August 24, 2017 / 10:23 AM / a year ago

UPDATE 1-Russia's Phosagro Q2 net profit falls 89 percent year/year

* Net earnings, adjusted for forex items, down 33 pct

* EBITDA falls 25 percent, margin down 8 percentage points

* Higher supply, low season may put pressure on prices (Adds CEO comment, outlook, details, share price)

MOSCOW, Aug 24 (Reuters) - Russian fertiliser producer Phosagro said on Thursday its second-quarter net profit fell 89 percent year-on-year to 1.5 billion roubles ($25.4 million) due to a stronger rouble and lower prices.

Adjusted for non-cash forex items, net profit was down 33 percent at 6.1 billion roubles, while earnings before interest, taxation, depreciation and amortisation (EBITDA) declined 25 percent to 12.2 billion roubles, the company said in a statement.

Phosagro, which competes with other global producers of crop nutrients such as U.S. firm Mosaic, said revenues fell 3 percent year-on-year to 44.7 billion roubles.

EBITDA margin, a measure of the company’s operating profitability, slid to 27 percent, from 35 percent a year earlier.

“During the quarter we saw additional pressure on phosphate prices from higher exports of phosphates from China and the MENA (Middle East and North Africa) region (in particular as a result of the commissioning of a new unit in Morocco in March), which coincided with a delay to the start of the high season in India,” Chief Executive Andrey Guryev said.

Looking to the rest of the year, the company, which exports to Europe, the Commonwealth of Independent States and Latin America, said it anticipated possible further pressure on prices ahead of a low season and increased global supply.

“However, we may see a further rise in phosphate prices this year with the onset of the winter season in Brazil and India and subsequently the spring season in Europe and the U.S.,” Guryev said.

Moscow-listed shares in Phosagro were down 0.8 percent by 1000 GMT, underperforming the broader market index, which was up 0.27 percent. ($1 = 59.1373 roubles) (Reporting by Natalya Shurmina; Writing by Polina Devitt and Maria Kiselyova; Editing by Dale Hudson)

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