Financial performance
Despite the challenging market conditions and the need to quickly adapt to the new market reality brought by the coronavirus pandemic, the Grupa Azoty Group was able to deliver good financial performance in 2020.
Despite the challenging market conditions and the need to quickly adapt to the new market reality brought by the coronavirus pandemic, the Grupa Azoty Group was able to deliver good financial performance in 2020.
Our consolidated revenue in 2020 was PLN 10.5bn. Among the key factors driving the revenue were higher sales in the Agro Fertilizers segment and lower demand on the target markets of the Chemicals and Plastics segments.
Consolidated EBITDA came in at PLN 1.3bn in 2020, driven by low gas prices, compensation for higher electricity prices, and support received under the Anti-Crisis Shield .
The Grupa Azoty Group reported consolidated net profit of PLN 355m in 2020.
The full 2020 financial statements of our Group are available on our corporate websites.
1 Compensation under the Act on the Compensation Scheme for Energy-Intensive Sectors and Subsectors established by the Energy Regulatory Office.
2 Funding received under the Act on Special Measures to Prevent, Counteract and Combat COVID-19, Other Infectious Diseases and Crisis Situations Caused by Them of March 2nd 2020, vrersion 4.0.
- Consolidated revenue amounted to PLN 10,524,527 thousand (down 6.93% year on year).
- EBITDA reached PLN 1,321,547 thousand (down 7.2% year on year).
- Consolidated net profit came in at PLN 355,410 thousand (down 12.82% year on year).
* 2013: adjusted for a gain on the acquisition of Grupa Azoty Puławy, Grupa Azoty Siarkopol and AIG, and for an impairment loss on the POM unit.
2014: adjusted for an impairment loss on the phthalic anhydride unit.
2015: adjusted for an impairment loss on the benzene-derived C-none, fats processing and carbon disulfide units.
2016: adjusted for impairment losses on AIG receivables and deposits and on the fats processing unit.
2017: the fats processing unit.
In 2017, EBITDA and net profit were adjusted for impairment losses on the fats processing unit, AIG, Elektrownia Puławy power plant and sulfur deposits.
In 2018, the results were adjusted for impairment losses on the fat processing unit, and net profit was additionally adjusted for the effect of loss of control over AFRIG S.A.
The 2019 result was adjusted for impairment losses relating to the subsidiary Zakłady Azotowe Chorzów, effect of a temporary plant shutdown at Zakłady Azotowe Police, and impairment losses on some of Siarkopol assets due to the sulfur market collapse.
Financial performance of the Grupa Azoty Group companies in 2020
Consolidated statement of profit or loss and other comprehensive income
(all amounts in PLN '000 unless stated otherwise)
| Profit/loss | for the period Jan 1− Dec 31 2020 | for the period Jan 1− Dec 31 2019 | for the period Jan 1− Dec 31 2018 | for the period Jan 1− Dec 31 2017 | for the period Jan 1− Dec 31 2016 |
|---|---|---|---|---|---|
Revenue | 10,524,527 | 11,307,915 | 9,998,967 | 9,617,495 | 8,966,804 |
| Cost of sales | (8,351,020) | (8,833,939) | (8,406,271) | (7,457,734) | (7,004,483) |
| Gross profit | 2,173,507 | 2,473,976 | 1,592,696 | 2,159,761 | 1,962,321 |
| Selling and distribution expenses | (915,699) | (902,195) | (658,602) | (673,555) | (669,315) |
| Administrative expenses | (804,475) | (886,734) | (812,368) | (757,767) | (727,412) |
| Other income | 164,040 | 65,518 | 49,604 | 50,200 | 48,138 |
| Other expenses | (61,614) | (137,741) | (90,186) | (181,425) | (186,128) |
Operating profit | 555,759 | 612,824 | 81,144 | 597,214 | 427,604 |
Finance income | 36,126 | 29,407 | 55,057 | 32,107 | 33,745 |
Finance costs | (100,675) | (96,265) | (108,740) | (68,931) | (44,443) |
Net finance costs | (64,549) | (66,858) | (53,683) | (36,824) | (10,698) |
Share of profit of equity-accounted investees | 14,939 | 12,493 | 13,092 | 16,015 | 15,170 |
| Profit before tax | 506,149 | 558,459 | 40,553 | 576,405 | 432,076 |
| Income tax | (150,739) | (150,786) | (32,793) | (87,579) | (116,833) |
| Net profit | 355,410 | 407,673 | 7,760 | 488,826 | 315,243 |
| Other comprehensive income | |||||
| Items that will not be reclassified to profit or loss | |||||
Actuarial losses from defined benefit plans | (20,061) | (29,908) | (19,428) | (7,991) | (10,333) |
Tax on items that will not be reclassified to profit or loss | 3,404 | 4,995 | 3,633 | 1,510 | 1,937 |
| Total items that will not be reclassified to profit or loss | (16,657) | (24,913) | (15,795) | (6,481) | (8,396) |
| Items that are or may be reclassified to profit or loss | |||||
Cash flow hedges – effective portion of fair-value change | (67,494) | 4,952 | (16,724) | 27,808 | (8,852) |
Translation reserve | 71,541 | (11,043) | 4,786 | 1,157 | 978 |
Income tax relating to items that are or will be reclassified to profit or loss | 12,900 | (941) | 3,178 | (5,296) | 1,682 |
| Total items that are or may be reclassified to profit or loss | 16,947 | (7,032) | (8,760) | 23,669 | (6,192) |
| Total other comprehensive income | 290 | (31,945) | (24,555) | 17,188 | (14,588) |
| Comprehensive income for the period | 355,700 | 375,728 | (16,795) | 506,014 | 300,655 |
| Net profit /(loss) attributable to: | |||||
Owners of the parent | 311,617 | 372,856 | 9,869 | 456,663 | 301,870 |
Non-controlling interests | 43,793 | 34,817 | (2,109) | 32,163 | 13,373 |
| Comprehensive income for the period attributable to: | |||||
Owners of the parent | 314,300 | 342,337 | (13,739) | 470,204 | 289,475 |
Non-controlling interests | 41,400 | 33,391 | (3,056) | 35,810 | 11,180 |
| Earnings per share: | |||||
Basic (PLN) | 3,14 | 3,76 | 0,10 | 4,60 | 3,04 |
Diluted (PLN) | 3,14 | 3,76 | 0,10 | 4,60 | 3,04 |
Information on the Grupa Azoty Group’s consolidated financial results is accessible to the public. As required by the applicable regulations, we make our accounts available to all stakeholders. Our financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union, which are consistent with the interpretations approved by the International Accounting Standards Board. The full consolidated and separate financial statements are available on our website.
The revenue was down 6.93% year on year in 2020, and gross profit fell by PLN 300,469 thousand, or 12%, relative to 2019. Total operating profit was PLN 555,759 thousand, down 9.3% year on year.
| Agro Fertilizers | Plastics | Chemicals | Energy | Other Activities | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | |
| External revenue [‘000] | 6,716,745 | 6,364,624 | 1,458,047 | 1,135,442 | 2,638,885 | 2,522,073 | 274,660 | 255,726 | 221,578 | 247,662 |
| EBIT ['000]* | 640,069 | 492,957 | 17,361 | 105,245 | 93,291 | 157,340 | 11,007 | 11,920 | 92,168 | 22,627 |
| EBITDA ['000]** | 964,690 | 820,267 | 50,053 | 31,946 | 207,762 | 265,665 | 102,263 | 98,303 | 15,706 | 137,288 |
Źródło: Opracowanie własne
* EBIT is calculated as operating profit/(loss) as disclosed in the statement of profit or loss, adjusted for gain on a bargain purchase.
** EBITDA is calculated as operating profit/(loss) before depreciation and amortisation, adjusted for gain on a bargain purchase.
Operating segments’ income, expenses and net profit (loss) for the 12 months ended December 31st 2019
Revenue by segment
In 2020, revenue in the Agro Fertilizers segment was PLN 6,364,624 thousand and accounted for 61% of the Group’s total revenue. Year on year, the segment’s revenue went down slightly, by 5.2%, and its share in the total revenue rose by 1.1pp. Domestic sales accounted for some 55.4% of sales in the Agro Fertilizers segment. Other segments also reported lower revenues: revenue in the Plastics segment accounted for 11% of the Group's total, having declined by 22% year on year, while in the Chemicals and Energy segments revenue fell by 4.43% and 6.9%, respectively, year on year. In 2020, revenue of the Other Activities segment was PLN 247.7m, up 11.8% on 2019. It represented 2.3% of the Group's total revenue figure.
The segments’ respective shares in the revenue structure in 2020 did not change significantly relative to 2019.
EBIT
The Group’s EBIT came in at PLN 555,759 thousand in 2020. The Agro Fertilizers, Chemicals and Other Activities segments generated positive EBITs. EBIT margin in 2020 was 5.3% (5.4% in 2019).
EBITDA
In 2020, the Grupa Azoty Group posted a positive EBITDA of PLN 1,321,547 thousand and net profit of PLN 355,410 thousand, down by PLN 102,563 thousand and PLN 52,263 thousand, respectively, on the corresponding period of the previous year. In line with the Grupa Azoty Group's strategy for 2013–2020 revised in May 2017, the Group's strategic target was to achieve EBITDA margin of 14%. In 2020, EBITDA margin was 13%.
Consolidated data
| Note | for the period Jan 1− Dec 31 2020 | for the period Jan 1− Dec 31 2019 | |
|---|---|---|---|
| Profit/loss | |||
| Revenue | 1 | 10,524,527 | 11,307,915 |
| Cost of sales | 2 | (8 ,51,020) | (8,833,939) |
| Gross profit | 2,173,507 | 2,473,976 | |
| Selling and distribution expenses | 2 | (915,699) | (902,195) |
| Administrative expenses | 2 | (804,475) | (886,734) |
| Other income | 3 | 164,040 | 65,518 |
| Other expenses | 4 | (61,614) | (137,741) |
| Operating profit | 555,759 | 612,824 | |
| Finance income | 5 | 36,126 | 29,407 |
| Finance costs | 6 | (100,675) | (96,265) |
| Net finance income/(costs) | (64,549) | (66,858) | |
| Share of profit of equity-accounted investees | 14,939 | 12,493 | |
| Profit before tax | 506,149 | 558,459 | |
| Income tax | 7 | (150,739) | (150,786) |
| Net profit | 355,410 | 407,673 | |
Structure of assets
In 2020, the Grupa Azoty Group’s assets rose to PLN 18,207,150 thousand, by PLN 2,728,459 thousand relative to the end of 2019. As at December 31st 2020, non-current assets were PLN 13,511,725 thousand, and current assets stood at PLN 4,695,425 thousand.
Year on year, the most significant changes in assets in the reporting period included:
- PLN 2,430,353 thousand increase in property, plant and equipment;
- PLN 42,239 thousand increase in intangible assets;
- PLN 135,798 thousand decrease in inventories;
- PLN 153,241 thousand increase in cash.
Assets | Note | as at Dec 31 2020 | as at Dec 31 2019 |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 10 | 10,573,104 | 8,142,751 |
| Right-of-use assets | 11 | 834,690 | 852,075 |
| Investment property | 12 | 57,364 | 62,014 |
| Intangible assets | 13 | 1,027,310 | 985,071 |
| Goodwill | 13.1 | 331,683 | 308,589 |
| Shares | 14.1 | 9,168 | 9,198 |
| Equity-accounted investees | 14.1 | 91,461 | 88,909 |
| Other financial assets | 14.2 | 2,484 | 2,406 |
| Other receivables | 17 | 489,827 | 156,867 |
| Deferred tax assets | 7.4 | 94,125 | 97,074 |
| Other non-current assets | 19 | 509 | 483 |
| Total non-current assets | 13,511,725 | 10,705,437 | |
| Current assets | |||
| Inventories | 15 | 1,534,011 | 1,669,809 |
| Property rights | 16 | 529,199 | 474,133 |
| Derivative financial instruments | 30.5 | 43,471 | 5,918 |
| Other financial assets | 14.2 | - | 174,724 |
| Current tax assets | 19,621 | 26,973 | |
| Trade and other receivables | 17 | 1,628,244 | 1,615,486 |
| Cash and cash equivalents | 18 | 923,328 | 770,087 |
| Other current assets | 19 | 17,456 | 15,456 |
| Non-current assets held for sale | 20 | 95 | 20,668 |
| Total current assets | 4,695,425 | 4,773,254 | |
| Total assets | 18,207,150 | 15,478,691 | |
The consolidated statement of financial position should be read in conjunction with the notes, which constitute an integral part of the full-year consolidated financial statements.
Structure of equity and liabilities
Year on year, the most significant changes in equity and liabilities in the reporting period included:
- PLN 594,955 thousand increase in equity;
- PLN 776,317 thousand increase in borrowings;
- PLN 8,643 thousand decrease in trade and other payables;
- PLN 561,081 thousand increase in other financial liabilities.
Equity and liabilities | Note | as at Dec 31 2020 | as at Dec 31 2019 |
|---|---|---|---|
| Equity | |||
| Share capital | 21.1 | 495,977 | 495,977 |
| Share premium | 21.2 | 2,418,270 | 2,418,270 |
| Hedging reserve | 21.3 | (48,540) | 5,872 |
| Translation reserve | 63,311 | (8,252) | |
| Other capital reserves | 21.7 | (17,700) | - |
| Retained earnings | 4,427,756 | 4,124,507 | |
| Equity attributable to owners of the parent | 7,339,074 | 7,036,374 | |
| Non-controlling interests | 21.4 | 949,828 | 657,573 |
| Total equity | 8,288,902 | 7,693,947 | |
| Liabilities | |||
| Borrowings | 22 | 3,322,320 | 2,546,003 |
| Lease liabilities | 23 | 355,774 | 367,482 |
| Other financial liabilities | 24,21.7 | 579,438 | 18,357 |
| Employee benefit obligations | 26 | 490,864 | 469,351 |
| Trade and other payables | 27 | 18,609 | 27,252 |
| Provisions | 28 | 211,022 | 204,850 |
| Government grants received | 29 | 196,973 | 193,963 |
| Deferred tax liabilities | 7.4 | 529,419 | 461,124 |
| Total non-current liabilities | 5,704,419 | 4,288,382 | |
| Borrowings | 22 | 193,443 | 205,908 |
| Lease liabilities | 23 | 71,422 | 59,530 |
| Derivative financial instruments | 30.5 | 6,086 | 15 |
| Other financial liabilities | 24 | 670,459 | 554,305 |
| Employee benefit obligations | 26 | 54,863 | 53,270 |
| Current tax liabilities | 70,013 | 44,672 | |
| Trade and other payables | 27 | 3,092,693 | 2,516,567 |
| Provisions | 28 | 40,504 | 37,113 |
| Government grants received | 29 | 14,346 | 13,480 |
| Liabilities directly associated with assets available for sale | 20 | - | 11,502 |
| Total current liabilities | 4,213,829 | 3,496,362 | |
| Total liabilities | 9,918,248 | 7,784,744 | |
| Total equity and liabilities | 18,207,150 | 15,478,691 | |
The consolidated statement of financial position should be read in conjunction with the notes, which constitute an integral part of the full-year consolidated financial statements.
Consolidated statement of changes in equity
Operating cash flows
In 2020, the Group generated positive net cash from operating activities of PLN 2,705,161 thousand, up by PLN 671,727 thousand on 2019.
Consolidated statement of cash flows (PLN ‘000) | Nota | za okres od 01.01.2020 do 31.12.2020 | za okres od 01.01.2019 do 31.12.2019 przekształcone* |
|---|---|---|---|
| Cash flows from operating activities | 506,149 | 558,459 | |
| Profit/(loss) before tax | |||
| Depreciation and amortisation | 765,788 | 811,286 | |
| Impairment losses | 3,230 | 50,624 | |
| (Gain)/loss from investing activities | (876) | 3,872 | |
| Gain on disposal of financial assets | (1,879) | (878) | |
| Share of profit of equity-accounted investees | (14,939) | (12,493) | |
| Interest, foreign exchange gains or losses | 136,890 | 77,124 | |
| Dividends | (127) | (165) | |
| Fair value (gain) on financial assets at fair value | (29,972) | (4,498) | |
| Increase in trade and other receivables | 34 | (235,497) | (153,472) |
| Decrease/(Increase) in inventories and property rights | 34 | 101,940 | (386,203) |
| Increase in trade and other payables | 34 | 1,466,412 | 976,551 |
| Increase in provisions | 9,563 | 53,766 | |
| Increase in employee benefit obligations | 23,106 | 82,314 | |
| Increase in government grants | 3,876 | 63,442 | |
| Other adjustments | 21,037 | (3,541) | |
| Income tax paid | (49,540) | (82,754) | |
| Net cash from operating activities | 2,705,161 | 2,033,434 | |
| Cash flows from investing activities | |||
| Proceeds from sale of property, plant and equipment, intangible assets and investment property | 21,267 | 10,566 | |
| Purchase of property, plant and equipment, intangible assets and investment property | (3,002,934) | (1,049,703) | |
| Dividend received | 7 | 17 | |
| Purchase of other financial assets | (80,004) | (415,462) | |
| Proceeds from sale of other financial assets | 255,289 | 246,030 | |
| Interest received | - | 26,014 | |
| Government grants received | 1,804 | 753 | |
| Repayments of loans | 109 | 109 | |
| Other cash provided by (used in) investing activities | (27,031) | (4,813) | |
| Net cash from investing activities | (2,831,493) | (1,186,489) | |
| Cash flows from financing activities | |||
| Net share capital issue proceeds | 205,172 | - | |
| Dividends paid | (9,447) | (2,695) | |
| Proceeds from borrowings | 923,499 | 217,030 | |
| Repayment of borrowings | (318,054) | (286,477) | |
| Interest paid | (128,627) | (107,629) | |
| Payment of lease liabilities | (64,540) | (56,645) | |
| Repayment of reverse factoring | (954,154) | (695,547) | |
| Other cash provided by (used in) financing activities | 34,21.6 | 600,972 | 12,024 |
| Net cash from financing activities | 254,821 | (919,939) | |
| Total net cash flows | 128,489 | (72,994) | |
| Cash and cash equivalents at beginning of period | 770,087 | 846,532 | |
| Effect of exchange rate fluctuations on cash held | 24,752 | (3,451) | |
| Cash and cash equivalents at end of period | 18 | 923,328 | 770,087 |
* as described in Section 2.2.c.
In accordance with the dividend policy resulting from the updated strategy for 2013−2020, the Company decided not to set the lower limit for the dividend payout ratio and to maintain the upper limit at 60%. The strategy also provided that, in justified cases such as implementation of an extensive investment programme or the risk of an economic downturn, the Management Board may recommend against a dividend payment.
No dividend was paid in 2020. On June 30th 2021, the Annual General Meeting resolved to allocate the entire amount of the Company’s net profit for the financial year 2020, of PLN 125,627,538.01, to the Company’s statutory reserve funds.
Dividends paid out in 2008−2018
| Year for which dividend was paid | Dividend record date | Dividend payment date | Profit earned | Total dividend | Dividend per share |
|---|---|---|---|---|---|
| 2008 | Jun 26 2009 | Instalment 1: Aug 31 2009 | PLN 61,935 thousand | PLN 39,898,749.42 | PLN 1.02 |
| Instalment 2: Nov 6 2009 | |||||
| 2012 | Apr 22 2013 | May 24 2013 | PLN 250,692 thousand | PLN 148,793,226.00 | PLN 1.50 |
| 2013 | Jun 18 2014 | Jul 9 2014 | PLN 44,117 thousand | PLN 19,839,096.80 | PLN 0.20 |
| 2015 | Jun 20 2016 | Jul 11 2016 | PLN 209,055 thousand | PLN 83,324,206.56 | PLN 0.84 |
| 2016 | Aug 4 2017 | Aug 23 2017 | PLN 224,775 thousand | PLN 78,364,432.36 | PLN 0.79 |
| 2017 | Jul 25 2018 | Aug 8 2018 | PLN 354,793 thousand | PLN 123,994,355.00 | PLN 1.25 |
source: Company data
Grupa Azoty S.A.
The Grupa Azoty S.A. share price at the close of trading in 2019 was PLN 29.28, and in the first quarter of 2020 it went down, to reach PLN 16.16 on March 16th 2020. In the second quarter the price rose, to PLN 35 at the beginning of June. The closing price at the end of 2020 was slightly lower than the opening price, at PLN 27.45.
Grupa Azoty share price in 2020
Źródło: Own study based on GWP data.
Grupa Azoty Police
At the beginning of 2020, Grupa Azoty Police shares traded at PLN 10.50. In the first month of the year, the price stabilised at approximately PLN 10.00. At the beginning of March it fell to PLN 7.1, which was followed by a gradual increase, until PLN 15.50 per share was reached at the beginning of June. At the end of June, the price fell slightly, to approximately PLN 12m, and remained close to this level, to rise to PLN 12.20 on December 30th 2020.
Grupa Azoty Police share price in 2020
Grupa Azoty Puławy
On December 30th 2019, the share price of Grupa Azoty Zakłady Azotowe Puławy S.A. was PLN 89.20 per share. At the beginning of 2020, it started to decline, reaching the low of PLN 53.6m in mid March, after which it gradually grew, to PLN 98 at the beginning of June. The closing year-end price was PLN 85.8m, a slight decrease compared with the opening price.
Grupa Azoty Puławy share price in 2020
