MOROCCO – Morocco’s phosphates and fertilizers giant, OCP Group, stated in its recent financial report that its profit for 2023 dropped by 49% to 14.29 billion dirhams (US$1.4 billion), nearly half of the profit of 28.2 billion dirhams (US$2.8 billion) earned by the group a year earlier.

According to the fertilizer giant, this underperformance mainly stems from a 20% drop in revenues generated by the company, down to 91.3 billion dirhams (US$9 billion) in 2023 from US$11.4 billion a year earlier.

The drop in our revenue is linked to the reduction in the selling prices of our phosphate products [fertilizers, rock, and phosphoric acid] compared to the exceptional prices from which we had benefited during the year 2022,” explained Mostafa Terrab, Chairman, and CEO of the OCP group.

In addition, the company attributes the performance to a drop in prices from the exceptional levels of 2022, when the war in Ukraine triggered a surge in commodities prices globally.

OCP noted that a drop in Chinese phosphate exports and higher demand in the US, Brazil, and India tempered the decline in prices.

Despite facing challenges, OCP Group strengthened its industrial investments, with fertilizers constituting 65% of its earnings in 2023.

While the company also witnessed other expenses (selling costs, administrative expenses, and taxes) eating into its profit, it nevertheless increased its capital expenditure by 34% to 26.2 billion dirhams (US$2.6 billion) in 2023.

Notably, the company intensified its investments in renewable energy, desalination, and soil nutrient production, aiming to bolster its competitive advantage through continuous product innovation and operational efficiency improvements.

“In 2023, we continued the deployment of the second phase of our investment program. The objective of this program is to strengthen the group’s competitive advantage by focusing on continuous product innovation, capacity expansion, and improvement of its operational efficiency,” highlighted Mr. Terrab.

This includes strengthening OCP’s industrial flexibility, investments in solar energy, water management, and green ammonia production, he added.

The group continues to invest in renewable energies and desalination, with two plants meeting the industrial needs of its factories and supplying two adjacent cities, El Jadida and Safi.

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