URALCHEM, OJSC Reports IFRS Financial Results for the First Quarter of 2014

URALCHEM, OJSC, the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen fertilizers in Russia, announced its IFRS financial results for the first quarter of 2014.

URALCHEM

Moscow, Russia (May 30, 2014)

• Revenue decreased to 19.4 bln RUB, compared to 20.8 bln RUB in January-March 2013.
• Operating profit amounted to 5.3 bln RUB, compared with 6.7 bln RUB in January-March 2013.
• Adjusted EBITDA comprised 6.2 bln RUB, compared to 7.6 bln RUB in January-March 2013.
• Adjusted EBITDA margin amounted to 32%, compared to 37% in January-March 2013.

URALCHEM, OJSC (hereinafter URALCHEM or the Company), the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen fertilizers in Russia, announced its IFRS financial results for the first quarter of 2014.

Revenue for the first quarter of 2014 decreased by 7% to 19.4 bln RUB, compared to 20.8 bln RUB in January – March, 2013. Operating profit amounted to 5.3 bln RUB (23% of revenue) compared with the operating profit of 6.7 bln RUB (32% of revenue) in the first quarter of 2013.

Adjusted EBITDA comprised 6.2 bln RUB, compared to 7.6 bln RUB, a decrease of 18%. The adjusted EBITDA margin for the first quarter of 2014 amounted to 32% of revenue, compared with 37% of revenue for the first quarter of 2013.

The negative net profit is the result of so-called paper losses. The bulk of the company’s debt is denominated in dollars, and following the sharp rise in the foreign exchange rate in the first quarter of 2014, the company has recognized a foreign exchange loss from financing activities to the amount of 13.56 billion roubles in the reporting period. Of this amount, 13 billion roubles is the exchange difference on the loans, on which there have been no real cash flows. Sharp fluctuations in exchange rates have a significant effect on the net income indicator. For example, movement of the dollar exchange rate in the opposite direction in April and May provided for positive exchange rate differences on the same loans to the total of about 6.5 billion roubles.

In addition, the financial result from operations includes foreign exchange loss in the amount of 957 million roubles arising on intercompany liability, while the corresponding gain is reflected directly in the statement of changes in equity. If these exchange differences were netted off, EBITDA could reach 7.15 billion roubles and its margin would be 37%.

Thus, against the background of declining global prices for major fertilizers, in the first quarter of 2014, URALCHEM showed the sustainability of its business model. Whilst its financial performance was lower in absolute terms, the company has maintained high margins (profitability) and continued to generate a stable positive cash flow. In response to market trends, the company has increased production and sales of key products, ammonium nitrate and its derivatives, as well as continued its efforts to improve the efficiency of business processes, to increase productivity and profitability and to reduce operating costs.

Markets

The first quarter is traditionally a period of significant market activity and prices are being supported by strong demand in premium markets, the US and Europe. However, despite the rise in prices in the first half of the quarter, the average values of quotes were lower than in the first quarter of 2013. In the second and third quarters of 2014 the market expects oversupply associated with the start of Chinese exports. The main demand during the period is expected from South Asia and Latin America, ie regions in which the price is traditionally low. The volume of demand is assessed as insufficient to absorb all available supplies from China and the Middle East. As a result of the oversupply, price cuts will inevitably lead to a halt in production in regions with high costs, including Europe and the CIS.

In January, the activity in ammonia markets stayed low. Quotes based on FOB Yuzhnyi Port remained around 410 to 430 dollars/tonne. In February, prices for ammonia in the ports of the CIS began to rise, which continued until the end of the quarter. Gazprom’s announcement about cancellation of discounts on natural gas prices increased interest in purchasing in the Yuzhnyi Port; the lack of available supplies in Trinidad heightened interest of US importers in purchasing in the CIS. The main growth in demand was due to the start of direct application of ammonia and increased requirements for raw materials from producers of phosphate fertilizers. In March, prices reached 474 dollars/tonne. However, in general, for the quarter the prices amounted to 438 dollars/tonne, which is 22.2 % lower than a year before.

The greatest activity for urea during the quarter was shown in US, Europe and Brazil. The US entered the purchasing season with low stocks. In January, prices in the US rose by 21% and the rapid rise in prices in the United States resulted in an increase in prices in the major sources of shipment: in the Port of Yuzhnyi by 15%, in Egypt also by 15%, in the Middle East by 16%. Prices were also supported by a lack of free product in North Africa and the Middle East. However, beginning with the last week of January, the market trend changed. The devaluation of the Turkish lira and the Brazilian real impeded imports from these countries and by the end of the quarter, prices returned to January levels. The average quotes for urea FOB Baltics in March totalled 314 dollars/tonne. The average urea price for the quarter was $330/tonne, which is 14.3 % lower than a year before.

January and February marked steady growth of quotations for ammonium nitrate caused by deficiency of the product available for export, due to the supply to the Russian domestic market. FOB Baltics quotes grew from $300/tonne up to $320/tonne. But from the beginning of March there was change in the trend due to lower domestic demand. In general, during the first quarter of 2014 quotes amounted to $308/tonne, which is 8.6% lower than a year before.

In the segment of phosphate fertilizers (MAP/DAP) average quotations (FOB Black Sea) for the first quarter of 2014 amounted to $469 dollars/tonne, which is 6% lower than a year before. Since mid-March, demand in this segment declined markedly; importers, relying on high inventories, put off new purchases in anticipation of more lucrative offers. In the second quarter, market participants expect lower prices.

Financial Situation

Cash generated from operating activities in the first quarter of 2014 amounted to 5.6 bln RUB, compared to 5.06 bln RUB in the first quarter of 2013.

As at 31 March 2014, the Company’s net debt amounted to 163.11 bln RUB. The debt burden increased after the Company received a loan from VTB Capital to finance the purchase of 19.99% of shares in OJSC “Uralkali”, which as at 31 March 2014 amounted to 146,01 bln RUB

For more information, please visit the Company web site http://www.uralchem.com or use the following contact information:

Public Relations Department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
Email: pr@uralchem.com
Web: http://www.uralchem.com

URALCHEM, OJSC is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.8 million tonnes of ammonia, 2.5 million tonnes of ammonium nitrate, 1.2 million tonnes of urea and 0.8 million tonnes of phosphate and compound fertilizers per year. URALCHEM, OJSC ranks first in Russia for production of ammonia and ammonium nitrate, and second for the production of urea. Key production assets of URALCHEM, OJSC include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk, Moscow region.

URALCHEM, OJSC Reports IFRS Financial Results for the Year 2013

Revenue for 2013 reached 72.15 bln RUB, operating profit amounted to 16.5 bln RUB. Against the background of adverse market developments, the company managed to strengthen its leadership in the nitrogen segment, by showing an increase in production and sales of key products.

URALCHEM

Moscow, Russia (April 24, 2014)

• Revenue decreased to 72.15 bln RUB, compared to 75.33 bln RUB in 2012.
• Operating profit amounted to 16.5 bln RUB, compared with 22.73 bln RUB in 2012.
• Adjusted EBITDA comprised 20.12 bln RUB, compared to 25.99 bln RUB in 2012.

URALCHEM, OJSC (hereinafter URALCHEM or the Company), the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its audited IFRS financial results for the year 2013.

Dmitry Konyaev, CEO of URALCHEM, OJSC, commented on the Company’s results for the year 2013, “2013 proved to be a difficult year for fertilizer manufacturers. The decline in world prices affected the financial results of all the major players in the industry and URALCHEM was no exception. Against the background of adverse market developments, we worked actively to improve the efficiency of business processes, to increase productivity, profitability and to reduce operating costs. We managed to strengthen our leadership in the nitrogen segment, by showing an increase in production and sales of key products. Thanks to its chosen strategy, URALCHEM has continued to maintain a leading position among Russian producers in terms of margins, with the EBITDA margin at 28% in 2013.”

Financial Results

Revenue for 2013 decreased by 4% to 72.15 bln RUB, compared to 73.33 bln RUB in 2012. Operating profit amounted to 16.5 bln RUB (23% of revenue) compared with the operating profit of 22.73 bln RUB (30% of revenue) in 2012.

Adjusted EBITDA reached 20.12 bln RUB, compared to 25.99 bln RUB in 2012, a decrease of 23%.

The adjusted EBITDA margin for 2013 comprised 28% of revenue, compared with 34% of revenue for 2012.

Markets

In 2013, the global fertilizer market was affected by a number of unfavourable factors. Among them were the reduction of fertilizer subsidies in India and the depreciation of regional currencies in the countries of South and Southeast Asia, the leading importers of mineral fertilizers. During the year Thai baht and Indian rupee lost 10% against the US dollar. On the Brazilian and Turkish markets (traditionally important for the Russian fertilizer exports), the real and the lira decreased by 15% and 19% against the US dollar, respectively. Restructuring of potash sales and a deficiency of natural gas for the nitrogen sector in Egypt, South-East and South Asia, and Latin America also added to the uncertainty.

As a result, continuing high demand for fertilizers under worsening general macroeconomic conditions was not supported by solvency of the major importers. This was reflected in falling prices of the major fertilizers and created the prerequisites for a general decline in prices in the short and medium terms. China’s increasing role as a supplier of fertilizers, coupled with the expectation that the country’s costs will remain stable (or even reduce slightly) will significantly constrain other producers’ opportunities to increase prices, even seasonally. The US move away from the import of nitrogen products to domestic production will increase competition in other regions and will also put additional pressure on prices.

The price of ammonia FOB Yuzhny Port during 2013 decreased from US $600 per tonne in January to US $385 to US $425 per tonne in December. The main factors influencing the negative trend in world prices for ammonia were: a drop in demand from Indian manufacturers of fertilizers, moderate demand from industrialized countries in Asia, the weakening of phosphate fertilizer market and lower prices for urea. During the same period, ammonia deficit increased in the countries of Southeast Asia, Europe and Latin America, which gave rise to the need for additional purchases of fertilizers from other regions. Also in 2013, industrial demand for ammonia remained high.

The price of urea FOB Yuzhny Port decreased by 24% during the reporting period to US $312 per tonne compared with US $408 per tonne in 2012. The most significant factor in the reduction in prices was the rise of China in the export markets, while the cost of production of urea in China significantly decreased due to the decrease in coal prices.

Steady growth of quotations of ammonium nitrate at the beginning of the year was replaced by a fall in mid-March. In late May prices stabilized, helped by repair works at plants in the CIS. By the end of the 2nd quarter, prices in the CIS received support from the industrial segment. Since the end of September, prices for ammonium nitrate started to restore due to the reduction of exports from Ukraine and the early-season purchases in the domestic markets of the CIS. During 2013 quotes for ammonium nitrate averaged $287 tonne, which was 6% lower than a year earlier (FOB Baltic).

In the phosphate fertilizers segment there was global decline in prices due to a lack of current demand. The main factor for the price reduction was a sharp drop in import demand in India due to the accumulation of significant reserves of phosphate and compound fertilizers in the country. Increased stocks were the result of low phosphorus usage in 2012 due to the drought that hit the country during the application season. Also, a significant reduction in imports was brought about by lower government subsidies and depreciation of the rupee against the dollar. At the same time, on the expectation of falling prices, importers in other regions adopted a policy of procurement to meet current needs only. The price of phosphate fertilizers on the basis of FOB Tampa averaged US $443 per tonne in 2013, which was 17.4 % lower than in 2012.

Financial Situation

Cash generated from operating activities in 2013 amounted to 14.47 bln RUB, compared to 20.63 bln RUB in 2012.

As at 31 December 2013, the Company’s net debt amounted to 148.997 bln RUB. The increased size of the debt is largely due to a loan of 126.27 bln RUB which the Company obtained from VTB Capital to finance the purchase of 19.99% of shares in OJSC “Uralkali” in December 2013.

The Company’s US dollar-denominated loan portfolio amounts to more than 140.89 bln RUB. The weighted average interest rate of the loan portfolio in dollars equals 3.7% annually.

For more information, please visit the Company web site http://www.uralchem.com or use the following contact information:

Public Relations Department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
Email: pr@uralchem.com
Web: http://www.uralchem.com

URALCHEM, OJSC is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.8 million tonnes of ammonia, 2.5 million tonnes of ammonium nitrate, 1.2 million tonnes of urea and 0.8 million tonnes of phosphate and compound fertilizers per year. URALCHEM, OJSC ranks first in Russia for production of ammonia and ammonium nitrate, and second for the production of urea. Key production assets of URALCHEM, OJSC include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk, Moscow region.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of URALCHEM. We wish to caution you that these statements are only predictions. We do not intend to update these statements and our actual results may differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, financial risk management and the impact of general business and global economic conditions.

URALCHEM, OJSC Reports IFRS Financial Results for the First Nine Months of 2013

Despite the difficult market conditions, the company maintained its revenues at the level of 2012. Thanks to its chosen strategy, URALCHEM has continued to maintain a leading position in the industry in terms of margins, with the EBITDA margin at 32%.

URALCHEM

Moscow, Russia (December 11, 2013)

– Revenue increased to 56.26 bln RUB, compared to 55.96 bln RUB in the first nine months of 2012.
– Operating profit amounted to 14.63 bln RUB, compared with 17.09 bln RUB in the first nine months of 2012.
– Adjusted EBITDA comprised 17.32 bln RUB, compared to 19.55 bln RUB in the first nine months of 2012.

URALCHEM, OJSC (hereinafter URALCHEM Holding or the Company), the Russian holding company of the URALCHEM Group, one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first nine months of 2013*.

Dmitry Konyaev, CEO of URALCHEM, OJSC, commented on the Company’s results for the first nine months of 2013, “In the second half of 2013 the global market situation took a downward turn for fertilizer producers. Despite the difficult market conditions, URALCHEM maintained its revenues at the level of 2012. The Company is one of the leaders in the nitrogen segment in terms of output of ammonia per production unit. It is actively upgrading facilities, seeking to reduce costs and developing production of high-margin niche products. Thanks to its chosen strategy, URALCHEM has continued to maintain a leading position in terms of margins, with the EBITDA margin at 32%. The Company has maintained its financial stability together with its ability to develop strategic operations, as confirmed, among other things, by successive improvements of loan terms provided by banks.”

Financial Results

Revenue for the first nine months of 2013 grew to 56.26 bln RUB, compared to 55.96 bln RUB in the first nine months of 2012. Operating profit amounted 14.63 bln RUB, or 27% of revenue, compared with the operating profit of 17.09 bln RUB, or 32% of revenue, in the first nine months of 2012.

During the first nine months of 2013, adjusted EBITDA reached 17.32 bln RUB, compared to 19.78 bln RUB in the first nine months of 2012, a decrease of 12%.

The adjusted EBITDA margin for the first nine months of 2013 comprised 32% of revenue compared with 37% of revenue for the same period in 2012.

Markets

From the beginning of the year, there was a decrease in demand for ammonia from the industrial segment in East Asia and the producers of phosphate fertilizers in India and North Africa. Demand in the US decreased because of the late start of planting. Partially the market was offset by the decrease in production in Egypt, Trinidad and Saudi Arabia. Recovery began in early August. There was a decline in exports from Ukrainian enterprises, and on the other hand, lower prices provided for growing interest in procurement. Average quotes for ammonia in January-September 2013 amounted to $498 / ton, which is only 4% lower than in the same period in 2012 (FOB Yuzhny Port).

In early 2013, high seasonal demand in Europe and the United States, limited supply from Egypt, and low initial stock in the European market resulted in increased prices for urea. However, in mid-February, prices began to decline, reducing further until the end of the first half of the year. Importing countries were postponing purchases in anticipation of lower prices, while Chinese exporters were actively accumulating stock expecting the “export window”. In the 2nd quarter there was a decrease in production in regions with high costs, namely in Romania and Ukraine. Amid rising purchases from India, Turkey and Latin America, there was a short period of stabilization in June. However, after then, prices continued to decline because of massive Chinese exports. Average quotes for urea in January-September 2013 amounted to $339 / ton, which is 17% lower than in the same period a year earlier (FOB The Baltic Sea).

Steady growth in quotations for ammonium nitrate at the beginning of the year was replaced by a fall in mid-March. In late May, prices stabilized, helped by turnarounds at factories in the CIS. By the end of the 2nd quarter, prices in the CIS received support from the industrial segment. During January-September 2013 quotes for ammonium nitrate averaged $291 / ton, which is 4.6 % lower than a year earlier (FOB, The Baltic Sea). Starting from late September, prices for ammonium nitrate began to recover due to reduced exports from Ukraine, as well as to the beginning of the purchase season in the domestic market of the CIS.

In the phosphate fertilizers segment there was a global decline in prices due to a lack of current demand. The main reason came from India, where high levels of stock, reduction of state subsidies and depreciation of the rupee against the dollar led to a significant reduction in imports. Importers in other regions changed their procurement tactics to just satisfy the current demand, playing on the falling market. Average DAP/MAP quotes for the three quarters of 2013 fell by 14.7 % compared with the previous year, reaching $481 / ton (FOB, The Baltic Sea). Low market activity is expected until the end of the year and in the first quarter of 2014.

Financial Situation

Cash generated from operating activities in the first nine months of 2013 amounted to 13.14 bln RUB, compared to 14.71 bln RUB in the same period of 2012.

As at 30 September 2013, the Company’s net debt amounted to 23.531 bln RUB. The weighted average interest rate of the loan portfolio in the first nine months of 2013 equalled 4.5% annually compared to 5.8% annually during the same period in 2012.

For more information, please visit the Company web site http://www.uralchem.com or use the following contact information:

Public Relations Department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
Email: pr@uralchem.com
Web: http://www.uralchem.com

URALCHEM is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tonnes of ammonium nitrate, 2.2 million tonnes of ammonia, 0.8 million tonnes of MAP and DAP, 0.8 million tonnes of complex fertilizers and 0.5 million tonnes of urea. URALCHEM is the second largest ammonium nitrate producer in the world and number one in Russia. URALCHEM’s key production assets include Kirovo-Chepetsk Chemical Works, OJSC in Kirovo-Chepetsk, Kirov region; Azot, OJSC in Berezniki, Perm region; Voskresensk Mineral Fertilizers, OJSC in Voskresensk, Moscow region.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of URALCHEM. We wish to caution you that these statements are only predictions. We do not intend to update these statements and our actual results may differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, financial risk management and the impact of general business and global economic conditions.

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Six Months of 2013

URALCHEM HOLDING P.L.C. (hereinafter URALCHEM Holding or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter the Group), one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first six months of 2013.

URALCHEM

Moscow, Russia (August 19, 2013)

– Revenue increased to US $1,292 million, compared to US $1,261 million in H1 2012.
– Operating profit amounted to US $394 million, compared with US $410 million in H1 2012.
– Adjusted EBITDA comprised US $452 million, compared to US $462 million in H1 2012.
– Net profit amounted to US $253 million, compared with US $444 million in H1 2012*.

URALCHEM HOLDING P.L.C. (hereinafter URALCHEM Holding or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter the Group), one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first six months of 2013.

Dmitry Konyaev, CEO of URALCHEM, OJSC (the Russian holding company of the Group), commented on the Company’s results in the first half of 2013, “The overall global market situation has been less favourable for fertilizer producers in 2013 compared to last year. This trend is very likely to continue in the second half of this year. Along with the continuing rise in the cost of raw materials, this situation creates conditions for the further decline in the financial performance of the leading manufacturers of mineral fertilizers. Thanks to its strategy, URALCHEM is continuing to hold a leading position in a number of financial and operational indicators. In the first half of 2013, URALCHEM maintained its sales volume at the level of the first half of 2012 and increased revenues by 2%. In addition, as a result of early repayment of loans to the amount of US $300 million we were able to reduce the Company’s debt to a record low of US $787 million, as well as to withdraw from collateral all of the Group’s property. Net debt currently amounts to US $676 million”.

Financial Results

Revenue for the first six months of 2013 grew to US $1,292 million, compared to US $1,261 million last year. Operating profit amounted to US $394 million, or 31% of the revenue, compared with the operating profit of US $410 million, or 32% of the revenue, in the first half of 2012. Net profit amounted to US $253 million, compared to US $444 million in the first six months of 2012.

During the first half of 2013, adjusted EBITDA reached US $452 million, compared to US $462 million in the first half of the year before, a decrease by 2%. The adjusted EBITDA margin for the first six months of 2013 comprised 35% of revenue compared with 37% of revenue for the same period in 2012.

The main difference in the dynamics of the net profit compared to the other results is due to the fact that the results in 2012 included the revaluation of the Company’s share in Minudobrenia, Perm.

Markets

During the first half of the year, the price of ammonia was declining. The main factor determining the price dynamics was the lack of demand in the agricultural and the industrial segments. Lower demand in the agricultural segment was due to the late start of the sowing season in the Northern Hemisphere. Lack of demand in the industrial segment was caused by reduced production of phosphate fertilizers in North Africa and India.

Urea prices showed significant growth in the beginning of the year due to active procurement in Europe and North America, which coincided with a limited supply of product from Egypt, forcing buyers to look for alternative sources. However, from mid-February to the end of June prices have been decreasing, mainly due to lack of demand. In Europe and the US slowdown in demand was attributed to the late start of the sowing season. Latin American importers were putting off purchases, monitoring the changes in the situation. Additional pressure on prices was created by the accumulation of large stocks of products at Chinese ports, in anticipation of the period of low export duties, which began on 1 July.

During January and February there was a steady growth of quotations for ammonium nitrate. In mid-March, due to the pressure from urea prices, the trend changed. By mid-May, prices for ammonium nitrate decreased by $100/t, compared with the maximum prices registered in the middle of the first quarter. At the end of May, prices stabilized with repair works carried out at that time at CIS plants being one of the factors that contributed to this stabilization. By the end of the second quarter, prices in the CIS were supported by the industrial segment.

Until the middle of the first quarter, global decline in prices for phosphate fertilizers continued due to the lack of current demand. The decrease of production by major suppliers together with increased demand in Latin America stabilized prices. At the same time, Latin America remained the single largest source of demand. Indian buyers refrained from transactions. Since the beginning of the second quarter the decline was caused by the reduction of subsidies in India, the delays of purchases in the US domestic market due to the weather conditions, devaluation of currencies of major importing countries, such as Brazil and India, and policy of procurements to the current needs adopted by importers in other regions lead to oversupply in market and decrease in prices.

Production and sales

Volume of production by the Group’s plants increased by 1%, sales of commercial products of the Group remained virtually unchanged.

Financial Situation

Cash generated from operating activities in the first half of 2013 amounted to US $320 million, compared to US $342 million in the same period of 2012.

As at 30 June 2013, the Company’s net debt amounted to US $676 million. The weighted average interest rate of the loan portfolio in the first six months of 2013 equalled 4.7% annually compared to 5.2% annually during the same period in 2012.

For more information, please visit the Company web site http://www.uralchem.com or use the following contact information:

PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com

URALCHEM HOLDING P.L.C. is a holding company of the URALCHEM Group, which includes four fertilizer manufacturing facilities in Russia. URALCHEM Group is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tons of ammonium nitrate, 2.8 million tons of ammonia, 0.8 million tons of MAP and DAP, 0.8 million tons of complex fertilizers and 1.2 million tons of urea per year. URALCHEM Group is the second largest ammonium nitrate producer in the world and number one in Russia, the second largest producer of nitrogen fertilizers in Russia. URALCHEM Group’s key production assets include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilizers, OJSC in Voskresensk, Moscow region.

URALCHEM HOLDING P.L.C. Reports IFRS Financial Results for the First Quarter of 2013

URALCHEM

URALCHEM HOLDING P.L.C., a Cypriot holding company of the URALCHEM Group, one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first quarter of 2013.

Moscow, Russia (May 29, 2013)

– Revenue increased to US $683 million, compared to US $673 million in Q1 2012.
– Operating profit increased to US $220 million, compared with US $178 million in Q1 2012.
– Adjusted EBITDA grew to US $250 million, compared to US $207 million in Q1 2012.
– Net profit amounted to US $161 million, compared with US $354 million in Q1 2012*.

URALCHEM HOLDING P.L.C. (hereinafter URALCHEM Holding or the Company), a Cypriot holding company of the URALCHEM Group (hereinafter the Group), one of the largest producers of nitrogen and phosphate fertilizers in Russia, announced its unaudited IFRS financial results for the first quarter of 2013.

Dmitry Konyaev, CEO of URALCHEM, OJSC (the Russian holding company of the Group), commented on the results, “In the first quarter of this year, URALCHEM increased its revenues and the adjusted EBITDA grew substantially. This shows how effectively the Company is working. URALCHEM is still focusing on production of high-margin products demanded by the market. The first three months of 2013 showed the sort of results which we had anticipated. This is a positive testament to our strategy of strengthening our position in the nitrogen segment.”

Financial Results

Revenue for the first quarter of 2013 grew to US $683 million, compared to US $673 million in the first quarter of last year. Operating profit amounted to US $220 million, or 32% of the revenue, compared with the operating profit of US $178 million, or 26% of the revenue, in the first quarter of 2012. Net profit for the first quarter of 2013 amounted to US $161 million, compared to US $354 million in the first quarter of 2012.

During the first quarter of 2013, adjusted EBITDA reached US $250 million, compared to US $207 million the year before, a rise of 19%. The adjusted EBITDA margin for the first quarter of 2013 comprised 37% of revenue compared with 31% of revenue for the first quarter of 2012.

Revenue, EBITDA margin and adjusted EBITDA increased during the first quarter of 2013 as compared to the same period in 2012. The difference in the net profit is due to revaluation of the Company’s share in Minudobrenia, Perm carried out in 2012 and foreign exchange differences that showed opposite dynamics in 2013.

Markets

Ammonia
During the quarter, the price of ammonia was slowly declining. The main factor determining the price dynamics was the lack of demand in both the agricultural and the industrial segments. Reduced production of phosphate fertilizers in North Africa and India resulted in lower demand for ammonia in these regions. US demand for ammonia for direct application was satisfied by supplies from Trinidad and from domestic market. The growth of the industrial segment in East Asia appeared to be insufficient to cover spot volumes and the demand was met by contract supplies. Ammonia production in Egypt decreased due to the limitations of gas supplies for nitrogen production, but at the same time, capacities utilization in Trinidad increased to 90%.

Urea
At the beginning of the quarter prices for urea increased rapidly. Quotes for prilled urea in the Black Sea ports showed growth from $375/t FOB in early January to $445/t FOB in mid-February. In the Baltic, the corresponding figures were at $360/t FOB and $430/t FOB. The most significant factor that determined the dynamics of prices at the beginning of the first quarter was the shift of the market balance towards demand.

On the one hand, the early part of the year is traditionally a period of high demand from Europe and the USA, and European importers had low stocks at the start of the purchasing season. On the other hand, restrictions on the supply of gas to nitrogen production facilities in Egypt at the beginning of the year led to a substantial reduction in export supply.

Shortages of supply of Egyptian urea increased the interest of European buyers in products from other countries, including the supply of prilled urea from the CIS. However, from mid-February, there was a reduction in prices, which continued until the end of the quarter. In the ports of CIS, price reduction was associated with the sale of long positions by traders. A decline in prices for ammonium nitrate in Europe produced additional pressure on the price of urea.

Prices continued to decline in March due to lower demand in the US and Europe, caused by the delay in fertilizer application due to adverse weather conditions. Latin American importers, the biggest buyers of Russian urea, switched to purchasing for current needs, focusing on the dynamics of prices. Toward the end of March, supply increased in the Ukrainian ports in connection with the completion of the season in that area.

Ammonium nitrate
Quotes for ammonium nitrate generally followed the trends in the price of urea. During January and February there was a steady growth in the quotations for the product at the ports of the CIS because of the shortage of the product available for export, due to supplies being allocated for domestic use. In mid-March the trend changed markedly due to lower domestic demand.

Phosphate fertilizers
Until mid-February, global decline in prices continued due to the lack of current demand. In February, major suppliers decreased production, which made it possible to stabilize prices. Then, due to increased demand in Latin America, prices started to restore. By the end of March, indicators of export prices in Tampa rose to $515/t FOB against the lowest prices of $465/t – $475/t FOB. Still, Latin America remained the single largest source of demand. Indian buyers refrained from transactions; closed tenders were held, mostly to test price expectations.

Production and sales

In the first quarter of 2013 the fertilizer market was stable and the Group’s products enjoyed strong demand. Volume of production by the Group’s enterprises remained at the level of the first quarter of last year. A significant portion of production output was sold in April 2013 due to adverse weather conditions and late start of the sowing season.

Financial Situation

Cash generated from operating activities in the first quarter of 2013 amounted to US $168 million, compared to US $174 million in the first quarter of 2012.

As at 31 March 2013, the Company’s net debt amounted to US $801 million. The weighted average interest rate of the loan portfolio in the first quarter of 2013 equalled 4.6% annually compared to 5.8% annually during the same period last year.

-Ends-

For more information, please visit the Company web site http://www.uralchem.com or use the following contact information:

PR department
URALCHEM, OJSC
Tel: +7 (495) 721 89 89
E-Mail: pr@uralchem.com

URALCHEM HOLDING P.L.C. is a holding company of the URALCHEM Group, which includes four fertilizer manufacturing facilities in Russia. URALCHEM Group is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tons of ammonium nitrate, 2.8 million tons of ammonia, 0.8 million tons of MAP and DAP, 0.8 million tons of complex fertilizers and 1.2 million tons of urea per year. URALCHEM Group is the second largest ammonium nitrate producer in the world and number one in Russia, the second largest producer of nitrogen fertilizers in Russia. URALCHEM Group’s key production assets include Azot Branch of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm; MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk, Kirov region; Voskresensk Mineral Fertilizers, OJSC in Voskresensk, Moscow region.