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Uralkali back in black for FY'15 with US$184M net profit

PJSC Uralkalireturned to profit in 2015, buoyed by a higher EBITDA margin and a drop in cashcosts, but weaker demand for potash fertilizers and a drop in output weighed onthe company's bottom line.  

The Russian potash producer said April 11 that net profit amountedto US$184 million for the full year, compared to a loss of US$631 million for 2014.

The EBITDA margin climbed to 72% from 64% and the cash cost ofgoods sold was reduced by 30% year over year to US$33 per tonne.

Although Uralkali returned to profit, its net profit was impactedby weaker potash demand and lower prices in key markets, as well as foreign exchangeand fair value losses. 

CEO Dmitry Osipov said 2015 was a challenging year for the potashindustry and a number of factors affected Uralkali's financial results.

"On one hand, the ruble depreciated and cash [cost of goodssold] dropped," he said. "On the other hand, we saw significantly weakerdemand in key markets in the fourth quarter of 2015. However, in the long term,we remain optimistic on potash industry fundamentals."

Revenue was 12% lower on the prior year at US$3.12 billion followinga 9% slump in sales volumes, which totaled 11.2 million tonnes of potassium chloride.EBITDA, meanwhile, was up 7% at US$1.91 billion.

Potassium chloride production in 2015 fell 6% year over yearto 11.4 million tonnes.

Uralkali said global potash demand this year is expected to fallbetween 58 million tonnes and 60 million tonnes depending on macroeconomic environmentand industry related issues.