- Revenue increased to US$ 663 million from US$ 472 million in the first half of 2009
     - Operating profit increased to US$ 83 million from US$ 9 million in the first half of 2009
     - Adjusted EBITDA increased to US$ 137 million from US$ 72 million in the first half of 2009
     - Net loss amounted US$ 13 million compared to a net loss of US$ 56 million in the first half of 2009

Moscow, Russia – 19 October, 2010 – URALCHEM Holding P.L.C. (“URALCHEM Holding” or “the Company”), a company incorporated in Cyprus and the holding company for URALCHEM Group (“the Group”), one of the largest producers of nitrogen and phosphate fertilizers in Russia, today announces its unaudited IFRS financial results for the six months ended 30 June, 2010.

URALCHEM key financial results for the six months of 2010 and 2009 (millions of US$)

Dmitry Osipov, Chief Executive Officer of URALCHEM OJSC (as a part of URALCHEM Group), commented on the Company’s first half of 2010 results: “URALCHEM demonstrated significantly improved results in the first half of 2010 due to a global favorable economic climate and recovery in mineral fertilizer market’s demand. Due to the flexibility of manufacturing enterprises facilities URALCHEM had the opportunity to redirect the production capacities from compound to straight type of fertilizers.  This has enabled us to achieve targeting business goals and realize approved company’s strategy.

Thanks to strong and positive improvements on the global fertilizer markets in the first half of 2010 Company’s revenue grow by 40% year-on-year to US$ 663 million. Our Adjusted EBITDA likewise increased by 90% to US$ 137 million within the six months of 2010.

Financial Results

In the first half of 2010 URALCHEM’s revenue increased to US$ 663 million compared to US$ 472 million in the corresponding period of 2009. The Company’s operating profit amounted to US$ 83 million or 13% of the revenue, compared to operating profit of US$ 9 million, or 2% of the revenue in the first half of 2009.

In the first half of 2010 URALCHEM’s net loss amounted US$ 13 million compared to a net loss of US$ 56 million in the first half of 2009.

The Company’s Adjusted EBITDA increased to US$ 137 million in the first half of 2010, compared to US$ 72 million in the first half of 2009 or demonstrated 90 % increase from the same period of the previous year. URALCHEM achieved Adjusted EBITDA margin of 21% in the first half of 2010 compared to 15% in the first half of 2009.

Markets

URALCHEM’s exports amounted to US$ 452 million in the first half of 2010 compared to US$ 341 million in the first half of 2009. In total volume terms, 60% of sales in the first half of 2010 were export sales.

Fertilizer prices continued to rise after having fallen precipitously as a result of the global financial crisis of 2008-2009. Prices for ammonium nitrate, one of URALCHEM’s key products, rose to an average of US$ 215/tonne (FOB Black Sea) during the first half of 2010. Realized prices for phosphate fertilizers, DAP and MAP, increased up to US$ 445/tonne (FOB Baltic Sea).

Production Results

UralChem’s production volume increased by 13% year-on-year to 2.494 million tonnes within the first six months of 2010 compared to the corresponding period of 2009.

Ammonium nitrate production volumes increased by 7% during the period, commercial ammonia production rose by 85%, DAP and MAP by 255%. Thus, the production volume of compound fertilizers decreased by 13% due to general market’s demand reduction.

The Company achieved positive results due to smooth and positive improvements on the global fertilizer markets, recovery in fertilizer consumers’ demand and flexible model of manufacturing enterprises facilities.

URALCHEM production volumes within the six months of 2009 and 2010 (tonnes)

Dmitry Osipov, Chief Executive Officer of URALCHEM commented on sales achievements for the first half of 2010: “All URALCHEM’s production facilities are functioning in accordance with its full capacity level and approved production plans. During 2010 we are strictly planning to increase the production’s volume of mineral fertilizers to 7.5-8% in comparison with the corresponding period of 2009 – up to 4.8 million tonnes. We definitely intend to increase production’s volume year by year to achieve production’s level capacity of 5.5 million tonnes in 2014. 

Financial position

Cash flow from operating activities (before tax and interest paid) in the first half of 2010 amounted to US$ 129 million compared to US$ 44 million in the first half of 2009.

As of 30 June, 2010, the Company’s net debt totaled US$ 1, 343 million. The weighted average interest rate for the Company’s debt portfolio in the first half of 2010 was 9.6%, compared to 10.8% weighted average for the corresponding period of the previous year.

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For further information, please refer to old.uralchem.com or use the following contacts:

Public Relations Department
URALCHEM OJSC
Tel: +7 (495) 721-8989
pr@uralchem.com

URALCHEM Holding P.L.C. is the holding company for URALCHEM Group which primarily consists of three mineral fertilizer production facilities in Russia. The Group is one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS with production capacities of over 2.5 million tonnes of ammonium nitrate, 2.2 million tonnes of ammonia, 0.8 million tonnes of MAP and DAP, 0.8 million tonnes of compound fertilizers and 0.5 million tonnes of urea. UralChem Group’s three production facilities are located in the European part of Russia and include Kirovo-Chepetsk Chemical Works ("KCCW"), based in Kirovo-Chepetsk in the Kirov region; Azot ("Azot"), located in Berezniki in the Perm region; and Voskresensk Mineral Fertilizers ("VMF"), situated in Voskresensk in the Moscow region.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might", the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, as well as many other risks specifically related to the Company and its operations.

APPENDIX TO PRESS-RELEASE ON THE SIX MONTHS OF 2010 UNAUDITED FINANCIAL RESULTS

“EBITDA” represents profit or loss from continuing operations for the period before income tax expense, interest expense, interest income and depreciation and amortisation. “Adjusted EBITDA” represents EBITDA for the period before impairment of goodwill, share of profit/ loss of associates, foreign exchange gain/loss from financing activities and net gain/loss from derivative financial instruments. Adjusted EBITDA equals operating profit before depreciation and amortisation and net gain/loss from derivative financial instruments. Depreciation and amortisation are components of both cost of sales and selling, general and administrative expenses under IFRS. EBITDA and Adjusted EBITDA are not measures of financial performance that are required by, or presented in accordance with, IFRS. Accordingly, they should not be considered as alternatives to profit for the period as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Our calculation of EBITDA and Adjusted EBITDA may be different from the calculation used by other companies and therefore comparability may be limited. We believe that EBITDA and Adjusted EBITDA provide useful information to investors because they are indicators of the strength and performance of our ongoing business operations and indicators of our ability to fund discretionary spending such as capital expenditures, acquisition of subsidiaries and other investments and our ability to incur and service debt. While depreciation and amortisation are considered operating costs under IFRS, these expenses primarily represent non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods.

Adjusted EBITDA reconciliation for the six months of 2010-2009 (thousands of US$)