Audited IFRS Financial Statements for 2008

28.04.2009
Uralkali has today published its report and financial statements for 2008 prepared in accordance with the IFRS and audited by ZAO PricewaterhouseCoopers Audit. The following are selected highlights:

- Revenue was up 113%1† to 62.8 billion rubles;
- Net revenue2† was up 140% to 54.3 billion rubles;
- Adjusted EBITDA3† was up 242% to 41.3 billion rubles;
- Adjusted EBITDA margin4† increased to 76%, compared with 53% in 2007;
- Net profit was up 172% to 21.9 billion rubles;
- Output of potash muriate fell 6.3% to 4.8 million tones;

- Total capital expenditure grew by 127% to 14.3 billion rubles. The company reinvested its profit into two principal areas: modernization and maintenance of its existing production and construction of new production facilities. Uralkali’s main projects included investment in output expansion at Mine 4, creation of the company’s own power generation facilities, and development of its infrastructure;

- At the General Meeting of Shareholders, held in September 2008, the shareholders approved interim dividends of 8.49 billion rubles, due to the positive potash market environment and growth outlook;

- In 2008, the company created a 7.8 billion ruble provision for future cash outflows associated with the flooding at Mine 1. The provision includes social responsibility-based voluntary compensation of the following amounts: 2.3 billion rubles as expenses incurred by the government in connection with the resettlement of residents, approximately 0.5 billion rubles for reimbursement of expenses incurred by Russian Railways in connection with the construction of a 6-kilometer bypass railroad, 36 million rubles for reimbursement of expenses incurred by Berezniki municipal budget and 5 billion rubles as a partial compensation to Russian Railways of the financing deficit relating to the construction of a 53-kilometer railroad line. On April 23 the company has paid 2.3 billion roubles to the budget of Perm territory. Over 1.8 billion roubles out of this amount will be allocated to reimburse the expenses of the federal government to manage the consequences of the accident and around 494 million roubles to compensate the costs incurred by the Perm territory in regards to the Mine 1 accident.

For the complete review of the company’s financial performance please refer to the full 2008 report and consolidated financial statements, available on Uralkali’s website at www.uralkali.com.

Vladislav Baumgertner, CEO, Uralkali:

“The favorable situation in the world potash market during the first three quarters of 2008 enabled Uralkali to achieve substantial growth in its financial performance for the whole year compared to 2007. However, in the fourth quarter of 2008 the company faced a decrease in demand for its products in some markets and reacted by reducing its utilization rate to 25 percent. In 2009, we are continuing to see lower demand from our key customers and, consequently, run our plants at a utilization rate that is materially lower than usual. Prospects for the revival of demand remain unclear, but we believe that the potash industry will be one of the first sectors to recover from the global downturn.”


† _______________________________

1All percentage changes reflect the difference between 2007 and 2008 results
2 Net revenues are adjusted revenues (revenues less freight, railroad transportation and transshipment costs)
2 Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding expenses associated with the mine flooding†
4 Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenues
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Cardinal rules

Smoking in mines is prohibited.
Work at heights without wearing a safety harness is prohibited.
Work in electrical installations under voltage is prohibited.
It is forbidden to perform work and stay in the bottomhole zone during the operation of the mining machine.
Loading and unloading operations when people are in the danger zone are prohibited.
Working in underground mines with unsecured and/or unassembled roofing is prohibited.
It is forbidden to carry out repairs and maintenance of conveyors without disconnecting from energy sources, use of conveyors for transfer of people and goods (materials and/or equipment), crossing (either above or under) operating conveyors by employees are not allowed.
It is forbidden to carry out welding and flame work in underground mines and mine buildings without the necessary safety measures preventing fire.