Moroccan phosphates giant OCP sold 11.3mn t of finished fertilizers last year, up from 9mn t in 2019, as it expanded output at its Jorf Lasfar facility. But profit dropped to 6.26bn dirhams ($690mn) from Dh6.36bn, reflecting a Dh3bn contribution to Morocco's Covid-19 fund.
Sales pivot towards India, Brazil, away from US
OCP finished fertilizer sales were driven by increased demand from key destinations India and Brazil.
The rise in volumes offset a drop in average finished fertilizer prices. The Argus DAP index, a weighted composite of DAP fob prices from the five largest export markets — the US, Russia, Saudi Arabia, China and Morocco — averaged 92.6 points, down from 101.1 points in 2019 (see chart).
OCP remains positive about 2021, citing strong fundamentals at the start of the year, underpinned by stable supply and rising raw material availability. Prices have risen sharply in the first quarter of this year, with the Argus DAP index hitting 158.5 points last week.
Another favourable monsoon season in India last year underpinned higher sales, with OCP shipping 1.39mn t of DAP in 2020, up from just 105,000t in 2019, Argus' proprietary line-up data show. Indian importers Chambal and IPL received a total of around 800,000t, the data show. Asian markets accounted for 18pc, or 2.04mn t, of OCP's total fertilizer sales last year, up from 10pc a year earlier.
Strong agricultural fundamentals in Brazil also drove OCP's 2020 sales. Latin American markets dominated, accounting for 37pc, or 4.19mn t, in 2020, up from 30pc in 2019. OCP accounted for 40pc of total Brazilian MAP imports, shipping 1.88mn t, up from 1.25mn t in 2019, trade data show.
In the US, the countervailing duties applied to Moroccan phosphates, following US supplier Mosaic's petition in June, hit sales into North America, which accounted for 9pc of sales, down from 21pc in 2019.
Acid sales fall, rock levels up
Phosphoric acid sales dropped to 1.8mn t of P2O5, down from 2mn t a year earlier. OCP attributed the drop to reduced demand from India, where production was hit by the Covid-19 lockdown.
Indian DAP output, for which phosphoric acid is a key feedstock, fell to an 18-month low in April last year, with major firms cutting production. Total Indian DAP production fell by 13pc to 4.12mn t last year.
A drop in acid prices compounded reduced sales volumes, with revenue dropping by 14pc.
OCP increased its phosphate rock sales to 10.3mn t last year, up from 9.5mn t in 2019, but down on 11.2mn t in 2018.
Lower average rock prices last year pushed revenues down by 2pc, but higher volumes to Europe and Latin America partly offset this.
Ebitda margin improves, but profit down
OCP's profit fell to Dh6.26bn last year, pressured by a one-off disbursement of Dh3bn in the second quarter for Morocco's Covid-19 fund.
Earnings before interest, taxation, debt and amortisation (ebitda) increased to Dh18.7bn from Dh15.3bn in 2019. OCP raised its ebitda margin to 33pc from 28pc, citing higher sales and operational efficiencies.
Revenue totalled Dh56.2bn last year, up by 3.9pc, as reported late last month.
