OCP profit margin holds despite sulfur shock and weaker fertilizer demand

Morocco’s state-owned phosphate giant OCP kept its EBITDA margin broadly stable in the first half of 2026 despite a sharp surge in sulfur prices, weaker fertilizer demand and supply disruptions linked to tensions in the Middle East.

OCP reported revenue of 48.4 billion dirhams ($5.3 billion), down from 52.2 billion dirhams in the first half of 2025. EBITDA, or earnings before interest, taxes, depreciation and amortization, fell to 13.3 billion dirhams from 18.6 billion dirhams a year earlier.

The company said its EBITDA margin remained around 28% in the first half, while the margin stood at 27% in the second quarter, when sulfur prices reached their highest levels.

Sulfur, a key input in phosphate fertilizer production, saw prices roughly triple during the first half as tensions in the Middle East disrupted supplies. Fertilizer prices rose by only about 20%, limiting producers’ ability to pass higher costs on to farmers.

Higher fertilizer prices also contributed to weaker demand, with farmers in major markets delaying purchases. Global phosphate fertilizer trade fell about 22% in the first half, prompting some producers to reduce output or temporarily shut plants, according to OCP.

OCP said the increase in sulfur costs exceeded the decline in its EBITDA, underscoring the impact of the input-price shock.

The company said it mitigated some of the pressure by securing sulfur supplies early, diversifying suppliers and adjusting its fertilizer product mix.

One major shift was a greater focus on triple superphosphate, or TSP, which requires less sulfur and does not require ammonia. TSP accounted for 35% of OCP’s fertilizer exports in the first half, up from 26% a year earlier.

Morocco’s phosphate fertilizer exports declined 16%, less than the 22% contraction in global trade. OCP said this helped increase Morocco’s share of global phosphate fertilizer trade from about 28% to 30%.

OCP’s specialty products business provided another source of growth, with revenue rising 26% to 4.8 billion dirhams as the company expanded sales of products serving the food, industrial and animal-feed sectors.

The company continued to invest heavily in its expansion plans. Capital expenditure reached 16.1 billion dirhams in the first half, compared with 15.2 billion dirhams a year earlier.

OCP said it had adjusted the timing of some projects while maintaining major investment programs focused on fertilizer production, water and energy.

The company ended June with 32.7 billion dirhams in cash. Net financial debt declined to 115.5 billion dirhams from 119.1 billion dirhams at the end of 2025.

OCP also resumed fertilizer shipments to the United States in July after Washington suspended countervailing duties on Moroccan phosphate imports for up to eight months, citing a fertilizer shortage.

The company said it plans to focus during the second half of the year on securing supplies, adjusting production to market conditions and continuing its investment program.