Moscow – The Board of Directors of PhosAgro, one of the world’s leading producers of phosphate-based mineral fertilizers, noted a dynamic increase in production in 1H 2024.
As PhosAgro CEO Mikhail Rybnikov mentioned in his report, the Company has been demonstrating robust growth thanks to the consistent implementation of its investment programme, which will see a record of more than RUB 73 billion in allocations this year.
“We made considerable progress in the first half of 2024 in terms of production as well as the implementation of our sales policy. During the period, we increased production of agrochemicals by 3.6% to 5.9 million tonnes. At this pace, we can expect to exceed 11.5 million tonnes of agrochemical production by the end of the year.
“In the first half of the year, we made strides in executing our development strategy for 2025. Central to the strategy are regular upgrades to existing production facilities and the construction of new facilities.
“Projects aimed at increasing the processing of phosphate rock by a total of more than 400 thousand tonnes are ongoing at our Cherepovets and Volkhov facilities. In Cherepovets, we initiated a project to expand the capacity of the aluminium fluoride shop from its current 75 thousand tonnes to 96 thousand tonnes per year. Supplies of aluminium fluoride, which is used as an electrolyte component in the production of aluminium, will increase starting in mid-2026.
“The third stage in the development of our production plant in Balakovo is in progress, focusing on the creation of a flexible system for producing MAP, DAP, NPS and NPK fertilizers and increasing gross production volumes. Next year, production will increase by nearly 1 million tonnes, reaching a total of 3.5 million tonnes of essential fertilizers for Russian farmers. By the end of the year, we expect to begin producing diammonium phosphate at the facility, complete the construction of the phosphogypsum conversion unit and retrofit one of the process systems in the mineral salts shop, boosting monocalcium phosphate output by 53 thousand tonnes per year. The construction of our SK-20/1 sulphuric acid plant is well under way. Set for completion in the second half of 2025, the new plant will increase sulphuric acid production by 750 thousand tonnes per year. In addition, we plan to begin underground mining in the Gakman section of the Kirovsky mine’s Yukspors deposit later this year.
“We continue to increase our investment in human resources, recognizing that protecting our talent pipeline is a long-term priority for the Company. For over 10 years, we have been developing a corporate system for training specialists that begins when they are in school and continues through their employment with us. Over this period, we have invested RUB 6 billion in the development of this system.
“This year, we have elevated our strategic partnership with the Murmansk Arctic University (MAU) to a new level. The goal of our ambitious new project with MAU and federal and regional authorities is to establish the leading school in the country for training mining engineers in Apatity.
“We have already started creating an underground training centre – the first of its kind in Russia – at our Apatit plant. Every year, more than 500 students will undergo practical training there – working with state-of-the-art equipment in realistic underground mining conditions and receiving the most advanced knowledge in the field. The educational infrastructure of the MAU branch in Apatity will also be enhanced: state-of-the-art laboratories and workshops will be established, and comfortable residences and leisure and sports facilities will be developed to enrich student life. New areas of study that are in high demand in the industry will be introduced; the number of students will increase significantly, including the number of state-funded places available, as will the number of teaching staff. The institution is already outstanding. After all, its lecturers include scientists from the Kola Scientific Centre of the Russian Academy of Sciences. Our joint efforts to develop MAU will help ensure that there is a qualified talent pipeline for the mining and processing industry in Russia and the Murmansk region for years to come, while – and this should not be overlooked – also minimizing the outflow of young specialists from the Kola region.”
The Board of Directors reviewed the Company’s financial results for the first half of 2024, including its IFRS interim consolidated financial statements, and recommended that an extraordinary meeting of shareholders approve dividend payments for 1H 2024 in the amount of RUB 117 per ordinary share. The Board recommended setting 22 September 2024 as dividend record date. The extraordinary general meeting of shareholders that will consider the issue will be held on 11 September 2024, by absentee voting.
The Board of Directors heard reports on the work of the Company’s CEO and Management Board in the first half of 2024 and took under advisement information provided by the Chairs of the Company’s Board committees on the work of their respective committees in 2Q 2024. The Board of Directors recognised that its independent members met the independence criteria set out in the Regulation on the Board of Directors of PJSC PhosAgro, the Corporate Governance Code recommended by the Bank of Russia for use by joint-stock companies, the Moscow Exchange Listing Rules and the UK Corporate Governance Code. Work plans for the Board of Directors and its committees for the period to mid-2025 were approved.
In addition, a new version of the Company’s budget for 2024 was approved and recommended for approval by the Management Board. The Board of Directors reviewed a report on the Company’s compliance with legal provisions concerning the protection and handling of insider information for 2023 and 1H 2024, as well as information on the main requirements for persons discharging managerial responsibilities (PDMR) as imposed by Russian and European laws.
Information was taken under advisement on issues pertaining to occupational health and industrial safety within PhosAgro companies, the results of monitoring the Company’s key risk management in 2Q 2024, and the Company’s work on international projects in 2023 and 1H 2024.
The Board of Directors determined the amount of remuneration for the services of the Company’s independent RAS auditor, heard a report on the Company’s work with investors in 2023 and 1H 2024, and approved a report on the work of the Corporate Secretary for the same period.