A rocky 2Q for Fertiglobe: Fertiglobe — a UAE-headquartered urea and ammonia exporter and MENA’s largest producer of nitrogen fertilizers — reported a 82% y-o-y decline in adjusted net income attributable to shareholders in 2Q 2023 to USD 79 mn on the back of lower sales volumes and prices, according to its earnings release (pdf). Its revenues were down 62.5% y-o-y in the quarter to USD 551.5 mn.

Some factors to blame: The quarterly results came on the back of lower selling prices due to a continued volatility in European gas costs, the company said. Markets also saw increased supply from capacities commissioned last year, which coincided with the end of the demand season in the northern hemisphere.

Weighing on its 1H: Fertiglobe reported a 73% fall in adjusted net income attributable to shareholders in the first half of the year to USD 219 mn. Its revenues plunged 53.1% y-o-y during the first six months of the year to USD 1.2 bn.

Yet, some positives for the coming months: Fertiglobe said it is expected to begin the front end engineering design (FEED) process for its green hydrogen to ammonia projects in the UAE and Egypt during the second half of 2023. It is also awaiting the final investment decision on the Ta’ziz — a joint venture between Adnoc and ADQ — project to construct a facility to produce some 1 mn tons per annum of low carbon ammonia in the coming months.

And cost optimization on the right track: Fertiglobe said it was still making progress with its cost optimization initiatives to deliver USD 50 mn in annualized rate savings as of the end of 2024. Some 25% to 30% of the run rate savings are to be realized by the end of the year, with the rest realized over 2024.

Looking ahead: “Going into H2 2023, we are well-positioned to service demand emerging from key regions, leveraging our centralized distribution capabilities and targeting demand centers that offer the highest netbacks, further supported by the reinstatement of urea and ammonia import duties into Europe,” Fertiglobe CEO Ahmed El Hoshy said.