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
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
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
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
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
'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.