Return on sales of nitrogen fertilizer makers

Information agency Credinform offers to get acquainted with the ranking of Russian nitrogen fertilizer makers. The companies with the highest volume of revenue involved in this activity were selected by the experts according to the data from the Statistical Register for the latest available period (for the year 2013). Then, the first 10 enterprises selected by turnover were ranked by decrease in return on sales ratio.

Return on sales ratio is calculated as the relation of operating income (before-tax income) to turnover and is an indicator of the pricing policy of a company, presenting its ability to monitor its costs. Negative values of the indicator testify that expenses of an enterprise exceed revenues from sales of products, what is an unfavorable trend. Recommended value of the indicator varies depending on the industry.

Return on sales and solvency index of the largest Russian nitrogen fertilizer makers, TOP-10
Name, INNRegionTurnover for 2013, in mln RUBReturn on sales, %Solvency index GLOBAS-i®
1 Uralkaly OJSC 
INN 5911029807
Perm territory 96 309 45,03 193 (the highest)
2 Tolyatti azot OJSC 
INN 6320004728
Samara region 37 716 34,42 153 (the highest)
3 Novomoskovskaya aktsionernaya kompaniya Azot OJSC 
INN 7116000066
Tula region 34 966 31,78 153 (the highest)
4 Ob’edinennaya khimicheskaya kompaniya Uralkhim OJSC
INN 7703647595
Moscow 22 783 29,62 280 (high)
5 Zavod mineralnykh udobreny Kirovo-Chepetskogo khimicheskogo kombinata OJSC
INN 4312138386
Moscow 23 043 28,99 196 (the highest)
6 Akron OJSC
INN 5321029508
Novgorod region 33 421 27,59 284 (high)
7 Minudobreniya OJSC
INN 3627000397
Voronezh region 26 585 23,37 198 (the highest)
8 Nevinnomyssky azot OJSC 
INN 2631015563
Stavropol territory 27 770 23,25 189 (the highest)
9 Kuibyshevazot OJSC
INN 6320005915
Samara region 28 045 13,08 173 (the highest)
10 Kemerovskoe aktsionernoe obshchestvo  Azot OJSC
INN 4205000908
Kemerovo region 27 802 12,67 210 (high)

Russian industry sector of mineral fertilizers is one of leading branches in the world. On the volume of production of nitrogen and potash fertilizers domestic manufacturers take the second place in the world, 18,5% from world output is accounted for by them. By that about 70% of products manufactured on the territory of Russia go for export.

Cumulative turnover of the largest TOP-10 Russian nitrogen fertilizer makers made 358,4 bln RUB at year-end 2013.

Return on sales of all TOP-10 companies of this ranking is above 12%, what testifies to high efficiency of this activity and smart policy of company’s management toward production costs. All enterprises of the ranking got a high and the highest solvency index GLOBAS-i®, what testifies to that the mentioned organizations can pay off their debts in time and fully.

itrogen fertilizer makers

Return on sales of Russian nitrogen fertilizer makers, TOP-10

The first three companies of the ranking are as follows: Uralkaly OJSC (value of return on sales - 45,03%), Tolyattiazot OJSC (34,42%) and Novomoskovskaya aktsionernaya kompaniya Azot OJSC (31,78%). The values of return on sales of the leaders of the ranking are above 30%, what testifies to high efficiency of their activity. Besides that, all enterprises got the highest solvency index GLOBAS-i®, what characterizes the mentioned organizations as financially stable.

Return on sales shows, if company’s activity is profit- or loss-making, however, it doesn’t give an answer, how profitable are investments in this enterprise. To provide an answer to this question they calculate other ratios: return on assets and on equity.


See also: Solvency ratio of fertilizers and nitrogen compounds manufacturers




Did the sanctions give a new impulse to industry?

In spite of the sanctions war between Russia and Western countries concerning the situation in Ukraine, the dynamics of industrial production shows as good indicators as any: in the third quarter the growth amounted to 1,5% against 0,6% in the previous year.

The release of goods in manufacturing industry grows most of all - 1,8%, extraction of minerals is up by 1,1%, the sphere of generation and distribution of electricity, gas and water has a positive figure now – 0,4%.

The easing of the situation in industry is observed beginning from the IV quarter of the previous year. Complicated macroeconomic climate and negative external environment didn’t exert a significant impact on the positive dynamic which in itself cannot but please.

industry growth

Figure. The dynamic of the industrial production to the corresponding period of the previous year, %

In this regard, the interest is generated by the economic sectors which were affected by the trade restrictions: above all, the food industry and extraction of gas. However, in this case everything is not that simple. Thus, within 9 months of 2014 (to the corresponding period of 2013) the production of animal meat has grown on 11,4%, poultry meat – 7,4%, sausage products - 6%, cheese – 10,2%, production of milk on the contrary decreased on 0,8%.

Thus, the majority of domestic companies increase the manufacture of the goods being under sanctions. The favorable terms on the market is a certain path to the following import substitution.

A significant decrease of natural gas extraction occurred as it was expected in the fuel and power industry (above all, due to the halt in gas supplies to Ukraine) on 5,4%, and oil extraction increased on 1,2%.

Regardless of the significant ruble devaluation and decline in the oil price in October-November, we expect retaining of the positive figures according to growth in industry on yearly results.