Rabat – Despite a difficult international economic climate and an acute decline of sale prices, the Cherifien Phosphate Office (OCP) managed to increase its turnover by 7 percent during the first half of 2017 to over MAD 23 billion.
Morocco’s African-oriented economic approach is starting to bear fruit. According to the group’s earnings report for 2017’s first half, the OCP achieved an exceptional performance on the African market, with the continent accounting for 40 percent of Moroccan fertilizer exports.
From January to June 2017, OCP’s international sales reached record levels, due to strong demand for premium products in the African market, where OCP saw sales increase in all regions while exports increased by 44 percent.
“OCP remains at the forefront of major industry developments. During the first half of the year, we successfully targeted new markets such as Africa, which accounted for nearly 40 percent of fertilizer exports, supply of specialty products that will have reached more than a third of total fertilizer exports,” comments the CEO of the group Mostafa Terrab.
This stellar performance was the main driver of the group’s turnover, which reached over MAD 23 billion compared to MAD 21 billion in the same period of 2016. As a result, EBITDA amounted to MAD 5.9 billion, remaining stable compared to MAD 5.9 billion for the same period last year, resulting in an EBITDA margin of 26 percent.
For the Q2FY17, second-quarter revenues amounted to MAD 11.8 billion, compared with MAD 11.3 billion in the same period last year. EBITDA amounted to MAD 2.7 billion, compared to MAD 3 billion in the second quarter of 2016, resulting in an EBITDA margin of 22 percent.
Operating and financial results for the first half of 2017 were up 7 percent year-on-year to MAD 23.2 billion. The increase was supported by a 28 percent growth in rock revenues and a 17 percent increase in fertilizer revenues, reflecting higher sales volumes of all products and offsetting lower prices.
2017: A record year
In its financial communication, OCP management is also optimistic for the rest of 2017. According to the group, the high demand in the phosphate market, which is supported by stable fundamentals and lower input prices for agricultural production, encourages consumption among the major import markets, namely India, Latin America, and Africa.
“2017 represents a significant turning point for OCP,” the group’s management said in its financial results report. “The first phase of the investment program is coming to an end, which will significantly increase our fertilizer and rock export capacities while generating significant operational efficiency gains.”
According to its report, the OCP explained that its investment program was respected with a total expenditure of MAD 7.4 billion. In the first half of the year, the group also completed some of its industrial projects, such as the third JFC3 fertilizer plant, the new sulfur line, and the Jorf power plant – the second drying line downstream at Jorf – while pursuing its extension of the MEA washing unit in Khouribga.
This progress, according to the OCP, positions the group as “the main beneficiary of a market recovery, allowing it to capture a significant share of the growth in demand in the coming years.”