Reuters
By Aziz El Yaakoubi
The world’s largest phosphate exporter, Morocco’s Office Cherifien de Phosphate (OCP), reported a 23.2 percent fall in first-half net profit on Friday to 3.07 billion dirhams ($317 million) due to low prices.
OCP said the price of phosphate fertilizers had fallen after strong Chinese exports last year left importers with enough stocks at the start of 2016.
Chinese exports fell 31 percent, or 1.9 million tonnes, in the first half of 2016 compared with the same period in 2015, but that was still higher than in 2014, OCP said.
The company said first-half revenue fell to 21.65 billion dirhams from 24 billion a year earlier and that the profit decline was partly mitigated by a drop in the price of sulphur and ammonia, which both are used to make fertilizers.
“OCP has been able to maintain a very good profitability level with an EBITDA margin of 27 percent,” OCP said in an email sent to Reuters, referring to earnings before interest, tax, depreciation and amortisation.
State-run OCP, a major earner of foreign currency for Morocco, has been raising output to help offset the slide in prices and is planning to produce 47 million tonnes of crude phosphate rock in 2017 up from about 34 million in 2014.
It is also targeting an increase in fertiliser production to 12 million tonnes by 2017 from 7 million in 2014, which would make it the world’s leading producer.
OCP raised $1 billion via an international bond last year, following on from its debut international bond in 2014 which raised $1.55 billion to finance investment and a series of acquisitions.
In 2014, OCP agreed to buy U.S.-based Bunge’s 50 percent stake in their Moroccan fertiliser joint venture Bunge Maroc Phosphore S.A. for an undisclosed amount.
It has also signed an agreement to buy a 10 percent stake in Brazil-based company Fertilizantes Heringer S.A for 145 million Brazilian real ($38 million).
($1 = 9.6880 Moroccan dirham)
(Editing by Susan Thomas and David Clarke)
