GrowHow’s profits dive as prices decline
CHESHIRE fertiliser giant GrowHow UK saw profits plummet by 72% last year following a sharp decline in trade prices.
Newly-filed accounts for the business, owned by Norway’s Yara International and US-based Terra Industries, show sales fell 47% to £315.6m causing a drop in pre-tax profits from £135m to £38.9m.
“The profit reduction reflected a 47% decrease in turnover from £600m to £315.6m as a result of a downturn in the fertiliser market and a significant reduction in selling prices from the high levels seen in 2008,” said the directors in their report.
But GrowHow maintained its margins as lower energy prices and manufacturing cost savings helped drive down unit costs. The company has cash of £57m and no debts but is close to completing negiotiations with HSBC for a three-year extension to a £40m revolving credit facility.
“The business forecasts show continuing strong profitability and healthy cashflows,” said the directors. “The assumptions used include a continuing strong demand for fertilisers, an attractive gas price based on sufficient availability of gas supplies and cost savings generated as a result of various cost efficiency measures.”
GrowHow has its headquarters and an ammonia manufacturing plant at Ince, near Chester, where around 400 of the company’s 576 staff work. It has another production facility in Billingham, Stockton on Tees. During the year the group’s pension liability increased from £36.3m to £52.8m.
