CEO Ahmed El-Hoshy highlighted the performance of the company, noting that higher production and effective inventory management played crucial roles in achieving these results. Sales volumes for ammonia and urea produced in-house saw significant increases, marking 22% and 1% growth respectively, compared to the previous year. This uptick was facilitated by increased production capabilities and strategic operational adjustments.
The nitrogen fertilizer market has experienced volatility due to shifting energy prices and supply dynamics. Fertiglobe managed to navigate these challenges by optimizing its production processes and maintaining a strong logistical framework. The company has also made significant strides in its cost optimization program, achieving 60% of its $50 million run-rate target by the end of March 2024. The program is expected to be fully realized by the end of the year.
Fertiglobe's focus on technology and innovation has been pivotal in enhancing operational efficiencies. The integration of artificial intelligence (AI) across various facets of its operations has led to improved performance in equipment, processes, and facilities. This digital transformation is not only enhancing efficiency but also contributing to the reduction of emissions, aligning with global sustainability goals.
Despite the positive revenue figures, Fertiglobe's profitability took a hit due to lower nitrogen prices and increased supply from new capacities commissioned in 2022. Adjusted net profit for the first half of 2024 was reported at $177 million, a decrease from previous figures. The company attributed this decline to softer prices in the nitrogen market, which have been influenced by broader economic factors including reduced demand from key markets such as Europe and India.
El-Hoshy expressed confidence in the company's ability to continue its growth trajectory, emphasizing the strategic acquisition by ADNOC, which increased its stake in Fertiglobe to 86.2%. This acquisition is expected to drive further growth and value creation for the company. Additionally, Fertiglobe remains committed to its dividend strategy, with shareholders approving a total dividend payout of $475 million for 2023, reflecting the company's robust free cash generation and healthy balance sheet.
As Fertiglobe looks ahead, its strategic initiatives, including continued investments in technology and ongoing cost optimization efforts, are poised to position the company favorably in the global nitrogen fertilizer market. The company's strong operational foundation and commitment to innovation will be key drivers in navigating the complexities of the market and achieving sustainable growth.