Problems of the state giant: Grupa Azoty has been realizing an EBITDA loss every quarter for 2.5 years. In addition, it has a huge debt of PLN 10 billion. Analysts speaking to Business Insider believe that the company's situation is “dramatic”, and contractors, seeing this, demand advance payments for raw materials. The biggest burden for Grupa Azoty is the investment in Polimery Police (currently PDH Polska), whose budget increased more than three times – from PLN 2 to 6.5 billion. And the projected EBITDA profits from the project dropped from PLN 700-1,000 million to PLN 300-500 million in 2025. The reason is worse economic situation for propylene and polypropylenewhich experts warned against.
Problems of the chemical industry: Apart from the worse economic situation, it is problematic for Grupa Azoty no tariffs on fertilizers from Russia and Belarus. Many chemical companies in Europe are in a similar bad situation. This the effect of high gas prices and the burden of emissions taxes, which are not paid by entities outside the EU, which allows them to offer lower prices. Without regulating the issue of customs duties, there is no way to improve the situation of the Azoty Group, says Jakub Szopek, an analyst at Erste Securities.
This is how Grupa Azoty wants to save itself: Vice-President of Azoty, Andrzej Skolmowski, emphasizes that the Group has a recovery plan that will allow 2025 to end in positive terms. This is given hope by the fact that in nine months of 2024, the concern recorded an increase in sales in all segments, and cost optimizations amounted to approximately PLN 350 million. The latter include collective layoffs. From March to November, 800 people lost their jobsamong others 25 percent Siarkopol crew. President Adam Leszkiewicz admitted in September last year in an interview for WNP that within two years the employment reduction would cover several percent of 15.1 thousand. people employed in the company. In his opinion a scenario of laying off 2,000 is possible. people.
The company's restructuring will also include the sale of some assets: The German fertilizer company Compo Expert, purchased in 2018 for PLN 235 million, may go under the hammer. The most important transaction, however, is expected to be resale of part of the shares in the Polimery Police complex. However, these are difficult negotiations because the project has not been completed and may have technological defects. However, the assets may be purchased by another state giant. However, PKN Orlen would have to get a bargain price.
Layoffs and sales are not enough: Analysts believe that collective layoffs and asset sales may not be enough. This will be a condition for the Azoty Group to stay on the market accelerating decarbonization and “improving the position on the cost curve in the area of fertilizers.” It may also be necessary provide a rescue issue of shares.
Read also: : “The Azoty Group is going to the prosecutor's office. It's about PLN 5 million in losses. 'Suspected crime'”
Sources: : Business Insider, CIS, Gazeta.pl