Financial performance

Revenue for 2022 grew by 35.4% y-o-y and amounted to RUB 569.5 bln. The growth was associated with increased sales volumes driven by higher mineral fertilizer output. A large-scale programme to upgrade existing production facilities and build new ones helped the Group achieve a significant improvement in equipment productivity.

Higher average sales prices on global markets and a shift in the sales mix towards a greater share of higher-margin fertilizers, which are consistently popular among farmers, also contributed to the revenue increase.

In 2022, cost of sales grew by 22.9% y-o-y to RUB 269 bln, mainly on the back of higher sales volumes and increased prices for key feedstocks.

Raw materials costs added 70.5% y-o-y and  amounted to RUB 108 bln as a result of a significant increase in the global prices for all key inputs, including sulphur and sulphuric acid, potassium, ammonium sulphate and natural gas.

Despite the higher costs, PhosAgro remains one of the industry's most efficient players and leads the pack globally in terms of production costs. The main way we ensure effective cost control is by sourcing the key inputs and materials from domestic suppliers.

Capital investments (including capitalised repairs) for the year amounted to RUB 63 bln and were mainly focused around completing the construction of a large production facility in Volkhov, developing the ore and raw material base in Kirovsk, developing production capacities in Balakovo, and maintaining production facilities across all process stages, from mining and processing of raw materials to producing finished products.

Net debt as at 31 December 2022 increased y-o-y to RUB 180.3 bln. At the 2022 year-end, our net debt to adjusted EBITDA ratio went down to 0.68x from 0.8x as at 31 December 2021, primarily thanks to EBITDA growth.

Our commitment to maintaining high credit quality and ensuring timely debt servicing continues to be a priority for the Company.

In 2022, PhosAgro’s Board of Directors approved the Company’s Tax Strategy. Our approach to taxation was developed in accordance with the Company’s Strategy to 2025 and combines social responsibility for developing and maintaining the well-being of regions across PhosAgro’s footprint, minimising tax litigation risks, and maximising the use of the Company’s leverage toolkit stipulated by law for actively investing companies, in particular Investment Protection and Promotion Agreements and Special Investment Contracts.

Our approach to tax management, participation in shaping government tax policy, and organisational arrangements pertaining to the exercise of tax functions at PhosAgro is described in the Company’s Tax Strategy.

For the list of tax jurisdictions where the entities included in the Group’s consolidated financial statements are resident for tax purposes, and the details of taxes payable in each jurisdiction, please see page 394. In March 2022, the Group lost control over all of its foreign subsidiaries, therefore the 2022 figures for these companies in the table above are presented for the period before the loss of control.