OCP announces MAD 18.2 billion worth of transactions in the first quarter of 2023

The Cherifian Phosphates Office (OCP) group, the main player in the fertilizer industry, achieved a turnover of MAD 18.2 billion in the first quarter of this year, compared to MAD 25.3 billion in the same period last year.

The group said, in its financial results statement that the gross profit before deducting interest, tax and depreciation (EBITDA) amounted to about MAD 4.6 billion, compared to MAD 11.6 billion recorded in the first quarter of last year.

In the first three months of this year, the Moroccan group achieved a volume of investments of about MAD 5.6 billion, compared to about MAD 2.9 billion during the same period last year, representing an increase of 93%.

Lower prices and sizes

The same statement of financial results stated that the first quarter of the current year was characterized by a continued decline in the international prices of phosphate fertilizers, mainly due to the significant decline in the prices of raw materials, such as sulfur and ammonia, as well as the decline in demand in most importing markets, with the exception of Brazil and India.

The “OCP” group stated that despite the possibility of obtaining fertilizers due to their low prices, many markets preferred to delay purchases in the hope of benefiting from additional price reductions.

The decrease in the number of transactions in the first three months of this year resulted from a decline in selling prices and volumes, and the first quarter of 2022 witnessed an exceptional increase in prices, which led to a decrease on an annual basis compared to the first quarter of 2023. And compared to the same period Since 2021, the number of transactions has increased by 28%.

Optimistic and promising forecasts
During the first quarter of the year, the (OCP) group achieved great profitability despite the difficult market environment, which confirms “the strength of its economic model and its competitive advantages represented in its industrial and commercial flexibility and its leadership in terms of cost control,” according to the financial results report.

The group has optimistic and promising expectations for the second half of the current year, given the low stock levels in some areas, in addition to the favorable economic conditions for farmers and the imminent approach of the application season.

These positive factors are expected to mitigate the impact of lower volumes in the first quarter in parallel with lower raw material prices, in addition to boosting margins. In addition, the group intends to provide the planned additional capacity gradually in the second half of the year, depending on the development of demand, and in the absence of a significant increase in capacity at the industry level.

At the end of last year, the same group announced a new investment program worth MAD 130 billion, which will increase fertilizer production capacities to 20 million tons, and will enable all industrial facilities to be provided with green energy by 2027 by investing in renewable energies and seawater desalination.