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Azoty Group preparing contingency scenarios in connection with Russia’s aggression towards Ukraine

by DignityNews.eu
The Azoty Group is preparing contingency scenarios in the event of a need to limit production if the supply of natural gas is decreased. “Currently, deliveries are proceeding smoothly”, informed the company that assessed the risks associated with Russia’s aggression towards Ukraine.

The Azoty Group sees four areas of potential risk related to the Russian aggression, which may affect the future results of this capital group. The diagnosed threats includes disruptions in gas supplies, problems with the price and availability of strategic raw materials, risk related to the investment schedule and an increased risk of an increase in interest rates.

In terms of prices and availability of strategic raw materials, this risk is concerning the supply of propylene and potassium salt. The disruptions may also result in the unavailability of other raw materials, but the group does not yet see a significant risk in securing supplies from alternative sources.

The Azoty Group also takes into account the potential risk that may affect the schedule of implementation of investment projects due to possible difficulties related to the unavailability or limited availability of employees as a result of the general mobilization in Ukraine. The company’s analysts also note a risk of increasing interest rates (which means higher loan costs) and a weakening of the PLN exchange rate.

The Azoty Group ranks second in the European Union in terms of the production of nitrogen and compound fertilizers. Its consolidated sales revenues reached PLN 10.52 billion in 2020. In 2021, the share of Grupa Azoty’s sales in the territory of Ukraine accounted for 2.2% of the consolidated revenues of the group. It mainly concerned the sale of mineral fertilizers.

The group’s sales to the markets of Russia and Belarus did not exceed 1% of consolidated revenues. Currently, Azoty Group does not sell products to these two countries.

Arkadiusz Słomczyński

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