Fertiglobe boosts UAE exports to 95% of production but logistics costs hit profit
Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, said it has restored UAE exports to 95 per cent of production in the third quarter, despite continuing disruption at the Strait of Hormuz . That is up from 56 per cent in the second quarter, it said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares trade. Reaching that figure involved extensive…
Fertiglobe, the world's largest exporter of urea and ammonia, has successfully restored UAE exports to 95% of production in Q3, up from 56% in Q2. Despite this progress, higher logistics and freight costs have impacted the company's profit, causing net profit to drop by 90% to $22.7 million for the quarter. Fertiglobe's CEO, Ahmed El Hoshy, attributes the challenge to the effective closure of the Strait of Hormuz, which has disrupted global seaborne fertiliser supply chains.
While the company has been utilising inventory and implementing a focused commercial approach, the costs associated with transporting products have increased. Urea prices have risen significantly, reaching about $720 a tonne, while ammonia prices have cooled to around $430 a tonne. Fertiglobe is investing in cost optimisation programmes, aiming to achieve $30 million in annual non-gas cost savings by the end of 2028.
The company remains cautiously optimistic about the market outlook for ammonia and urea, given the current low inventories and the challenges faced by European plants due to high gas prices.
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