The three months ended September 30th 2023 saw improved demand, notably in the Agro Segment and, to a degree, in the Chemicals Segment, especially relative to the prior quarter. This led to an increase in production volumes and a decrease in fertilizer inventories. However, most Grupa Azoty products were offered at prices that were lower than those from the previous year by an average of 52%. The Group estimates to have generated consolidated revenue of PLN 3,075m, EBITDA of PLN -348m, and an EBITDA margin of -11.3%.

The Grupa Azoty Group has released estimates of production volumes for September 2023, showing that production at the Grupa Azoty Group companies is steadily growing in line with rising demand for fertilizers. According to estimates, in September the Group companies produced 64,000 tonnes of compound fertilizers, compared to 54,000 tonnes in August. In the case of specialty fertilizers, the output for September is estimated at 15,000 tonnes, compared with 9,000 tonnes in August. The drop in estimated production of nitrogen fertilizers, from 251,000 tonnes in August to 227,000 tonnes in September, was mainly a consequence of an emergency shutdown at Grupa Azoty ZAK, which the company announced on September 5th.

Grupa Azoty Group’s financial results for the second quarter of 2023 are in line with the estimates presented on September 18th 2023. In the three months ended June 30th 2023, the Grupa Azoty Group generated consolidated revenue of PLN 3,491m, EBITDA of PLN -608m, and an EBITDA margin of -17.4%. As highlighted in the press release regarding estimated results, the reporting period witnessed the convergence of adverse market factors impacting all producers in the European fertilizer and chemical industry. Those adverse developments arose as a consequence of Russia’s aggression against Ukraine and the European Union’s decision to suspend tariffs on imports of urea and ammonia from countries outside the EU.

In the three months ended June 30th 2023, the Grupa Azoty Group generated consolidated revenue of PLN 3,491m, EBITDA of PLN -608m, and an EBITDA margin of -17.4%. During the period, the Grupa Azoty Group and other European producers faced macroeconomic headwinds due to Russia’s aggression against Ukraine, leading to reduced demand in the markets for the Group companies’ products and their downstream markets. Based on the production volume estimates published by the Grupa Azoty Group since the beginning of this year, we have observed an upward trend in fertilizer demand since the third quarter. If the trend continues, it is expected to have a positive impact on the Group’s financial results in 2023.

The ORLEN Group is analysing a possible acquisition of Zakłady Azotowe  Puławy owned by Grupa Azoty S.A. The companies have signed a cooperation agreement  and a non-disclosure agreement enabling due diligence to start at the Puławy-based company. The merger would increase the ORLEN Group’s participation in the fertilizer sector and enhance its efficiency and competitiveness on the European market through numerous synergies. For farmers and other customers of the two companies, the merger would mean a better and broader range of fertilizer products  and easier access to products in demand at a given time, achieved through enhanced production flexibility.

In view of price change on the European gas market in the last weeks of May and the demand forecasts, Grupa Azoty Group companies are raising their production levels.