Morocco’s OCP Turnover Reaches $1.79 Billion in First Quarter of 2023

Morocco's OCP Group has announced a turnover of MAD 18.2 billion ($1.79 billion) in the first quarter of 2023, according to the company's latest financial statement.

Rabat – Morocco’s OCP Group has announced a turnover of MAD 18.2 billion ($1.79 billion) in the first quarter of 2023, according to the company’s latest financial statement.

While this figure represents a decrease from the same period last year, when sales totaled MAD 25.3 billion ($2.48 billion), the company highlighted that its sales have increased by 28% compared to the first quarter of 2021.

OCP attributed the decrease in turnover to the decline in global fertilizer prices. The drop in prices can be attributed to lower demand in most importing markets, except for Brazil and India, and a significant decrease in the prices of raw materials like sulfur and ammonia.

The gross margin of OCP also recorded a decrease in the first quarter of 2023, declining from MAD 15.8 billion ($1.5 billion) in Q1 2022 to MAD 9.07 billion ($888.7 million) in Q1 2023.

In terms of EBITDA (earnings before interest, taxes, depreciation, and amortization), OCP reported MAD 4.6 billion ($458.9 million) in Q1 2023, compared to MAD 11.6 billion ($1.13 billion) in the same period of the previous year, resulting in an EBITDA margin of 26%.

Despite the challenges faced, OCP managed to maintain significant profitability. The company’s capital expenditure reached MAD 5.6 billion ($548.3 million) in Q1 2023, reflecting an increase from MAD 2.9 billion ($283.9 million) in the same period of 2022.

OCP highlighted that the demand forecast is showing signs of improvement, which supports its optimistic expectations for a promising second half in 2023.

The company expects low inventory levels in certain regions, favorable economic conditions for farmers, and the approaching farming season to contribute to the boost in margins, along with lower raw material costs.

Additionally, OCP Group plans to phase in additional capacity over the second half of 2023 based on demand trends and in the absence of significant industry-wide capacity increases.

The group manages the majority of Morocco’s phosphate assets. With Morocco holding 75% of the world’s phosphate rock reserves, OCP plays a critical role in global fertilizer production.