ADNOC JV Fertiglobe wows shareholders with 2022 dividend of stellar $1.45b

Dubai: Shareholders in ADX-listed Fertiglobe will have reasons to be pleased – they will be getting a share of $700 million (Dh2.6 billion) as second-half 2022 dividend and taking the full-year tally to $1.3 billion.

"Fertiglobe’s dividend policy is to substantially pay out all excess free cashflows after providing for growth opportunities, while maintaining investment grade credit ratings," said Ahmed El-Hoshy, CEO of Fertiglobe. "(The)  management announces H2-2022 dividends in line with previous guidance, at $700 million (or the equivalent of AED 0.31 per share), payable in April 2023.

"During calendar year 2022, Fertiglobe paid cash dividends of $1.1 billion."

For shareholders, that works out to a yield of 7.5 per cent, with the company's stock trading at Dh4.12 on ADX. The largest nitrogen fertilizer producer in the MENA region, Fertiglobe's 2022 revenue hit $5 billion - and that's a 52 per cent compared to 2021 - while the adjusted EBITDA was up 59 per cent to $2.5 billion.

All of which resulted in adjusted net profit increasing 75 per cent to $1.3 billion. (However, Q4-2022 revenues were lower by 11 per cent year-on-year to $1.1 billion, 'driven by lower urea prices and plant turnarounds in the UAE and Egypt during the quarter'.

Optimum operations

"We have successfully and safely completed several turnarounds across our plants in 2022, including in Q4 in the UAE and Egypt, and do not have further turnarounds planned at these facilities in 2023," said El-Hoshy. "We have a good order book going into the first quarter of 2023, and our disciplined commercial strategy and distribution capabilities allow us to manage inventories close to main demand centres, placing us well to serve key import markets."

It was in late October of 2021 that Fertiglobe listed on ADX after $795 million IPO, and the stock surging 20 per cent on the opening day.

Near term outlook

According to the CEO, the outlook remains promising. "Despite lower nitrogen pricing recently, the medium-term fundamentals remain supportive," said El-Hoshy. "Nitrogen demand is expected to recover to support rebuilding of global grain stocks with global grain stock-to-use ratios at their lowest levels in 20 years.

"Forward grain prices are supportive of farm incomes and incentivising increased planted acreage and nitrogen demand to help rebuild these grain stocks. As a result, global demand is expected to be above trend levels at least until 2025, driven by multiple factors ranging from higher demand in major import countries to favorable farm economics."