Moody's Investors Service believes that Russian fertiliser major Acron (B1/Stable) cutting its investment program to USD 400mn is rating positive. The agency believes that this will help to keep the adjusted leverage below 3.0x and will support the liquidity in coming 12-18 months. Cutting capex will also result in substantial reduction of new debt. As of end of 2014 Moody's forecasts net debt at around USD 1.4bn vs. USD 1.5bn as of end of 2013.
Acron increased its output of nitrogen fertilisers by 12% in 2013 to 2.996mn tonnes. The output of ammonia increased by 7% to 1.914mn tonnes, and output of composite fertilisers inched by 1% to 2.613mn tonnes.
In 2013, the overall output increased by 4% to record-high 6.142mn tonnes due to stable demand on nitrogen fertilisers. The demand is expected to remain stable in Q1/14.
Acron posted IFRS net profit of RUB 8bn (USD 236.5mn) in Jan-Sep 2013, down by 32% y/y, the company announced. The decline rate of net profit accelerated as compared to -20% y/y seen in H1/13. Despite the decline, net profit for Jan-Sep exceeded the expectations of the analyst (RUB 7.33bn in Prime's survey). Company's revenues in Jan-Sep decreased by 3% y/y to RUB 51.7bn. EBITDA declined by 19% y/y to RUB 12.38bn, at a margin of 24% vs. 28% a year earlier.
Previously in October 2013, Acron announced postponing the launch of its own potash extraction and thus cut its investment program by 25%. About USD 150mn out of planned USD 600mn investment program for 2013 will not be used. Launching major potash mines in the Perm region is postponed from 2017 to 2021. Acron is the 6th largest producer of nitrogen fertilizers in the world and the second largest in Russia.