Net revenues from Morocco’s phosphates and fertilizers producer OCP Group declined to a nevertheless substantial 91.27 billion MAD in 2023 compared to 114.57 billion MAD in 2022, the group said in a press release on its financial results on Thursday.
In 2023 Q4 alone, the company’s profit peaked at 30.2 billion MAD due to dynamic market conditions leading to a significant rise in sales, OCP noted.
“The fourth-quarter results contributed to a strong performance for the entire year, despite market conditions marked by a significant decline in prices of phosphate products compared to the exceptional levels of 2022,” OCP CEO Mostafa Terrab stated.
Terrab added that this transition to more normal price levels stimulated demand in key importing regions in the 2023 H2, resulting in a 43% increase in revenue compared to H1 of 2023, and nearly a threefold increase in earnings before interest, tax, depreciation and amortization (EBITDA).
Fertilizers accounted for 66% of OCP’s total revenue in 2023, with a substantial increase in Triple Super Phosphate (TSP) volumes compared to the previous year, representing 15% of fertilizer sales, up from 11% in 2022.
TSP products have generated increasing demand, especially in Brazil and other regions of South America and Africa, due to their effectiveness in optimizing fertilizer application on various soil types.
The operational efficiency of the Group and its cost leadership supported a solid EBITDA margin of 32% in 2023, a level that remains above the industry average and demonstrates the Group’s resilience.
The gross margin stood at 50.53 billion MAD compared to 70.38 billion MAD in 2022, mainly impacted by the significant stock accumulation in 2022. On the other hand, EBITDA reached 29.39 billion MAD, marking a decrease from the previous year’s 50.07 billion MAD.
OCP’s net financial debt amounted to 68.28 billion MAD with a financial leverage ratio of 2.32x as of December 31, 2023, compared to 1.02x at the end of December 2022.
As for “green” investment, the Group continues to invest responsibly, it said, to enhance its competitiveness and sustainability, address global food insecurity, and meet the anticipated long-term demand growth.
After successful commissioning of the first of three new fertilizer production lines, OCP anticipates that the other two lines will be operational by the end of the first half of 2024, with a gradual increase in production, adjusted according to market development and demand.
“In 2023, OCP continued the deployment of the second phase of its investment program. This program will strengthen the Group’s competitive advantage by focusing on continuous product innovation, capacity expansion, and operational efficiency improvement,” Terrab highlighted. “This includes enhancing OCP’s industrial flexibility, investments in solar energy, water management, and green ammonia production.”