Grupa Azoty H1 2026 EBITDA Hits PLN370M Amid Gas Price Surge

Grupa Azoty SA delivered a significant operational turnaround in the first half of 2026, reporting consolidated EBITDA of PLN370 million. This marked a sharp improvement from the prior year, with the second quarter alone generating PLN274 million in EBITDA, reversing a loss of PLN71 million recorded in the same period of 2025. The financial recovery was primarily fueled by the chemicals division, which benefited from favorable market conditions for technical urea and sulfur.

According to data reported by GN markets/earnings (en-US), the chemicals segment saw revenues climb approximately 50% year over year to around PLN900 million. Segment EBITDA increased by nearly PLN200 million, driven by high pricing environments for key products. While all operating segments showed year-over-year improvement, the agro division contributed PLN86 million to Q2 results, and the plastics unit narrowed its losses despite continued operational challenges.

Chemical Segment Drives Profit Recovery

The strength in the chemicals business offset significant headwinds in input costs. Natural gas prices surged 92% due to geopolitical tensions in the Strait of Hormuz, creating unprecedented volatility in feedstock expenses. Consequently, variable costs rose over 26% year over year, while fixed costs increased slightly due to higher labor expenditures. Despite these pressures, the company maintained uninterrupted production by dynamically optimizing plant operations and adjusting product mix.

The agro segment faced headwinds from lower sales volumes as farmers delayed purchases due to uncertainty over subsidy timing and amounts. In plastics, the company continued to report losses, with production of caprolactam, polypropylene, and polyamide halted as clients suspended operations or reduced purchase volumes amid market instability. The company cited a more supportive EU regulatory environment, including revised ETS policies and CBAM, as factors improving the competitiveness of its EU-produced fertilizers and chemicals.

Restructuring Progress And Asset Sales

Grupa Azoty is advancing its financial restructuring with bank negotiations at an advanced stage. Shareholders have approved the use of asset collateral, and the company plans a share issue to the Treasury, expected to conclude by the end of 2026. A key milestone was the completion of the sale of GA Polyolefins to Orlen, with all regulatory consents obtained and court approval of restructuring plans granted on July 9. The company is now awaiting final approval of the composition.

Management indicated a high likelihood of signing the bank restructuring agreement by year-end, noting that group companies have consented to collateral requirements. An extraordinary general meeting scheduled for September 22 will extend the share issue window to March 2027. However, the company remains burdened by high legal and financial advisory costs associated with the prolonged restructuring process, which are expected to remain elevated until agreements are finalized.

Caution On Third Quarter Outlook

Despite the H1 improvement, the company declined to provide a positive outlook for the third quarter of 2026. Management cited persistent market volatility and a lack of stability in feedstock prices as reasons for a neutral to cautious stance. Social tension remains a factor, as the company stated it cannot meet trade union demands for a PLN1,500 monthly wage increase, citing financial constraints during the restructuring period.

The inability to forecast stable performance for Q3 reflects the ongoing impact of the gas price surge and the competitive landscape in fertilizers and plastics. The company emphasizes that its strategy remains focused on completing the financial restructuring and optimizing operations to withstand cost volatility, rather than on aggressive volume growth in uncertain markets.