Fertilizer prices decreased by 35% in 2019, causing a slight decrease in OCP turnover.
Rabat – The OCP Group achieved a turnover of MAD 54.9 billion in 2019, recording a decrease of 3% compared to 2018, due to a general decrease in prices.
In a statement, the group stated that “during 2019, OCP performed well and maintained a good level of profitability, despite the overall price drop, thanks to its leadership in terms of capabilities and cost control.”
OCP said that in 2019, fertilizer prices declined from one season to the next decreasing by an average of 35%. The change resulted from the combined effects of abundant supply, a decrease in raw material prices–especially sulfur, unfavorable weather conditions, and the devaluing of the Chinese Yuan.
The group noted that fertilizer imports have increased in most regions, mainly through the accumulation of stocks, especially in the US and India. It added that the American market has been affected by two consecutive bad agriculture seasons, while India accelerated most of its purchases in the first half of 2019 thanks to good crop yields.
“In 2019, the Sheriff Phosphate Group achieved strong operational results despite the least favorable market conditions from last year,” the report quoted the president and general manager of the group, Mostafa Terrab, as saying.
“During this season, the OCP recorded a financial achievement, among the highest in the sector, supported by growth in production capacity and operational effectiveness.”
Terrab added that the price correction in 2019 led to a decline in primary financial indicators. Terrab noted that fertilizer prices recorded an overall decrease of 35%, which is well below industry expectations.
The OCP managed to maintain a balanced performance across the three sectors of the value chain, allowing it to record an increase of 28% in EBITDA margin, a 28% decrease in value and redemption, which is much higher than the field’s prevailing average.
“The group continued to meet the product needs of a geographically diverse group of customers, especially in Latin America and Europe, with increased demand for fertilizers in emerging markets on the African continent, with sales increasing 11% compared to 2018,” Terrab added.
Terrab emphasized that OCP has strengthened its position at the level of specialized products, which represented 34% of its volume of fertilizer sales in 2019.
“These products will continue to represent a large part of the office’s exports thanks to the development of new fertilizer solutions that have been adapted to crops and soil, to cater to the needs of farmers across the world,” Terrab specified.