The net loss in 2023 amounted to PLN 3.29 billion and the EBIT loss amounted to PLN 3.6 billion.
In the fourth quarter of 2023 alone, Grupa Azoty generated consolidated sales revenue of PLN 3,083 million and an EBITDA result of minus PLN 10 million, with an EBITDA margin of minus 0.3%. The net loss for the fourth quarter of 2023 is PLN 1.449 billion.
The total impact of impairment losses on non-financial fixed assets made as a result of impairment tests resulted in a decrease in the consolidated EBIT of the Azoty Group for the fourth quarter of 2023 by PLN 1,562 million.
“In the reporting period, the prices of gas and most key raw materials, especially in relation to the dynamic fluctuations in 2022, stabilized, which forced a decline in the prices of the Azoty Group's products. The financial results were also influenced by unfavorable global macroeconomic conditions, including the lack of a significant recovery in many sectors of European and global economies and inflation, especially high at the beginning of 2023. Demand in the main markets was insufficient to ensure a profitable level of production, although it gradually improved during 2023. At the same time, Grupa Azoty did not take effective steps to optimize production,” it said in a press release.
As reported, the Azoty Group's results in 2023 were determined primarily by the company's lack of adjustment activities to the increasingly demanding market conditions.
“The first signs of unfavorable market trends were visible already in 2022, and in June last year, Grupa Azoty submitted a request to financial institutions to waive the application of selected covenants. Despite a clear deterioration of financial results, in the following quarters the company did not develop a comprehensive corrective action program “This resulted, among other things, in a weakened relationship with the market and the persistence of high production costs resulting from excessive gas purchase costs in relation to market prices,” it was written.
President Adam Leszkiewicz, who was appointed to the position at the end of March, assessed that the past year was a period of many market challenges for the chemical industry, which Grupa Azoty was not prepared for over the last few years.
“The most urgent task ahead of us is to finalize the work on the recovery program and implement it within the entire capital group. We hope that in the coming weeks we will be able to start this process, after obtaining the approval of financial institutions,” said the president.
“The next priorities include updating the strategy and defining a real concept of decarbonization activities. The minimum level of advancement of work on projects under +Green Azoty+ in 2021-2023 means that we must develop solutions as quickly as possible that will allow Grupa Azoty to effectively compete with producers who are already taking ambitious steps towards greening production. An important task will also be the full commercial launch of Polimery Police – an investment that has significantly strained the Group's financial capabilities,” he added.
Leszkiewicz informed that at the same time, the management board is carrying out intensive activities to optimize production and sales in all segments, and is also preparing a package of development projects.
The EBITDA margin of the Agro Segment generated in the fourth quarter of 2023 improved compared to the fourth quarter of 2022 and amounted to 5.5%. The EBITDA margin of the Chemicals Segment was 2.7%. Segment results were reduced by impairment losses. The activities of the Plastics Segment recorded an EBITDA margin of minus 79.8%, determined primarily by the impact of high installation startup costs incurred by the subsidiary, Grupa Azoty Polyolefins. (PAP Business)
