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Edited Transcript of PHOR.MZ earnings conference call or presentation 28-Aug-19 1:30pm GMT

Half Year 2019 PhosAgro PAO Earnings Call (IFRS)

St Petersburg Sep 10, 2019 (Thomson StreetEvents) -- Edited Transcript of PhosAgro PAO earnings conference call or presentation Wednesday, August 28, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alexander Seleznev

PJSC PhosAgro - Chief of Staff & Member of the Management Board

* Alexander F. Sharabaika

PJSC PhosAgro - CFO & Member of Management Board

* Andrey Andreevich Guryev

PJSC PhosAgro - Chairman of the Management Board, CEO & Director

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Conference Call Participants

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* Alexandra Symeonidi;NN Investment Partners;Analyst

* Ben Gorman

UBS Investment Bank, Research Division - Associate Analyst

* Joel Jackson

BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst

* Luke Emerson Washer

BofA Merrill Lynch, Research Division - Research Analyst

* Nikolay Sosnovskiy

Prosperity Capital Management (Russia) Limited - Director of Metals, Mining & Chemicals

* Robin Fiedler

BMO Capital Markets Equity Research - Senior Associate

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to PhosAgro Second Quarter 2019 Conference Call and Webcast. I will now hand over to Alexander Seleznev, Chief of Staff. Sir, please go ahead.

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Alexander Seleznev, PJSC PhosAgro - Chief of Staff & Member of the Management Board [2]

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Yes, dear colleagues, good afternoon and welcome to our second quarter 2019 IFRS results conference call. So we're going to start with a short presentation just with more space for the Q&A session. And as usual, we will have almost the entire management team here in the room.

So the presentation slides so we are using today during the conference call are available at our website phosagro.com. During this conference call, we're going to make the forward-looking statements about future financial and operating results. Certainly, they are based on the management beliefs and expectations as of today and are subject to the significant risks. The actual results may differ materially from the current expectations.

So let's start with the key highlights for the second quarter 2019. One of the key measures, EBITDA in the second quarter was slightly down by 2% year-on-year to roughly RUB 18.3 billion, that's slightly more than $280 million. The EBITDA margin stands at 32% that is more or less stable year-on-year.

In terms of net income adjusted for the either ForEx gain or losses stand at RUB 9.2 billion, that implies adjusted net margin at around 16%. So year-on-year that's roughly 20% decrease.

In terms of operating cash flow, so they were strongly up, and if you look at the dynamics and the CapEx and free cash flow, you're going to see that free cash flow for the second quarter 2019 was more than RUB 10 billion, that implies roughly more than $150 million, and primarily driven by strong EBITDA as well as good increase in the working capital thanks to the launch of factoring system.

In terms of the capital expenditure, in the second quarter 2019, it stands roughly RUB 9 billion or $140 million, was up by 20% year-on-year and was roughly 50% of second quarter 2019 EBITDA.

The net debt was roughly RUB 110 billion or $1.7 billion while net debt to 12 month EBITDA decreased to 1.3x, and as you may find that for the last 6 quarters, so we have sustainable decrease in the leverage.

And as you have seen yesterday, the Board of Directors so recommended, for the second quarter 2019, the dividends as RUB 18 per GDR, that implies roughly 75% of adjusted net income.

Now let's go through the key market dynamics. So we're going see in the third quarter and have seen in the second quarter 2019. So talking about the process for the phosphate-based fertilizers, and one of them is a fertilizer for us, that's MAP. So the price in the second quarter 2019, FOB Baltic was slightly less than $360. Certainly, it implies roughly 10% decrease year-on-year in the price. The key reason behind the decrease in the phosphate price is certainly, so first of all, that bad weather condition in U.S. and in Europe, plus increased export activity of Middle East, companies like OCP and Ma'aden as well as increase in the export of Chinese companies.

Talking about urea price, in the second quarter 2019, the price was roughly $250, that implies more than 10% increase year-on-year. The key reason behind the growth, so first of all, there's decrease in export from China plus additional sanctions that were imposed against Iranian products plus the seasonal demand in the market.

Talking about NPK premium. So currently, it stands more than 15%, which is a good story for PhosAgro primarily thanks to the production flexibility of the company. The good thing is that affordability ratio for the farmers is increasing, and as you may see the burden was exactly in the fourth quarter 2018 with the higher prices for the fertilizers and low prices for the feedstocks. There is a decrease in the fertilizers and certainly the increase in the prices for soft commodities pushed up the affordability ratio for the farmers.

So currently we do believe the affordability is sky high and we do expect increase in the consumption from the farmers. Now on the key feedstock dynamics, in terms of the ammonia FOB Baltic, so the price in the second quarter 2019 was more than -- slightly more than USD 220, that implies roughly 5% decrease year-on-year. The key reason is the decrease in the gas prices especially in Europe plus the launch of new facilities as an example by Eurasia company.

Talking about phosphate rock price, FOB Morocco. In the second quarter 2019, it was around $100, that implies roughly 10% increase year-on-year, but just recently, we have seen the -- some slight decrease in the price at the beginning of the third quarter 2019.

Talking about the phosphoric acid price. The price between Morocco and Indian companies in the second quarter 2019 was agreed at USD 730, that's more or less flat year-on-year. But for the third quarter 2019, it was renegotiated and decreased to USD 655.

And finally, one of the main feedstock produce phosphate fertilizers, that's sulfur. In the second quarter 2019, it stands roughly $120, that implies around 10% decrease year-on-year, but currently in the third quarter 2019, so we do see the further decrease and currently the price is around $100 per tonne CFR China.

Now let's talk a little bit on the global trends in terms of the consumption and export. So first of all, talking about the key markets in terms of the consumption. Certainly, that's Brazil, and the good story for the sector is that the consumption in Brazil is gearing up primarily triggered by the good soft commodity prices, especially for the soybeans as well as the increase of affordability ratio.

So currently, in the second quarter, so we see quite substantial increase in the consumption in Brazil plus import.

In terms of the import to India. So the good thing is that we do not see any decrease year-on-year, and currently for the second quarter 2019, that's roughly the same 2 million tonnes. For the full year -- so for the full year, in terms of the import to India, for GAP, so we do believe the number should be almost flat year-on-year at around 5.5 million, 6 million tonnes.

Now talking about China. So first of all, in terms of the phosphate market. Certainly, one of the main issues in the sector was increase in export from China primarily triggered by the decrease in the domestic consumption.

If you look at the bottom right chart, you're going to see that in the second quarter and in the first quarter, so we have seen the increase by almost 1 million tonnes of the export of DAP and MAP. Just recently also good -- the numbers for the July, there's still the increase by more than 100,000 tonnes of the export from China.

Talking about urea export from China, so that's slightly increased quarter-on-quarter but still so the numbers are quite negligible comparing to the numbers in 2016 and 2017.

Now let's talk in more details about the financial result that we published for the second quarter 2019. So first of all, talking about the sales breakdown in the second quarter, the overall sales of the key products, that's phosphate fertilizers, nitrogen fertilizers and phosphate rock. So that's roughly 3 million tonnes. Altogether, that's more or less flat year-on-year. In terms of the ruble numbers, in the second quarter 2019, so we printed the revenue at around RUB 58 billion, that implies some slight increase year-on-year.

Despite the global decrease in the phosphate prices, one of the factors that positively affected the company's profitability in the second quarter certainly was the depreciation in the ruble. The average rate in second quarter 2019 was roughly RUB 65 per $1 versus RUB 62 in second quarter 2018.

Talking about the breakdown of the sales by the region. Certainly, we have seen quite substantial increase in the share of Russia in our sales breakdown and the total revenues for Russia in the second quarter was roughly 40% versus 30% last year. The second biggest market for us in terms of the revenue, certainly that's Europe, and after that, that's America.

Talking about the sales breakdown by the products, that's almost like the same breakdown as year-ago. 2 major products, so first of all, that's concentrated fertilizers, DAP/MAP, and the most premium for us, NPK fertilizers. Altogether, that's roughly 60% of the total sales.

Now let's talk a little bit about the structure of the cost of goods sold. In the second quarter 2019, the cost of goods sold was roughly RUB 32 billion, that implies roughly 5% increase year-on-year.

Talking about the key items. So the biggest one, that's the material, and services was more or less flat year-on-year, instead that's roughly RUB 7.1 billion.

Talking about payroll, that was RUB 3.1 billion and was marginally down year-on-year. Almost the same dynamics we have seen for ammonia, it's almost flat for sulfur, almost flat. And so we have seen some slight decrease in natural gas for RUB 2.9 billion, so roughly minus 10% year-on-year.

The only item so we have seen quite substantial increase is the potash, that's almost 40% increase year-on-year to almost RUB 4 billion. Two make major things behind that. So first of all, there's the increase in the price that fully follows the trend on the global market that is combined with the increase in the volumes.

Now let's talk a little bit on the profitability by segments. So first of all, in the second quarter 2019, the profitability of the phosphate segment was roughly slightly more than RUB 21 billion, or more or less flat year-on-year or slightly down, let's say that way. And the main reason certainly that's the decrease in the phosphate prices year-on-year offset by the devaluation in the ruble. The margin for the phosphate segment was roughly 45%, that's slightly down by 3 percentage points year-on-year.

In terms of the nitrogen margin, the gross profit for the nitrogen segment was RUB 5 billion, that implies 56% gross margin, that is up by 4 percentage points year-on-year, and certainly, the key reason that's the good pricing for the urea and ammonium nitrate.

On the top, bottom and right chart, so you may see the detailed breakdown of the phosphate and nitrogen sales by the destination export and domestic. So if you need more detailed information by products, please contact IR team.

Now let's talk a little bit on the dynamics in EBITDA. So as we already discussed, in the second quarter 2019, the EBITDA was RUB 18.3 billion, that implies 32% EBITDA margin, that implies some marginal decrease as well as in the absolute numbers by 2% and by 1 percentage point in relative terms.

On the bottom of left chart, so you may see the key items that affected the EBITDA in the second quarter 2019. As you may see certainly, thanks to the increase in the production, just to remind you that we increased the production by almost 4% in the second quarter year-on-year. Certainly, the profitability in the second quarter was negatively affected by the decrease in prices, increase in -- some slight increase in the cost. On the positive side, it was affected by the devaluation in the ruble.

Almost the same dynamics you may find on the bottom right chart, so that's the EBITDA bridge for the first half 2019, the main effect is coming from the increase in the production, certainly sales as well as devaluation in the ruble. Certainly, prices affecting negatively the actual results for the first half.

Now on the operating cash flow, free cash flow and CapEx. So in terms of CapEx, for the second quarter 2019, the total CapEx was RUB 9.1 billion, that's roughly 20% up year-on-year. The main items for the CapEx in the second quarter 2019 was the maintenance plus the development of new facilities such as the construction of nitric acid, sulfuric acid and ammonium sulfate. Talking about the CapEx-to-EBITDA ratio. In the second quarter 2019, it was around 50%, that's fully in line with the company's policy.

Talking about the conversion from EBITDA to operating cash flow and to free cash flow. So the top right chart, so you may see that operating cash flow in the second quarter stands slightly less than RUB 20 billion and was hugely affected by the working capital release, thanks to the launch of the factoring system. Assuming CapEx at RUB 9 billion so we generated free cash flow in the second quarter 2019 by almost RUB 10 billion. The right bottom chart, so the same free cash flow EBITDA to free cash flow conversion for the first half 2019.

Now on the debt side. The total debt in the second quarter 2019 quarter-on-quarter decreased by RUB 12 billion and stands at RUB 130 billion. The net debt is RUB 110, while net debt to EBITDA stands at 1.3x and as you may see for the last 6 quarters, so we substantially decreased the leverage from 2.3x to 1.3x. On the bottom right chart, so you may see the maturity profile and for 2019 by the year-end, so we need to payout roughly RUB 16 billion, that's fully affordable.

In terms of the debt breakdown. So currently, as it used to be, we have the majority of the debt is denominated in USD more than 80% while in the first half 2019, we increased the share of euro-denominated loans, and currently, that's slightly less than 20%. The share of ruble-denominated loans is around like 2%.

And now on the outlook by the year-end. So first of all, we still believe in the good consumption in the phosphate market, so first of all, we do believe that Indians will take roughly 5.5 million, 6 million tonnes of DAP for this year. The main reason is very good and very attractive subsidiaries and the margins that currently exist in the Indian distribution chain. Plus just recently, the Chinese producers announced decrease in the production of DAP by almost 1 million tonnes per quarter in the coming quarters and we do believe that should stabilize the market.

Plus, we do believe in the second half, or to be more precise, and that of the third quarter, so we're going to see the initiation of the high season in North America and Europe.

And finally, as we already mentioned, we do believe that the affordability ratio for the farmers is quite good assuming the recent recovery in the soft commodity prices.

So with that, I would like to finish the presentation part and I would like to start the Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Stephen Byrne, Bank of America.

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Luke Emerson Washer, BofA Merrill Lynch, Research Division - Research Analyst [2]

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This is Luke Washer on for Steve. I wanted to ask about your sales. You commented that you had less in America and more in Russia. Was this deliberate or represented more weather issues in North America? Or you're looking to grow more in Russia?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [3]

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It's Andrey Guryev. So basically there are -- of course that was the situation with the floods in United States, which caused a lot of trouble for demand of phosphate fertilizer, but at the same time, i can say that if you look in the -- at the level of growth of Russian consumption of fertilizers, so this year we see about 14.5% plus to the previous year. So we see a quite substantial growth in terms of demand. So that's why it was not a problem for us to reallocate volumes to the premium market, which is Russian market.

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Luke Emerson Washer, BofA Merrill Lynch, Research Division - Research Analyst [4]

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Great. And a quick follow-up, if you don't mind. Where are you seeing increased fertilizer demand? And what is your -- do you have any outlook for nitrogen fertilizer?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [5]

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We will see increase in demand in all our priority markets. Like Latin America, of course. In Brazil, I think United States also built -- pick up with this demand. Yes, and of course, Russia. Yes.

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Operator [6]

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Ben Gorman, UBS.

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Ben Gorman, UBS Investment Bank, Research Division - Associate Analyst [7]

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Just a few quick ones for me. First of all, in terms of the run rate that you've seen in the first 2 months of Q3, I was wondering whether you could give a bit of detail around whether your outlook comments were related to what you're already seeing or more to do with obviously the sort of autumn demand that we obviously haven't seen yet. And particularly maybe could you comment on what you're seeing right now in Q3, 4 Latin American demand? That's the first one. I've got another one in a minute, if that's okay. Did my question get through?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [8]

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Yes, we're good. So talking about the third quarter. Of course, we all see a further development of demand, in Latin America, particularly in Brazil. It's a very good situation in terms of affordability, if you look from that side. And I think this is like a quite important side. Again, like as I said, like about the North America, so we'll see a demand from this country, of course Europe, of course Russia. So in terms of demand, we don't see a problem.

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Ben Gorman, UBS Investment Bank, Research Division - Associate Analyst [9]

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Okay. Just maybe on the supply side then. Do you have sort of view of the changing dynamics with OCP and Ma'aden, I think it seem -- sort of seemed at the beginning of the year that they were being very disciplined in their supply. But maybe now given how much volume they're still sending to the U.S., it sort of looks like maybe being a bit more aggressive on price. Have you seen any change in sort of aggression in terms of price, particularly from OCP?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [10]

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You're right. If we talk about OCP and Ma'aden, that's at the end of basically investments of -- so we will not see any new volumes on the second half of the year. So ever since the ramp-up by 100%. So I believe that we should continue to be disciplined on the market from -- just continue to do so. In China, there is some positive news from China, which also announced the reduction of supply.

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Ben Gorman, UBS Investment Bank, Research Division - Associate Analyst [11]

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Just a final one for me. Just on the financial side. Just this factoring program, I don't know whether you could give what the free cash flow would have been without the factoring program? And just wondering the scale of that going forward. And any detail on that would be helpful.

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [12]

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It's Alexander Sharabaika. So the details you can find in the financial statement, it's actually disclosed. The total amount that's been used up to this point is around -- it's slightly over RUB 5 billion. So we -- our intention is to continue using this program as we believe this is quite beneficial for free cash flow generation. And also in terms of -- the cost is very competitive pricing. The duration of this program is multiyear. So it's really depending on how we're going to get along with this program. It can be 2 years or 3 years. And for the frequency of use, we intend to use this option maybe on the quarter or few times a quarter basis.

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Operator [13]

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Our next question comes from Joel Jackson, BMO.

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Robin Fiedler, BMO Capital Markets Equity Research - Senior Associate [14]

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This is Robin on for Joel. So I want to better understand your phosphate price guidance. You referenced medium-term stability and then gradual recovery thereafter. We also have acknowledged that there's ramping supply from that in OCP. So my question is, do you believe that phosphate prices have reached a floor right now? Or are we likely to see some further price weakness for the next coming weeks or maybe for the rest of Q3, perhaps a better set up as you say into year-end?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [15]

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So basically, the third quarter is autumn season, so as I said, we have some positive signals from markets in terms of supply, or in terms -- excuse me, in terms of demand and some discipline from the producers as well as Chinese. So I believe it's -- might be a signal to increase some prices in the first quarter. Particularly taken account that we already hit the floor in my mind.

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Robin Fiedler, BMO Capital Markets Equity Research - Senior Associate [16]

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Okay. That's helpful. And so Chinese phosphate producers have had a history of signaling to the market that they'll cut production or will trade at a certain price floor. But then that doesn't always work out, it's not always carried out that way. So what gives you confidence that the 1 million tonnes or so per quarter of production cuts will actually coming into effect this time?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [17]

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Robin, first of all, half of producers in China. As we see it's -- they work below the profitability levels of cash cost and the one, the companies like, who are virtually integrated. As I said, they've already hit the floor with the cash costs. So I think this is an explanation.

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Robin Fiedler, BMO Capital Markets Equity Research - Senior Associate [18]

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Just one quick follow up to that. What do you see cash cost for the marginal production in China right now?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [19]

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Yes. I think it's around USD 300, FOB.

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Operator [20]

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Our next question comes from Nikolay Sosnovskiy, Prosperity.

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Nikolay Sosnovskiy, Prosperity Capital Management (Russia) Limited - Director of Metals, Mining & Chemicals [21]

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I've got also a couple of questions. First one on your outlook for nitrogen fertilizers in the remainder of the year and urea in particular because in Europe, we've got, I would say, extremely low gas prices at the moment. So how do you think urea price will behave in the remainder of the year? Should European producers continue generating healthy cash flows? That's my first question.

And second one on domestic's potash prices in your cost of production, obviously potash component has increased quite potentially last quarter. Do you expect any positive changes after EuroChem launched its capacities and ramping up them into the year-end and next year? So do you think some local competition could create some kind of positive momentum here?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [22]

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So basically if we talk about the urea and the current level for -- it's about 240, 250. Or we can say that the third and fourth quarter traditionally will be characterized like it was an increase of seasonal demand from the major regions, from the key regions like India and Brazil. A little bit later from Europe and North America. So basically it's -- it has to be a -- if I talk about tendencies like we'll see probably a significant increase in terms of nitrogen. We also see the sanctions on uranium, urea. Then like we might see the further limitation from China. Yes, so that's about this.

In terms of ammonia, at the current level, $210 to $225. We will see in June a positive in -- of EuroChem and (inaudible). So basically there'll be an increase in competition on the western market. Together with that, we see quite a low prices for nitrogen and coal in the countries, which import not nitrogen, gas and coal. So we will see the increase in competition in ammonia. Talking about copper, I believe we will see a further -- no, not significant, but further reduction in price.

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Operator [23]

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(Operator Instructions) Our next question comes from Alexandra Symeonidi, NN Investment Partners.

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Alexandra Symeonidi;NN Investment Partners;Analyst, [24]

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I have two questions. First of all, do you give production guidelines for NPK for the second half of the year? So that is my first question. And my second question, I wanted to ask what is your CapEx guidance for the full year 2019? Does it remain RUB 34 billion?

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Alexander Seleznev, PJSC PhosAgro - Chief of Staff & Member of the Management Board [25]

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This is Alexander. So the [our] production for the full year, the guidance is still the same. That's 9.4 million, 9.5 million tonnes. So you have the results for the first half already published. So I would say that roughly, like, typically, the NPK production is around like 35% of the overall production of the RUB 30 million. So that way you can roughly estimate the overall production of NPK. But certainly, the factor of the profitability of each product. I mean DAP/MAP and NPK.

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [26]

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And for -- this is Alexander. As for CapEx guidance 2019, we recently -- there was recently a press release that we lift the guidance from RUB 34 billion to RUB 36 billion and the major item which have increased this guidance was by the buyback facility of leased railcars. So the rationale behind this decision was the interest rates, they were fixed a while ago. So more specifically, at the beginning of -- well, from, let's say, 2015 to 2018. So we, overall, bought around 1,600 of leased cars, railcars from the leasing companies, and effectively, it already saved as almost RUB 1 million this year. So this decision was made based on economic calculations and we believe this is very rational. Therefore, the CapEx have been upgraded to RUB 38 billion -- sorry, RUB 36 billion.

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Alexandra Symeonidi;NN Investment Partners;Analyst, [27]

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Okay. Great. Can you please talk about your joint (inaudible) development projects? I know very few of them.

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [28]

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Say again, which projects?

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Alexandra Symeonidi;NN Investment Partners;Analyst, [29]

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So development part of the CapEx, by (inaudible) those projects.

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [30]

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We're talking about projects for this year, 2019?

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Alexandra Symeonidi;NN Investment Partners;Analyst, [31]

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Yes, yes.

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [32]

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Well, those projects, they mainly include ammonium sulfate, sulfuric acid facility, and also conveyor belt transportation system that we are assembling in Kirovsk. So those items, they are on schedule with maybe some deviations but not the major ones. And in terms of CapEx, we are pretty much in the budget. So I think deviation is below 3%.

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Operator [33]

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We have a follow-up question from Joel Jackson, BMO.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [34]

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What is the expected percentage of revenue that's going to come from domestic sales in the second half?

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Alexander F. Sharabaika, PJSC PhosAgro - CFO & Member of Management Board [35]

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Well, roughly, we can assume, for the modeling purposes, around 1/3 of the revenue will be coming from domestic markets.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [36]

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Okay. And just one last follow up again, sorry. I want to make sure I heard the answer to my previous question correctly when asked about the Chinese producer cash cost. Was the answer $300 a tonne FOB or $330?

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [37]

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$300. 3-0-0 for profitable good quality vertical integration for (inaudible).

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [38]

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Okay. So with Chinese FOB prices right now around $330, I'm just trying to bridge -- it seems like there still could be some more room to go on the downside than keeping with that expected cash flow of $300...

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Andrey Andreevich Guryev, PJSC PhosAgro - Chairman of the Management Board, CEO & Director [39]

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But there's no point for them to go. We have a clear season in front of us, so there is no point to push market -- that down. And I think that if the prices and this development of the -- well, fall of the price was caused by the problems with demand on the first half of the year, and particularly in North American and so on, and some former base prices from some companies, which were selling with open contracts fertilizers to Latin America and to North America as well but again, like today we see a very strong in terms of volume demand from the major markets. And we don't see any new volumes coming onto the markets. So I believe that the market is definitely on balance and have a positive signal to grow in terms of prices.

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Operator [40]

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(Operator Instructions) We have no other audio question. Dear speakers, we can now switch to written Q&A.

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Unidentified Company Representative, [41]

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Yes. We have a question from the web form. So [Alex Zapolsky] from [BCS] is asking, will you tell us -- some thought on the new dividend policy and when it's going to be announced?

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Alexander Seleznev, PJSC PhosAgro - Chief of Staff & Member of the Management Board [42]

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So we -- yes, this is Alexander again. During the last Board of Directors, we have very detailed discussion on the details of new dividend policy, which we decided to approve at the meeting prior to Capital Market Day. And by the way, guys, you're all invited to participate in our Capital Market Day, which will be held in London on September 25. So the next Board of Directors, which will be held on September 24, will approve the new dividend policy, which we'll announce on the Capital Market Day. So we have no further question on the web form.

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Operator [43]

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We have no further questions. Dear speakers, we can go back to the conclusion.

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Alexander Seleznev, PJSC PhosAgro - Chief of Staff & Member of the Management Board [44]

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Again. Thank you, everybody for staying with us. Let's stay in touch, and I hope -- so we're going to see you at the Capital Market Day at the end of September. Yes, cheers.

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Operator [45]

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Ladies and gentlemen, this concludes today's webcast call. Thank you for your participation. You may now disconnect.