Debt management

The Company uses a conservative approach to leverage and believes that a comfortable net debt/EBITDA ratio should be below 2x. As at 31 December 2024, the Company’s leverage was comfortable, with the net debt/EBITDA ratio standing at 1.84x.

When determining its borrowing requirements, the Company assesses the cost of borrowing from banks and public debt markets, the amount and maturity available while striving to ensure that this fits into the Group’s long‑term debt reduction strategy. The choice of the currency of borrowings is based on the availability of currencies and the structure of the Company’s revenue, with almost 67% of total amount denominated in foreign currency in 2024.

In line with the investment policy designed to meet PhosAgro’s investor obligations and strengthen its investment case, the investment budget shall not exceed 50% of planned EBITDA.

One of the events after the reporting date that had an impact on the Company’s debt profile was the January 2025 redemption of the USD 500 mln Eurobond issue. This redemption was executed in full across both the Russian perimeter and outside of it.

The record high capital investments and charitable expenses in 2024 did not affect the Company’s leverage, which remained comfortably below the net debt/EBITDA target.

Alexander Sharabaika Deputy CEO for Finance and International Projects at PhosAgro

In 2024, we successfully completed three bond offerings, generating strong interest from both institutional and private investors.

In June, PhosAgro issued a USD 100 mln five‑year exchange‑traded bond with settlements in roubles. Despite heightened volatility in the Russian capital market, which saw several other issuers cancel their offerings, we managed to reduce the initial coupon guidance by 25 bps to 6.25%. This transaction aligned perfectly with PhosAgro’s debt policy of securing financing in foreign currencies.

In September, we launched our debut issue of rouble‑denominated exchange‑traded bonds with a variable coupon, totalling RUB 35 bln with a two‑year maturity. The coupon rate was set as the Bank of Russia’s key rate plus a spread of 110 bps. Strong investor demand enabled us to reduce the initial spread guidance by a total of 30 bps, achieved through three consecutive reductions. This offering became the largest placement among corporate issuers in the Russian market.

In November, we completed another bond offering – a five‑year exchange‑traded bond totalling RUB 20 bln, with a variable coupon and a put option in two years. The coupon rate was set as the Bank of Russia’s key rate plus a spread of 200 bps. We secured these terms thanks to our established track record of successful public offerings and our premium credit rating.

All offerings were executed on the most favourable terms aligned with prevailing market conditions. The proceeds were used to support our investment programmes and refinance our existing loan portfolio.