Fertiglobe (FERTIGLB) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $496 million and adjusted EBITDA $156 million, both down 10% and 29% year-over-year, respectively, due to market volatility and gas supply disruptions in Egypt.

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

• Own-produced sales volumes fell 2% year-over-year in Q2 but rose 1% in H1, supported by record production in Egypt and Algeria despite gas supply disruptions.

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

• Strategic growth projects advanced, including FID on the TA'ZIZ low carbon ammonia plant and winning a €397 million H2Global contract for renewable ammonia supply.

Financial highlights

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

• H1 2024 adjusted net income was $134 million, compared to $219 million in H1 2023.

• Adjusted EBITDA margins were 31% in Q2 and 36% in H1 2024.

• Free cash flow before growth CapEx was $70 million in Q2 and $225 million in H1 2024, up 16% year-over-year in Q2.

• Net debt stood at $880.6 million as of June 30, 2024, with net debt to LTM adjusted EBITDA at 1.0x.

Outlook and guidance

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

• Cost optimization program has achieved $42 million of its $50 million run rate target as of June 2024.

• 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.