Sunday , January 24 2021

OCP: controlled performance?



The difficult context, characterized by the economic and financial crisis, did not get the best out of the results of the global fertilizer producer. In any case, this is evidenced by its operational performance. It relied in particular on its competitive advantages, its huge international presence, as well as its industrial and commercial flexibility.

At the end of September 2020, the OCP group showed stable operating results and significantly improved margins, despite the current pandemic context that led to a fall in international prices. Achievements based on the competitive advantages of the group, its huge international presence as well as its industrial and commercial flexibility. “The positive performance of the OCP since the beginning of the year confirms the firm core principles of the group, as well as its ability to overcome difficult and uncertain market conditions associated with the pandemic. Indeed, our industrial flexibility has allowed us to adapt our production to meet the specific needs of our customers. Our commercial flexibility gives us access to a large customer base in areas of high demand. “Finally, our cost leadership has helped us maintain a stable margin,” said Mostafa Terrab, OCP CEO. It shows a turnover of 41.6 million dirhams, which is almost the same level as last year, despite the fall from one year to the next in the prices of all combined products. DAP prices alone have fallen by more than 15% internationally. These price levels were also offset by the high volume of fertilizer and rock exports.

“Turnover is generally stable, thanks to the significant increase in the volume of fertilizer exports, mainly to India, Latin America, Europe and to a lesser extent Africa. Demand from large import regions is due to a number of factors, including Brazil’s favorable agricultural economy, an excellent level of consumption in India, and increased consumption in Ethiopia and Nigeria through increased application of specific products. . “The variety of our exports shows the unrivaled geographical footprint of OCP and the diverse portfolio of customers we serve,” explains Terrab.

However, this fall in prices, which also affected the goods, was on the other hand beneficial for the group. OCP has proven to be particularly effective at the operational level thanks to the continuing decline in sulfur and ammonia prices. These have reached particularly low levels due to the high stocks resulting from the increase in global production capacity. Having moderated the decline in selling prices of all OCP product categories, this drop in sulfur prices also allowed the group to generate a gross margin of 26.82 billion dirhams at the end of September 2020 compared to 26.98 billion dirhams in September. 2019. Thanks to these cost control efforts combined with business excellence initiatives, the group’s EBITDA increased by 4% at the end of September 2020 to MAD 13.6 billion, with a fixed EBITDA margin of 33%. The operating result, in turn, fell to MAD 4 billion from MAD 6.62 billion in 2019, mainly affected by the non-recurring charge of MAD 3 billion on the OCP contribution to the Fund. Special Covid in the second quarter of 2020. Due to the context of a global pandemic and the uncertain economic environment, the OCP group remains vigilant and intends to rely on the performance management system. This will allow him to maintain his financial health while monitoring the risks. However, despite the ongoing pandemic, the group’s outlook for 2020 remains favorable. Thus, in the absence of significant future effects from the Covid-19 pandemic, the year 2020 presents positive forecasts for the end of the financial year.

Aida Lo / Eco Inspirations




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