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