Acron said it was "optimistic" over demand prospects, at a time when its fertilizer inventories have swollen by 27%, as it overcame rising raw material prices to unveil forecast-beating earnings.

The Russian producer of nitrogen-based and compound fertilizers acknowledged a "slight in dip" in prices of nutrients in the latter months of last year, "due to the off-season in most countries".

However, the group said its expectations for the first three months  of 2013 "are optimistic, since current prices on agricultural products are fairly high, stimulating growers in most parts of the world to use more fertilizers while prices remain acceptable".

An uptick in demand would come at a time when the group revealed that the value of its overall inventories had swollen to 11.67bn roubles as off the end of September, up 27% since the start of 2012, although the pace of increase had slowed over the summer, thanks in part to temporary capacity shutdowns.

Inventories were 5.1% higher by value than at the end June.

Fertilizer production in the July-to-September period was, at 1.32m tonnes, 14.4% lower than a year before.

Rising revenues, and costs

Acron unveiled earnings of 5.1bn roubles for the July-to-September quarter, a jump of 41%, boosted by a 2.76bn-rouble gain on foreign exchange transactions.

Earnings before interest, tax, depreciation and amortisation (ebitda) showed slower growth, of 4.9% to 5.27bn roubles, as the benefit of an 11.4% rise to 18.2bn roubles in revenues was in part swallowed up by higher costs.

Acron's costs of goods sold rose 16.9%, as the group swallowed a 15% rise by Russian energy group Gazprom in natural gas prices, with higher wages bills, and start-up costs at a potash mine, also eating into profits.

'Better product mix'

Nonetheless, the results, which beat investors' expectations, were viewed as "strong" by analysts at Moscow-based broker Aton, which restated a "buy" rating on Acron shares.

The improvement in underlying profits, which Aton attributed largely to a "better mix" at Acron in production of its different fertilizer types, "creates certain upside risks to our estimates for fourth-quarter results".

Acron shares stood 0.4% higher at 1,481.9 roubles in afternoon deals in Moscow.