Annual Report 2011   English  |  Russian

Chairman's statement


Dear Fellow Shareholders,

The reporting year 2011 has proven once again the effectiveness of our business model. The Group posted all-time record financial performance thanks to a combination of high production efficiency and a favourable market environment in the mineral fertiliser segment. In 2011, net profit reached RUB 20.33 billion, allowing the Group to allocate over RUB 10.55 billion in the form of investments and capital expenditures to further development, in addition to paying RUB 6.15 billion (approximately 30% of net profit) as interim dividends to our shareholders. The Group’s debt burden has decreased and the net debt to EBITDA ratio was 1.6, down from 2.7 in 2010. This rate is quite comfortable and enables Acron Group to conduct further fundraising to implement its investment projects. The potential of the global mineral fertiliser market remains enormous. As global demand keeps growing, Acron is trying to make the most of the industry’s fundamental trends to increase its production volume. We feel certain that new capacity is required and will be utilised.

The Group is entering a new stage of evolution due to all our recent achievements. The formation of Acron Group as it exists today started 20 years ago. In this relatively short period of time, a local player (one of the major mineral fertiliser producers in the former USSR) transformed itself into a vertically integrated holding company with assets in six countries. Once we obtain our own phosphate inputs in 2012, we will add the missing element to our vertically integrated structure (raw material extraction – processing – logistics – distribution). This is just the first step for Acron Group. In future, we will construct mines at potash deposits and further develop our phosphate project. We will continue implementing a comprehensive investment programme with an estimated total CAPEX of USD 4 billion for 2005-2020.


In 2012, our flagship production facility Acron (Veliky Novgorod) celebrates its 45th anniversary. This jubilee is marked by two important events. First, in late March 2012, a new 335,000-tpa urea unit was launched. Second, in 2012 Acron will start the construction of a new Ammonia-4 unit. The Company intends to invest USD 400 million into this project. Commissioning of the 700,000-tpa unit in 2015 will be a milestone, creating the conditions for further diversification of our product portfolio and expansion of processing capacity.

The Group’s Board of Directors made a major achievement which increased the Group’s investment appeal when it completed a complex corporate procedure to eliminate the cross-shareholding between Acron and its subsidiary Dorogobuzh. Following a multi-stage procedure that took almost two years, the extraordinary general meeting held in February 2012 approved the proposal of the Board of Directors to reduce the Company’s authorised capital by 15%. A settlement of the dispute between Acron and Yara International ASA with respect to their joint venture, Nordic Rus Holding, and the exchange of a stake in Apatit for shares of the Group constituted an important part of this process. By reducing its authorised capital, the Group has virtually paid back its shareholders the value of their financial investments – the value of Apatit’s stake and the block of own shares.

On behalf of Acron’s Board of Directors, I would like to express our appreciation to shareholders for their trust and support of Acron Group’s ambitious investment plans and to the members of our management team and employees for their hard and fair work making all these plans executed success.

Alexander Popov
Chairman of the Board of Directors
20.33 bn
Net profit (RUB)
10.55 bn
Investments and capital expenditure (RUB)