OCI N.V. (\u2018OCI\u2019 or \u2018Company\u2019) was established on 2 January 2013 as a public limited liability company incorporated under Dutch law, with its head office located at Honthorststraat 19, Amsterdam, the Netherlands. OCI is registered in the Dutch commercial register under no. 56821166 dated 2 January 2013. The consolidated financial statements comprise the financial statements of the Company, its subsidiaries (together referred to as the \u2018Group\u2019) and the Group\u2019s interests in associates and joint ventures.
The Group is primarily involved in the production and distribution of hydrogen-based and natural gas-based products.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). The consolidated financial statements have been prepared on the historical cost convention, except when otherwise indicated.
The financial year of the Group commences on 1 January and ends on 31 December. The Company\u2019s functional currency is the Euro (\u2018EUR\u2019). The Group presentation currency is the US dollar, as the Group\u2019s major foreign operations have the US dollar as their functional currency. All values are rounded to the nearest tenth of a million (in millions of USD), except when stated otherwise.
These financial statements have been authorized for issue by the Company\u2019s Board of Directors on 22 March 2023. These consolidated financial statements are subject to adoption by the Annual General Meeting of Shareholders.
OCI is committed to environmental principles integrated into our strategic objectives. These strategic objectives include a commitment to 20% green house gas intensity reduction by 2030 in comparison to 2019 and carbon neutrality by 2050 as well as 100% purchased electricity from renewable sources by 2030.
For OCI\u2019s decarbonization roadmap, refer to section Decarbonization roadmap and for the latest environmental performance, refer to section Environmental performance.
The impact of this climate roadmap has been considered when preparing these consolidated financial statements. For more information, refer to note 5 Critical accounting judgment, estimates and assumptions.
The Group has applied the accounting policies set out in note 3 consistently over both periods presented in these consolidated financial statements.
The consolidated financial statements include the financial statements of OCI, its subsidiaries and the Group\u2019s interests in associates and joint ventures.
Subsidiaries are all companies to which OCI is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. When the Group ceases to have control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture. Any resulting gain or loss is recognized in profit or loss including related cumulative translation adjustments accumulated in other comprehensive income. If it becomes an associate or joint venture, the interest retained is subsequently measured in accordance with the equity method. The principal subsidiaries are listed in note 34.
Intra-group balances and transactions, and any unrealized income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investees. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Non-controlling interests is presented as a separate component in equity. \u2018Profit or loss\u2019 and \u2018Total comprehensive income\u2019 attributable to the non-controlling interests are presented as a separate line item in the consolidated statement of profit or loss and other comprehensive income. Non-controlling interests is measured at its proportionate share of the acquiree\u2019s identifiable net assets at the balance sheet date. Changes in Group\u2019s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Associates are those companies in which the Group exercises significant influence, but does not have control over the financial and operating policies, and are presumed to exist when the Group holds 20% to 50% of the shareholding and related voting rights of the other entity. Associates are accounted for under the equity method. The Group\u2019s share of profit or loss of an associate is recognized in profit or loss from the date when significant influence begins up to the date when that influence ceases.
Investments in associates with negative shareholder\u2019s equity are impaired and a provision for its losses is recognized only if the Group has a legal or constructive obligation to cover the losses. Equity changes in investees accounted for under the equity method that do not result from profit or loss are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group\u2019s interest in associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Unrealized gains on transactions between two associates are not eliminated.
Investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations of each investor. Those joint arrangements that are assessed as joint ventures are accounted for using the equity method. Joint operations are accounted for using line by line accounting. Joint ventures are accounted for under the equity method. Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted subsequently for the Group\u2019s share in the post-acquisition profit or losses and movements in comprehensive income.
When the Group\u2019s share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any long-term interest that, in substance, forms part of the Group\u2019s net investment in joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date, fair value of the assets and liabilities assumed and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the classification of particular financial assets and financial liabilities assumed as, at fair value through profit or loss, or at amortized cost or as a financial asset measured at fair value through other comprehensive income. The Group makes an assessment of whether embedded derivatives of the acquiree should be separated from their host contracts. If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or other comprehensive income, as appropriate.
The consideration transferred in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The Group recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree.
Changes in the fair value of consideration that are not measurement period adjustments shall be adjusted as follows:
Contingent consideration classified as equity shall not be remeasured.
Other contingent consideration shall be measured at fair value with changes recognized in profit or loss.
The financial statements of subsidiaries and joint operations are prepared in the currencies which are determined based on the primary economic environment in which they operate (\u2018the functional currency\u2019). Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the transaction dates. At each balance sheet date, monetary items denominated in foreign currencies are revalued into the entity\u2019s functional currency at the then prevailing closing-rates.
Exchange differences arising on the settlement and translation of monetary items are included in profit or loss for the period except when deferred to other comprehensive income for financial assets at fair value through other comprehensive income and the effective part of qualifying cash flow hedges.
Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than the US dollars are translated into US dollars using the exchange rates prevailing at the balance sheet date. Income and expense items are translated using exchange rates prevailing at the date of the transactions. Investments in joint ventures and associates with a functional currency other than the US dollars are translated into US dollars using exchange rates prevailing on the balance sheet date. Exchange rate differences arising during consolidation and on the translation of investments in subsidiaries, joint arrangements and associates and monetary items that form part of net investments are included in other comprehensive income, as \u2018Currency translation differences\u2019.
When a foreign operation is (partly) disposed of or sold, (the proportionate share of) the related currency translation differences that were recorded in other comprehensive income are recycled to profit or loss as part of the gain or loss on disposal or sale. Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are considered as assets and liabilities denominated in the functional currency of the foreign subsidiary.
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, at fair value through profit or loss (\u2018FVTPL\u2019) and at fair value through other comprehensive income (\u2018FVOCI\u2019).
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Trade and other receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analyzed the contractual cash flow characteristics of those instruments and concluded that they meet the \u2018hold-to-collect\u2019 business model criteria for amortized cost measurement. Interest income from these assets is included in finance income using the effective interest rate method. Any gain or loss on derecognition is recognized directly in profit or loss.
The Group sells certain trade receivables under a securitization agreement to a third party. For these selected debtors the Group will use the \u2018hold-to-collect-and-sell business model\u2019 as defined under IFRS 9 and will measure these receivables going forward at FVOCI.
Derivative financial instruments held by the Group are classified in the category FVTPL, unless the instrument is designated in a hedge relationship and the hedge meets the requirements for hedge accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
Equity investments, previously recognized as available-for-sale assets, are measured at FVOCI, based on the irrevocable election made by the Group. The Group elected this approach as these investments are not held for trading. Movements in the carrying amount are recognized in other comprehensive income, except for the recognition of impairment gains and losses, interest income and foreign exchange gains and losses which are recognized in the profit or loss. On derecognition the cumulative gain or loss recognized in other comprehensive income is not reclassified from equity to profit or loss. Dividend income is recognized in profit or loss when the Group\u2019s right to receive payment is established.
The Group has physical purchase contracts in place to procure natural gas for its production activities. These contracts are not accounted for as financial instruments if they meet the criteria for the own use exemption. The own use exemption applies to contracts that are entered into and continue to be held for the receipt of a non-financial item in accordance with the Group\u2019s expected purchase, sale or usage requirements and do not have a past practice of being net cash-settled.
When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of changes in the fair value of a derivative or foreign exchange gains and losses for a non-derivative is recognised in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognised immediately in profit or loss. The amount recognised in other comprehensive income is fully or partially reclassified to profit or loss as a reclassification adjustment on disposal or partial disposal of the foreign operation, respectively.
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.
Financial liabilities, like loans and borrowings and trade and other payables, are measured at amortized cost, unless the financial liability:
Is a derivative at FVTPL;
Arose from the transfer of a financial assets that does not qualify for derecognition or if the continuing involvement approach applies;
Is a financial guarantee contract;
Is a commitment to provide a loan at a below-market interest rate; and
Is a contingent consideration resulting from a business combination to which IFRS 3 applies, measured at FVTPL.
The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses. The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit definitions from agencies (Standard & Poor\u2019s). Exposure within each credit risk grade are segmented by geographic region classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past seven years (if possible). These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which historical data has been collected, current conditions and the Group\u2019s view of economic conditions over the expected lives of the receivables.
For the assessment of loss allowance for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected life of the financial asset, i.e., the difference between:
The contractual cash flows that are due to an entity under the contract; and
The cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and forward-looking information is assessed. Expected losses on trade receivables are recognized on a separate line item in the statement of profit and loss, if any.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition. If at the reporting date, the credit risk of other receivables has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Derivative financial assets are measured at fair value and the Group investigates whether the counterparty\u2019s creditworthiness gives rise to an impairment. When determining the fair value, credit value and debit value adjustments are taken into account.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less from the acquisition date (original maturity) that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments. Restricted cash comprises cash balances where specific restrictions exist on the Company\u2019s ability to use this cash. Restricted cash includes cash deposited as collateral for letters of credit issued by the Company. Restricted funds include bank balances reserved by the lending institution for installments of loan payments to be made in the near future.
Ordinary shares are classified as equity. Share premium is the excess amount received over the par value of the shares. Incremental costs directly attributable to the issue of new shares are recognized in equity as a deduction, net of tax, from the proceeds. When ordinary shares are repurchased, the amount of the consideration paid, which includes directly attributable costs, net of tax effects, is recognized as a deduction from \u2018Reserves\u2019. Repurchased shares are classified as treasury shares and are presented in \u2018Reserves\u2019. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in \u2018Reserves\u2019, and the resulting surplus or deficit on the transaction is presented in share premium.
Items of property, plant and equipment are measured at cost less accumulated depreciation and any impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes cost of material, direct labour, other directly attributable cost incurred to bring the asset ready to its intended use, cost of asset retirement obligations and any capitalized borrowing cost.
Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in profit or loss. Subsequent expenditures are capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance costs are expensed as incurred. Spare parts of property, plant and equipment are recognized under property, plant and equipment if the average turn-over exceeds 12 months or more, the cost exceeds USD 10 thousand and the part is key for the functioning of the plant. Other spare parts are recognized within inventories.
Expenditures incurred for purchasing and constructing property, plant and equipment are initially recorded as \u2018under construction\u2019 until the asset is completed and becomes ready for use. Upon the completion of the assets, the recognized costs are reclassified from \u2018under construction\u2019 to its final category of property, plant and equipment. Assets under construction are not depreciated and measured at cost less any impairment losses.
Items of property, plant and equipment are depreciated on a straight-line basis through profit or loss over the estimated useful lives of each component, taking into account any residual values. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary by the Group.
The estimated useful lives for items of property, plant and equipment are as follows: | Years |
|---|---|
Buildings | 10 - 50 |
Plant and equipment | 5 - 25 |
Fixtures and fittings | 3 - 10 |
Borrowing costs attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale, are recognized as part of the cost of those assets. All other borrowing costs are recognized as \u2018Finance cost\u2019 in the period in which they are incurred.
Goodwill represents the excess of purchase price and related costs over the value assigned to the Groups\u2019 share of identifiable assets acquired and liabilities assumed of businesses acquired that were directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss.
Goodwill on acquisition of entities that qualify as subsidiaries is presented under \u2018Goodwill and intangible assets\u2019. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in \u2018Equity-accounted investees\u2019. Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or group of units that are expected to benefit from the business combination through which the goodwill arose, based on past experience.
Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for the amount by which the cash-generating unit\u2019s carrying amount exceeds its recoverable amount. The recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on internally generated goodwill and other intangible assets is recognized in profit or loss as incurred.
Other intangible assets with a finite useful life (licenses, customer relations, trade names, software and other rights that are acquired separately or through business combinations) are amortized on a straightline basis in profit or loss over their estimated useful lives taking into account any residual value and impairment losses, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary.
The estimated useful lives of intangible assets are as follows: | Years |
|---|---|
Licenses and trade names | 3 - 10 |
Purchased rights and other | 4 - 10 |
Software | 1 - 5 |
Inventories are measured at the lower of cost and net realizable value. The cost of inventories of raw materials, spare parts and supplies are based on the weighted average principle or the first-in-first-out method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Non-financial assets that have an indefinite useful life, for example goodwill, are not subject to amortization but are tested annually for impairment or more frequently when indicators arise. Assets with a finite useful life are subject to depreciation or amortization and are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the assets\u2019 recoverable amount is estimated. An impairment loss is recognized for the amount by which the assets\u2019 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. The value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit by continued use.
For the purpose of assessing impairment, assets are grouped based on the lowest level for which there are separately identifiable cash flows (cash-generating units). Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro-rata basis. Non-financial assets, which are impaired, are tested periodically to determine whether the recoverable amount has increased and the impairment be (partially) reversed. Impairment losses on goodwill are not reversed.
For other assets, an impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversal of impairments is only permitted if in a subsequent period after an impairment loss has been recognized, the amount of the impairment loss decreases and the decrease can be related objectively to an event after the impairment loss was recognized.
Provisions are recognized when a present legal or constructive obligation based on past events exists, and it is probable that an outflow of economic benefits is required to settle the obligation. If the outflow is probable, but cannot be determined reliably, the obligation is disclosed. The non-current part of provisions is determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
The Group recognizes a provision if the Group has an obligation to restore a leased asset in its original condition at the end of its lease term and in case of legal requirements with respect to cleanup of contamination of land, and a reliable estimate can be made. Based on the land lease of their production facilities, some entities have the obligation to restore their site upon decommissioning.
The Group has not recorded a liability for this conditional asset retirement obligation, as it does not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of the operations, which is necessary to estimate the fair value of this liability.
The Group is subject to legal and regulatory proceedings in various jurisdictions. Such proceedings may result in criminal or civil sanctions, penalties or disgorgements against the Company. If it is probable that an obligation to the Group exists, which will result in an outflow of resources and the amount of the outflow can be reliably estimated, a provision is recognized.
The donation provision is recognized as a constructive obligation, the amount is undiscounted as the Group expects settlement within 12 months, as such the provision is classified as current.
Onerous contracts are contracts for which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract, which is determined based on both the incremental costs necessary to fulfil the obligation under the contract and an allocation of other costs that relate directly to fulfilling that contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.
Revenues are recognized to depict the transfer of goods or services to customers in the ordinary course of the Group\u2019s activities, in the amounts that reflect the considerations to which the Group expects to be entitled in exchange for those goods or services. Revenue is recognized when the Group satisfies the performance obligations by transferring promised goods or services to customers. The main performance obligation of the Group is the transfer of the Group\u2019s fertilizer and chemical products to customers. Revenue from the sale of fertilizer and chemical products are the two main revenue streams of the Group.
Goods are transferred when the customer obtains control of the asset. The timing of when control transfers depends on the sales and shipping terms agreed. Depending on its nature and the agreed sales terms, a performance obligation is either satisfied at certain point in time or over a certain period of time.
Revenue is recognized net of expected discounts and rebates to customers. Accumulated experience and management judgement is used to estimate and provide for the discounts and rebates and revenue is only recognized to the extent that it is highly probably that a significant reversal will not occur. The Group does not have any contracts where the period of time between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, no adjustment is made to transaction prices for the time value of money.
Government grants that compensate the Group for expenses incurred are recognized in profit or loss as \u2018Other income\u2019 on a systematic basis in the periods in which the expenses are recognized. When the grant relates to an asset, it is recognized at the nominal amount of the grant and subsequently recognized as income in equal amounts over the expected useful life of the related asset, if applicable.
Other government grants are recognized initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant, and are then recognized in profit or loss as \u2018Other income\u2019 on a systematic basis over the useful life of the asset.
The Group receives European Emission Allowances (\u201cEUAs\u201d) as a result of its industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority. The amount of EUAs granted is based on an estimate of CO2 emissions in the Netherlands and the effective European emission legislation. In arrears, the Group must refund allowances to the Dutch Emission Authority based on actual CO2 emissions during the year. In December 2022, the European Parliament (\u201cEP\u201d) and the Council reached a provisional agreement on the reform of the EU Emissions Trading System (\u201cETS\u201d) as a result of which the free allocation of allowances within the EU ETS will be phased out gradually.
The grant of these allowances is within the scope of IAS 20 Government Grants. EUAs are accounted for slightly different than the above accounting policy. Upon initial recognition, the EUA\u2019s are recognized as inventory at the nominal amount of the grant (nil). Concurrently, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. When no excess or deficit is identified, no liability is recognized as the Group has sufficient EUAs to settle the liability.
The excess or deficit is calculated and recorded separately for each production facility. If a deficit in EUAs is identified, the Group has to purchase additional EUAs on the commodity markets to settle its liability to the Dutch Emission Authority. Purchased EUAs are recognized at cost and classified as inventory. The cost of the purchased EUAs to settle the liability for emission allowances during any given compliance period are recognized in cost of sales.
EUAs in excess of the liability to the Dutch Emission Authority that are controlled by OCI can be sold for the benefit of the Group. Sales of EUAs in excess of the liability for emission allowances during any given compliance period are recognized in cost of sales.
Whether an arrangement is, or contains a lease is assessed at the commencement date of the lease. In general, an arrangement is considered to be or to contain a lease when all of the following apply:
There is an identified asset;
OCI obtains substantially all economic benefits from the use of the asset; and
OCI can direct the use of the identified asset.
Lease obligations are recognized based on the present value of the future minimum lease payments.
Right-of-use assets are valued equal to the lease liabilities. As leases do not easily provide for an implicit rate, OCI uses the incremental borrowing rate. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
For leases, each lease payment is allocated between the liability and finance cost. The finance cost is charged to the consolidated statement of profit or loss over the term of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-line basis.
OCI has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. For assets in the class leases of offices and buildings, we account for the lease and non-lease components separately. For these types of leases the allocation of the consideration between lease and non-lease components is based on the relative stand-alone prices of lease components included in the lease arrangements. Leases are presented as \u2018Right-of-use assets\u2019 and \u2018Lease obligations\u2019. Short term leases (less than 12 months) or low value leases (less than USD 5,000) are expensed through the statement of profit or loss as incurred.
Finance income comprises:
Interest income on funds invested (including on financial assets at fair value through other comprehensive income);
Gains on the disposal of financial assets at fair value through other comprehensive income;
Dividend income (excluding dividend from equity-accounted investees and subsidiaries);
Fair value gains on financial assets at fair value through profit or loss; and
Gains on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income.
Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group\u2019s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.
Finance cost comprises:
Interest expense on borrowings;
Unwinding of the discount on provisions and contingent consideration;
Interest expense related to lease obligations;
Losses on disposal of financial assets at fair value through other comprehensive income;
Fair value losses on financial assets at fair value through profit or loss;
Loss on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income; and
Impairment losses recognized on financial assets (other than trade receivables).
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss and expensed as incurred. Foreign currency gains and losses are recognized on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.
Certain Group subsidiaries provide pension plans, end of service remuneration plans and long-term service benefits. These pension plans qualify as defined contribution plans. Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
The Group long-term employee benefits are recognized if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably to determine its present value. The discount rate is the yield at the balance sheet date on triple-A (\u2018AAA\u2019) credit rated bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Re-measurements are recognized in profit or loss in the period in which they arise.
Employee termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. OCI recognizes termination benefits when OCI is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or when OCI is providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
Certain employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments.
The grant date fair value of equity-settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period (the vesting period) that the employees render service and becomes unconditionally entitled to the awards.
The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. At each reporting date, the progress of non-market conditions is measured and the expenses are recorded accordingly with true-ups recorded.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Current tax also includes any tax arising from the declaration of dividends. Current income tax receivable and payable are offset when there is a legally enforceable right to offset and when the current income tax relates to the same fiscal authority.
Deferred tax liabilities are recognized for all taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements (\u2018balance sheet\u2019 method). Deferred tax assets are recognized for all deductible temporary differences, unused carry forward losses and unused carry forward tax credits, to the extent that it is probable that future taxable profit will be available against which the deferred income tax assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
Deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss. Also, no deferred income tax is recognized regarding the initial recognition of goodwill and regarding investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Deferred income tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority.
In cases where it is concluded it is not probable that tax authorities will accept a tax treatment, the effect of the uncertainty is reflected in the recognition and measurement of tax assets and liabilities or, alternatively, a provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the company to change its judgment regarding the adequacy of existing tax assets and liabilities. Such changes to tax assets and liabilities will impact the income tax expense in the period during which such a determination is made.
An operating segment is a component of an entity that engages in business activities for which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity\u2019s Chief Operating Decision Maker (\u2018CODM\u2019) to make decisions about resource allocation to the segment and to assess its performance and for which discrete financial information is available. The Group determines and presents operating segments on the basis of information that internally is provided to the CODM during the period. Operating segments are grouped into reporting segments based on similar economic environments and similar products.
The consolidated statement of cash flows has been prepared using the \u2018indirect\u2019 method. Cash flows in foreign currencies have been translated applying average exchange rates. Currency translation differences on cash are shown separately in the consolidated statement of cash flows. Cash flows from investing activities consist mostly of investments and divestments in property, plant and equipment, intangible assets, and acquisitions insofar as these are paid for in cash. Acquisitions or disposals of subsidiaries are presented as acquisition of subsidiary, net of cash. Cash flows relating to capitalized borrowing cost are presented as cash flows from operating activities. Cash flows from financing activities consist of aquisition or divestment of non-controlling interests and settlement of derivatives, with the exception of interest rate derivatives which are presented as cash flows used in operating activities. Cash flows from discontinued operations / assets held for demerger are presented separately from the cash flows from continuing operations.
The presentation of withholding tax paid on subsidiary dividends changed from cash flows used in financing activities to cash flows used in operating activities in 2022. Withholding tax paid on subsidiary dividends in 2021 amounts to USD 10.6 million and is presented in dividends paid to non-controlling interests.
Earnings per ordinary share are calculated by dividing the profit or loss (net) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. In making this calculation the (ordinary) treasury shares are deducted from the number of ordinary shares outstanding. The calculation of the diluted earnings per share is based on the weighted average number of ordinary shares outstanding plus the potential increase as a result of the conversion of convertible bonds and the settlement of share-based compensation plans (share option plans). Anti-dilutive effects are not included in the calculation. An adjustment is made to profit or loss (net) to eliminate interest charges, whilst allowing for effect of taxation. Regarding equity-settled share option plans it is assumed that all outstanding plans will vest. The potential increase arising from share option plans is based on a calculation of the value of the options outstanding. This is the number of options multiplied by the exercise price, divided by the average share price during the financial year. This potential increase is only applied if the option has intrinsic value.
On a regular basis, the IASB issues new accounting standards, amendments and revisions to existing standards and interpretations. These new accounting standards, amendments and revisions to existing standards and interpretations are subject to endorsement by the European Union.
The Group has applied the following amendments that became effective during 2022:
On 14 May 2020, the IASB issued 'Onerous Contracts \u2014 Cost of Fulfilling a Contract (Amendments to IAS 37)' amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.
The changes specify that the \u2018cost of fulfilling\u2019 a contract comprises the \u2018costs that relate directly to the contract\u2019. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).
The Group applies the amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the amendments are effective. Comparatives are not restated.
A fundamental reform of major interest rate benchmarks has been undertaken globally, including the replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group\u2019s main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for LIBOR is the Secured Overnight Financing Rate (SOFR). The USD LIBOR will cease as per 30 June 2023. Reference is made to note 6.3.
IFRS standards and interpretations thereof not yet in force which may apply to the future Group\u2019s consolidated financial statements are being assessed for their potential impact. The following new and amended standards are not expected to have a significant impact on the Group\u2019s consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
The preparation of the financial statements in compliance with IFRS requires management to make judgments, estimates and assumptions that affect amounts reported in the consolidated financial statements. The estimates and assumptions are based on experience and various other factors that are believed to be reasonable under the circumstances and are used to judge the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised or in the revision period and future periods, if the changed estimates affect both current and future periods.
The most critical accounting policies, involving a higher degree of judgment and complexity in applying these principles and for which changes in the assumptions and estimates could result in significantly different results than those recorded in the financial statements, are the following:
Intangible assets with finite useful lives are carried at cost less cumulative amortization and any impairment. Amortization is calculated using the \u2018straight-line\u2019 method based on the estimated useful lives. Management makes estimates regarding the useful lives and residual values and assumes that amortization takes place on a \u2018straight-line\u2019 basis. The assets\u2019 useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
For intangible assets with finite useful lives, OCI assesses annually or more frequently whether indicators exist that suggest the intangible asset might be impaired by comparing the recoverable amounts with their carrying amounts. In determining the recoverable amounts of intangible assets, OCI makes estimates and assumptions about future cash flows based on the value in use. In doing so, OCI also makes assumptions and estimates regarding the discount rates in order to calculate the net present value of the future cash flows. OCI tests at least annually whether goodwill is impaired by comparing the recoverable amounts of cash-generating units with their carrying amounts.
The recoverable amount is the higher of the fair value less cost of disposal and the value in use. In determining the recoverable amount, OCI makes estimates and assumptions concerning future revenues, future costs, future working capital, future investments, Weighted Average Cost of Capital (\u2018WACC\u2019) and future inflation rates.
Depreciation is calculated using the \u2018straight-line\u2019 method based on the estimated useful lives, taking into account any residual values. Management makes estimates regarding the useful lives and residual values and assumes that depreciation takes place on a \u2018straight-line\u2019 basis. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. OCI assesses annually, or more frequently, whether indicators exist that suggest that an item of property, plant and equipment might be impaired by comparing the recoverable amounts with their carrying amounts.
In the useful life reassessment and in assessing for impairment indicators OCI also considers the impact of its ESG targets and of relevant transition and physical climate risks, if identified for a specific country or region. Transition risks are risks associated with transitioning to a lower-carbon economy and are primarily related to cost of climate impacts, new technologies, market developments and climate litigations. Physical risks are risks that arise from the physical effects of climate change.
In determining the recoverable amounts of property, plant and equipment, OCI makes estimates and assumptions about future cash flows based on the value in use. The discount rate to be used in order to calculate the net present value of the future cash flows in the impairment analysis is based on the WACC.
The fair value of financial instruments traded in active markets (financial instruments in the fair value hierarchy level 1) is based on quoted market prices at the balance sheet date. The fair value of financial instruments not traded in an active market with observable market prices (financial instruments in the fair value hierarchy level 2) is determined using generally accepted valuation techniques. These valuation techniques include estimates and assumptions about forward rates, discount rates based on a single interest rate, or on a yield-curve based on market conditions existing at the balance sheet date.
The fair value of borrowings and interest rate swaps is calculated based on the present value of the estimated future cash flows based on the yield-curve applicable at the balance sheet date. If the financial instrument contains a floating interest rate, the future expected interest rates are determined based on forward rates. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date. Gas price option and gas swap contracts are valued using applicable market yield curves.
All inputs for the fair value calculations represent observable market data that are obtained from external sources that are deemed to be independent and reliable. The net carrying amount of trade receivables and trade payables is assumed to approximate the fair value due to the short-term nature. The fair value of financial instruments with no observable market prices (financial instruments in the fair value hierarchy level 3) is based on assumptions that market participants would use when pricing these assets or liability, including assumptions about risk. Assumptions about risk include the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and the risk inherent in the inputs to the valuation technique, including a risk adjustment when there is significant measurement uncertainty.
The fair value of non-current financial liabilities is estimated by discounting the future cash flows using original effective yield-curves. Unlisted equity securities in the financial assets at fair value through other comprehensive income category (financial instruments in the fair value hierarchy level 3) are measured at cost less impairments. A significant and prolonged decline in the fair value of a financial asset at fair value through other comprehensive income below its acquisition cost is considered as an indicator that the financial asset at fair value through other comprehensive income is impaired.
If any such evidence exists for a financial asset at fair value through other comprehensive income, the cumulative losses previously recognized in other comprehensive income is recognized in the profit or loss \u2013 measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss \u2013 is removed from other comprehensive income and recognized in profit or loss.
Objective evidence may exist in circumstances in which a counterparty has been placed in bankruptcy, or has failed on the repayments of principal and interest. In other circumstances OCI uses judgment to determine whether financial assets may be impaired. OCI uses judgment to determine whether an impairment can be reversed, an assumption in doing so might be an improvement in the debtor\u2019s credit rating or receipt of payments due. For listed equity securities in the financial assets at fair value through other comprehensive income category, the Group uses the assumption that if the market value declined by more than 25 percent and more than 6 months, the asset is assumed to be impaired.
For unlisted equity securities in the financial assets at fair value through other comprehensive income category, an impairment test is performed if objective evidence becomes available to the Group that the asset might be impaired. For debt-securities, an impairment trigger exists when the counterpart fails to meet its contractual payment obligations or there is evidence that the counterpart has encountered financial difficulties. The impairment is determined based on the carrying amount and the recoverable amount. The recoverable amount is determined as the present value of estimated future cash flows using the original effective interest rate.
In determining the net realizable value of inventories, OCI estimates the selling prices in the ordinary course of business, cost of completion and cost to sell. In doing so, OCI makes estimates and assumptions based on current market prices, historical usage of various product categories versus current inventory levels and specific identified obsolescence risks (e.g. end of life of specific goods and spare parts and the impact of new environmental legislation).
Recognition of provisions include significant estimates, assumptions and judgments. IFRS requires only those provisions to be recognized if there is an expected outflow of resources and if the cost of these outflows can be estimated reliably.
Accordingly, management exercises considerable judgment in determining whether it is more likely than not that there is a present obligation as a result of a past event at the end of the reporting period, whether it is probable that such a proceeding will result in an outflow of resources and whether the amount of the obligation can be reliably estimated. These judgments are subject to change as new information becomes available.
The required amount of a provision may change in the future due to new developments in the matter. Revisions to estimates may significantly impact future profit or loss. Upon resolution, the Group may incur charges in excess of the recorded provisions for such matters.
Provisions for asset retirement obligations, represent estimated costs of decommissioning. Due to the long time period over which future cash outflows are expected to occur, including the respective interest accretion, assumptions are required to be made. Amongst others, the estimated cash outflows could alter significantly if, and when, political developments affect future laws and regulation with respect to asset retirements. The Group has not recognized any asset retirement obligations because a reliable estimate of the amount of the obligations cannot be made.
With respect to legal cases, the Group has to estimate the outcome. Regulatory and legal proceedings as well as government investigations often involve complex legal issues and are subject to substantial uncertainties. The Company periodically reviews the status of these proceedings with both the internal and external legal counsels.
OCI is subject to income taxes in several jurisdictions. Estimates are required in determining the groupwide provision for income taxes. There are some transactions and calculations for which the ultimate tax position is uncertain during the ordinary course of business. The Group recognizes provisions for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from amounts that were initially recorded, such differences will impact the current income tax and deferred tax provisions in the period in which such determination is made. OCI recognizes deferred tax assets to the extent that it is probable that future taxable profits will be available for the deferred tax asset to be recovered.
This is based on estimates of taxable future income by jurisdiction in which OCI operates and the period over which deferred tax assets are expected to be recoverable. In the event that actual results or new estimates differ from previous estimates and depending on the possible tax strategies that may be implemented, changes to the recognition of deferred tax assets could be required, which could impact the financial position and profit or loss.
The assessment of whether a contract is or contains a lease requires judgment with respect to whether the lessor has substantive substitution rights, who obtains economic benefits from use of the asset and who takes the \u2018how and for what purpose\u2019 decisions during the period of use. Judgment is also applied in order to assess whether the entity will exercise any extension or cancelation options of a lease. The group applies judgments in order to determine the incremental borrowing rate in order to calculate the lease liabilities.
Subsidiaries that OCI controls are fully consolidated from the date that control commences until the date that control ceases. To determine whether OCI has control over its subsidiaries, an assessment of control is required. This assessment is based on the requirements of IFRS 10 and evaluates whether OCI is exposed or has rights to variable returns from its involvement with the investee and whether OCI has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. In certain circumstances, the control assessment may require OCI to evaluate the effect of ownership structures, determination of relevant activities and other arrangements including the rights of other shareholders that could have an impact on the assessment of control, this specifically relates to control assessment of Fertiglobe and Sorfert. The significance of this evaluation is inversely correlated with OCI\u2019s shareholding in the subsidiary as shown in note 17 Non-controlling interests.
In determining whether OCI shall consolidate certain investments in joint arrangements, OCI makes assumptions about whether certain decision rights are substantive or protective in nature. In doing so, OCI applies judgment regarding shareholder agreements it has with those other investees. If OCI determines it holds the majority of the substantive decision rights, it assumes that it holds power over the investee. OCI also makes assumptions whether it is exposed to variable returns and whether these are linked to the power OCI holds. The linkage is tested by making assumptions whether OCI might be acting as a principal rather than an agent. If OCI meets all three criteria, OCI assumes it controls the investee.
As part of the preparation of the financial statements, the Company has assessed its liquidity risk and going concern. Liquidity risk is the risk that the Group may encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company has made a number of assumptions in assessing its ability to meet its covenant requirements and satisfy obligations as they become due. Determining these assumptions requires significant judgment about future results and cash flows. Key assumptions include product pricing, gas pricing, utilization rates and the ability to arrange financing and obtain waivers for potential covenant breaches.
The Company periodically reviews its obligations with respect to CO2 emission under the ETS program. The estimation of CO2 emissions is primarily based on the expected utilization of the production capacity for the remaining part of the compliance period. The estimation of the utilization of the production capacity is dependent on a number of assumptions with inherent uncertainty making it a critical accounting estimate. The identification of the number of excess EUAs is dependent on this estimate.
OCI faces significant risks and opportunities as a result of climate change and governmental actions to reduce greenhouse gas (GHG) emissions and create low-carbon and climate-resilient economies. Refer to section 5 Climate change risks and opportunities and Strategic risks for a description of these risks and opportunities. These risks and opportunities are integrated in the Group\u2019s risk management and strategy development processes, resulting in a decarbonization strategy. Accordingly this is also embedded in OCI\u2019s governance structure e.g. by way of the mandate of the HSE & Sustainability Committee. OCI\u2019s decarbonization strategy includes a commitment to 20% greenhouse gas intensity reduction by 2030 compared to 2019 and carbon neutrality by 2050.
In 2022 OCI has continued to assess global climate related risks and opportunities relevant for its business and continues to embed climate risks and opportunities into all relevant key business processes such as business planning, business performance reviews and capital value processes. Risk mitigating actions and new business opportunities are being targeted and developed. The risks of climate change for OCI\u2019s financial performance can be classified as physical risks or transition risks.
Physical risks caused by rising global temperatures include extreme weather events (hurricanes, floods), changing weather patterns, increased water stress, and rising sea levels. These events and changes can impact our supply chain, disrupt planting cycles and growing conditions, and impede farmers\u2019 ability to apply crop nutrients. Transition risks associated with transitioning to a lower-carbon economy are primarily related to (i) changes in carbon-linked regulations and policies, such as the ETS system, the proposed European carbon border adjustment mechanism, and other potential carbon taxation mechanisms, (ii) costs associated with transitioning to lower emissions technology and resource efficiency, and (iii) dietary shifts to more plant-based nutrition. Both types of risks can affect OCI in a multitude of ways.
As of year end 2022, the main key transitional risks identified in the time frame before 2030 relates to proposed climate change related regulations at both the international and national levels, such as the European Union\u2019s proposed carbon dioxide reduction targets, the proposed carbon border adjustment mechanism and the potential EU restrictions on nitrogen fertilizer application. The main physical risks identified refer to the impact to operations and the value chain by climate change in terms of more extreme weather conditions and natural disasters. Climate risks may result in material adjustments to the carrying amounts of assets and liabilities as a result of, among other things, future re-assessment of useful lives of tangible or intangible assets, changed assumptions used as basis for impairment testing of such assets, changes to environmental and decommission provisions, and changes to cost of capital. Significant judgment may be needed to estimate such adjustments.
As of year end 2022, any current and future financial impact to OCI of climate risks and opportunities are highly uncertain. OCI expects potential effects on margins due to higher emission costs as well as higher capital expenditure to reduce the impact of climate change. These factors have been taken into account in the impairment testing of major tangible assets (plants) and intangible assets, including goodwill. However, such effects are currently assessed as limited due to replacement of assets with greener alternatives mostly after the useful lives ended and has not led to impairments in 2022 nor to significant adjustment to useful lives of such assets. Consequently, OCI has not identified significant assets which may be of reduced or no value as of year end 2022 as a result of climate risk (\u201cstranded assets\u201d). Information on decommission provisions are provided in note 28 Contingencies.
The Group has exposure to credit, liquidity and market risks from financial instruments. These risks arise from exposures that occur in the normal course of business and are managed on a consolidated company basis. This note presents information about the Group\u2019s exposure to each of the above risks, the Group\u2019s objectives, policies and processes for measuring and managing these risks, additionally it also includes the Group\u2019s management of capital.
The Board of Directors has oversight responsibility on the establishment and monitoring of the Group\u2019s risk management framework. Senior (local) management is responsible for the effective operation of the internal risk management and control systems. The Audit and Risk department is responsible for the facilitation and supervision of the Risk Management function, compliance with OCI Internal Control Framework and supports the Board of Directors in the exercise of their aforementioned risk management duties.
The Group\u2019s risk management policies and practices are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group\u2019s business activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and responsibilities.
The Audit Committee oversees how management monitors compliance with the Group\u2019s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by the Audit and Risk Department. The Audit and Risk Department undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers and investments in debt securities. The Company mitigates the exposure to credit risk on outstanding cash balances by placing funds at multiple financial institutions with a sufficient credit rating.
The Group\u2019s exposure to customer credit risk is monitored and mitigated by performing credit checks before selling any goods. No collateral is received. The Group establishes an allowance, if needed, for impairment that represents its estimate of expected losses in respect of trade and other receivables.
The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that are expected based on historical performance. IFRS 9 establishes a three-stage impairment model, based on whether there has been a significant increase in the credit risk of a financial asset since its initial recognition. As at 31 December 2022, management assessed any significant increase in credit risk based on internal and external factors related to the financial instruments and concluded no such significant credit risk was present. Hence, no allowance related to credit risk has been recognized.
As of September 2018, the Group entered into a securitization agreement to sell certain trade receivables to an external financial institution. The agreement permits securitization of trade receivables up to EUR 400.0 million (USD 428.4 million). As per 31 December 2022 an amount of EUR 257.1 million (USD 270.0 million) of trade receivables were transferred.
With respect to transactions with financial institutions, the Group sets a minimum credit rating for the counterparties. The maximum exposure to credit risk is the carrying amount of financial instruments, for an overview reference is made to the tables financial instruments by category. There is no significant concentration by counterparty of credit risk in trade and other receivables or financial assets at fair value through other comprehensive income. Concentrations of receivables by region can be seen in the table below.
The maximum exposure to credit risk at the reporting date is as follows:
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Trade and other receivables | (9) | 881.9 | 885.2 |
Financial assets at fair value through other comprehensive income | (11) | 18.8 | 19.2 |
Cash and cash equivalents | (14) | 1,717.0 | 1,580.3 |
Total | \u00a0 | 2,617.7 | 2,484.7 |
The maximum exposure to credit risk for trade and other receivables by geographic region is as follows:
$ millions | 2022 | 2021 |
|---|---|---|
Middle East and Africa | 138.4 | 175.0 |
Asia and Oceania | 171.5 | 216.4 |
Europe | 382.0 | 301.4 |
Americas | 190.0 | 192.4 |
Total | 881.9 | 885.2 |
The maximum exposure to credit risk for cash and cash equivalents by geographic region is as follows:
$ millions | 2022 | 2021 |
|---|---|---|
Middle East and Africa | 1,442.0 | 899.1 |
Europe | 193.1 | 462.2 |
Americas | 81.9 | 219.0 |
Total | 1,717.0 | 1,580.3 |
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
31 December 2022 | Note | Carrying amount | Contractual cash flow | Less than 1 year | Between 1 and 5 years | More than 5 years |
|---|---|---|---|---|---|---|
Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (18) | 2,875.7 | 3,863.7 | 371.1 | 2,010.0 | 1,482.6 |
Lease obligations | (19) | 276.1 | 515.2 | 50.0 | 101.0 | 364.2 |
Trade and other payables | (20) | 1,257.0 | 1,257.0 | 1,167.0 | 87.2 | 2.8 |
Derivatives | (20) | 141.4 | 142.1 | 82.4 | 59.7 | - |
Total | \u00a0 | 4,550.2 | 5,778.0 | 1,670.5 | 2,257.9 | 1,849.6 |
31 December 2021 | Note | Carrying amount | Contractual cash flow | Less than 1 year | Between 1 and 5 years | More than 5 years |
|---|---|---|---|---|---|---|
Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (18) | 3,800.8 | 4,311.1 | 597.6 | 3,112.6 | 600.9 |
Lease obligations | (19) | 277.2 | 484.9 | 35.7 | 86.0 | 363.2 |
Trade and other payables | (20) | 1,368.4 | 1,368.4 | 1,345.5 | 22.5 | 0.4 |
Derivatives | (20) | 12.8 | 12.8 | 12.0 | 0.8 | - |
Total | \u00a0 | 5,459.2 | 6,177.2 | 1,990.8 | 3,221.9 | 964.5 |
The interest on floating rate loans and borrowings is based on forward interest rates at period-end. This interest rate may change as the market interest rate changes. The future obligations will be managed by the future incoming cash from operations, currently available non-restricted cash and cash equivalents of USD 1,692.2 million (2021: USD 1,439.5 million) and unused amounts on credit facility agreements in the amount of USD 1,750.0 million (2021: USD 800.0 million), reference is made to note ' Undrawn bank facilities'.
The Group\u2019s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group\u2019s reputation. This is also safeguarded by using multiple financial institutions in order to mitigate any concentration of liquidity risk. The Group\u2019s financing strategy is to secure external financing primarily at OCI N.V. and Fertiglobe plc with debt at an operating company level only if there is a compelling economic rationale. OCI N.V. acts as the financing company thus limiting the number of cross relationships within the Group and maximizing flexibility to divest operating companies.
The liquidity risk is monitored internally at Group level. On an ongoing basis the Group prepares liquidity forecasts to verify whether the Group is able to meet its future debt obligations. The Company has also carefully evaluated the funding of its Business Plan for at least the next 12 months from the date of issuance of the financial statements, taking into account the measures mentioned below and has applied sensitivities to the forecast level of liquidity headroom available. Key assumptions include product pricing, natural gas pricing and utilization rates. Management has applied these assumptions to the forecasts, which would leave sufficient liquidity headroom.
The following refinancing activities were completed during 2022 to optimize the Group\u2019s finance cost and enhance its cashflow up-streaming to OCI N.V.:
On 8 April 2022, OCI N.V. announced that it has closed a new unsecured multicurrency Revolving Credit Facility (\"RCF\") for a total of USD 1.1 billion, which replaced a facility of USD 850 million, which was undrawn at the time of refinancing and originally entered into in 2018. The new facility carried an interest margin at inception of 1.10% and has a tenor of 60 months.
On 18 May 2022, OCI N.V. announced that its wholly-owned subsidiary IFCo has refinanced in full its outstanding capital markets debt. The refinancing involves the issuance by the Iowa Finance Authority of USD 838.8 million Midwestern Disaster Area Revenue Refunding Bonds (Iowa Fertilizer Company Project), Series 2022. The Series 2022 Bonds bear interest at a weighted average cost of capital of 4.60% per annum, payable semi-annually, and an average life of 22 years, and include:
USD 150.0 million 10-year par bond with 4.00% coupon;
USD 344.375 million 20-year premium bond with 5.0% coupon yielding 4.65%; and
USD 344.370 million 28-year premium bond with 5.0% coupon yielding 4.80%.
On 23 December 2022, Fertiglobe announced that it has refinanced its outstanding USD 900 million bridge facility, originally due in 2024, with new 3-year (USD 300 million) and 5-year (USD 600 million) term facilities with interest rates of SOFR + 150bps and SOFR + 175bps respectively. It further announced that it has increased its revolving credit facility from USD 300 million to USD 600 million and extended the facility's maturity from December 2026 to 2027. The margin on the RCF has been reduced from 175bps to 140bps over SOFR. The new term facilities were drawn on 4 January 2023 and the bridge facility repaid on the same date.
For an overview of all loans and borrowings, reference is made to note 18.
Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity prices that will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Group is exposed to foreign currency risk arising in separate ways:
The Group entities predominantly execute their activities in their respective functional currencies. The Group is however exposed to foreign exchange transaction risk when Group entities enter into foreign currency denominated transactions. The Group monitors the exposure to foreign currency risk arising from operating activities and enters selectively into foreign exchange contracts to hedge foreign currency exposures. The nominal amount of the foreign currency derivatives outstanding used to hedge transaction risk as per 31 December 2022 was USD 62.3 million (2021: USD 142.6 million) and relates to the USD exposure of the Group (on Euro currencies).
The functional currencies of the Group entities are primarily the US dollar, the Algerian dinar and the Euro. EFC and EBIC have exposure to fluctuations in the USD / EGP exchange rates and Fertil has exposure to fluctuations in the USD / AED echange rates.
The Group is exposed to the translation of foreign currency denominated monetary assets and liabilities. These exposures are managed by the Group's treasury function, which may hedge a portion of the foreign currency exposures estimated to arise in the foreseeable future. For the unhedged portion the Group seeks to mitigate translation risk by matching the remaining currency of debt with available cashflows in the respective currency. As per 31 December 2022 there were no foreign currency derivatives outstanding (2021: nil) related to the exposure of foreign currency denominated monetary assets and liabilities.
The summary of balances of the Group\u2019s exposure to foreign exchange translations, where there is exposure for monetary items denominated in foreign currencies which differ from their functional currencies, including intercompany balances, is as follows:
31 December 2022 | USD | EUR | EGP |
|---|---|---|---|
Trade and other receivables | 72.7 | 20.0 | 72.9 |
Trade and other receivables - Intercompany | 183.5 | 285.8 | 40.7 |
Trade and other payables | (124.3) | (3.4) | (7.4) |
Trade and other payables - Intercompany | (88.5) | (247.7) | (0.4) |
Loans and borrowings | - | - | - |
Loans and borrowings - Intercompany | (475.1) | (109.3) | - |
Provisions | - | - | (76.8) |
Cash and cash equivalents | 890.0 | 22.8 | 16.5 |
31 December 2021 | USD | EUR | EGP |
|---|---|---|---|
Trade and other receivables | 20.6 | 6.3 | 93.1 |
Trade and other receivables - Intercompany | 1,980.6 | 67.6 | 0.3 |
Trade and other payables | (10.5) | (11.4) | (8.0) |
Trade and other payables - Intercompany | (161.2) | (20.0) | (0.5) |
Loans and borrowings | (1,107.0) | - | - |
Loans and borrowings - Intercompany | (1,212.6) | (123.1) | - |
Provisions | - | - | (120.8) |
Cash and cash equivalents | 411.6 | 13.9 | 24.0 |
The Algerian dinar is not included in the above table of foreign exchange translation exposure, since there are no entities in the Group which have monetary items denominated in Algerian dinar, except for Sorfert, which has the Algerian dinar as its functional currency.
The following significant exchange rates applied during the year against the US dollar:
| \u00a0 | Average 2022 | Average 2021 | Closing 2022 | Closing 2021 |
|---|---|---|---|---|
Euro | 1.0533 | 1.1828 | 1.0711 | 1.1370 |
Egyptian pound | 0.0530 | 0.0637 | 0.0404 | 0.0636 |
Algerian dinar | 0.0070 | 0.0074 | 0.0073 | 0.0072 |
The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate to increase or (decrease) against the EUR, EGP and DZD, with all other variables held constant. The Group\u2019s exposure to foreign currency changes for all other currencies is not material.
31 December 2022 | Change in FX rate | Effect on profit before tax | Effect on equity |
|---|---|---|---|
EUR - USD | 10 percent | (49.0) | (34.7) |
| \u00a0 | (10) percent | 49.0 | 34.7 |
EGP - USD | 10 percent | 4.5 | - |
| \u00a0 | (10) percent | (4.5) | - |
DZD - USD | 4 percent | 36.7 | - |
| \u00a0 | (4) percent | (36.7) | - |
31 December 2021 | Change in FX rate | Effect on profit before tax | Effect on equity |
|---|---|---|---|
EUR - USD | 5 percent | 1.9 | 31.0 |
| \u00a0 | (5) percent | (1.9) | (31.0) |
EGP - USD | 3 percent | (0.4) | - |
| \u00a0 | (3) percent | 0.4 | - |
DZD - USD | 3 percent | 21.9 | - |
| \u00a0 | (3) percent | (21.9) | - |
The figures in the above overview are determined based on the currency volatility of the respective years. A significant part of the Group\u2019s exposure to foreign currency transaction risk relates to intercompany balances.
The Group\u2019s cash flow interest rate risks arise from the exposure to variability in future cash flows of floating rate financial instruments and refinancing fixed rate borrowings. The Group regularly reviews its exposure to the global interest rate environment. As per 31 December 2022 there were no interest rate derivatives outstanding. The interest rate derivatives were settled in 2022 due to a change in refinancing planning. In 2021, the Group had entered into interest rate derivatives with a notional amount of USD 125.0 million to manage the interest rate risk on floating rate instruments and the refinancing of fixed rate borrowings.
The Group analyses its interest rate exposure on a dynamic basis. The Group calculates the impact on profit or loss of a defined interest rate shift. The same interest rate shift is used for all currencies. The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market data, showing a higher volatility compared to prior years. The interest rate sensitivity calculation is based on the interest-bearing liabilities. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Group\u2019s profit before tax is affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as follows:
$ millions | In basis points | 2022 | 2021 |
|---|---|---|---|
Effect on profit before tax for the coming year | + 200 bps | (26.9) | (35.9) |
- 200 bps | 26.9 | 35.9 |
A fundamental reform of major interest rate benchmarks has been undertaken globally, including the replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group\u2019s main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for LIBOR is the Secured Overnight Financing Rate (SOFR). The USD LIBOR will cease as per 30 June 2023. The Group has finished the process of amending contractual terms in response to IBOR reform during 2022.
All financial instruments that are subject to the interest rate benchmark reform have contractual provisions in place to seamlessly transition to a new reference rate when publication of USD LIBOR ceases. All instruments subject to the reform are non-derivative financial liabilities.
Natural gas is one of the primary raw materials used in the Group\u2019s production processes. The Group is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices. Management monitors the development of gas prices and products\u2019 selling prices on a daily basis using external historical and forecast market data provided by several data vendors. Management analyzes the potential profit margin per product based on this data in order to make operational and hedging decisions.
For the entities that are impacted by changes in natural gas prices during FY 2023, a change in the average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD 81.0 million (2021: USD 91.6 million).
The Group enters into gas hedges in order to hedge future gas price levels over a certain period of time (reference is made to note 20). The Group uses derivatives (Basis swaps, Index swaps and options) in order to do so and does not apply hedge accounting on these instruments, therefore all fair value changes related to these financial instruments are recognized in profit or loss. Where there is no past practice of being net cash-settled, fixed price gas contracts and month-ahead swaps are accounted for under the \u2018own use\u2019 exemption. The fiscal year 2023 gas price risk is reduced by the Group to an extent of 81% (including both physical pricings and financial hedges). The outstanding gas hedges in MMBtu as per 31 December 2022 for the years 2023-2025 are:
Flat priced contracts 181.0 million (2021: 15.8 million);
Options (delta equivalent) 7.3 million (2021: 14.6 million);
Basis Swaps 0.9 million (2021: 0.1 million)
The flat priced contracts in MMBtu as per 31 December 2022 for the years 2026 and beyond are 136.6 million.
The Group has a cash collateral obligation for the outstanding gas hedges with one counterparty for any mark-to-market liability that exceeds USD 25 million. These hedges in MMBtu approximate 40% of the outstanding volume of gas hedges. As at 31 December 2022, no margin calls have taken place under this obligation.
During the year, the Group has generated additional liquidity by selling EUAs to the market. This generated total net proceeds of USD 94.6 million (2021: USD 116.5 million) resulting from the sale and repurchase of EUAs. Included in the net proceeds received, a gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs. When EUAs are sold for cash management purposes, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. This liability is subsequently measured at fair value. The total liability recorded as per 31 December 2022 amounts to USD 36.7 million (2021: USD 116.2 million).
To manage the fair value risk of the EUA liability, the Group entered into financial hedges to purchase 0.9 million (2021: 1.3 million) EUAs. As per 31 December 2022, the fair value of these forward contracts amounts to USD (5.2) million (2021: USD 42.7 million). The group does not apply hedge accounting to these contracts.
The following table presents the various categories of financial instruments:
31 December 2022 | Note | Loans and receivables / payables at amortized cost | Derivatives at fair value | Financial assets at fair value through other comprehensive income |
|---|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Trade and other receivables | (9) | 859.0 | 22.9 | - |
Financial assets at fair value through other comprehensive income | (11) | - | - | 18.8 |
Cash and cash equivalents | (14) | 1,717.0 | - | - |
Total | \u00a0 | 2,576.0 | 22.9 | 18.8 |
Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (18) | 2,875.7 | - | - |
Trade and other payables | (20) | 1,220.3 | 178.1 | - |
Total | \u00a0 | 4,096.0 | 178.1 | - |
31 December 2021 | Note | Loans and receivables / payables at amortized cost | Derivatives at fair value | Financial assets at fair value through other comprehensive income |
|---|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Trade and other receivables | (9) | 831.8 | 53.4 | - |
Financial assets at fair value through other comprehensive income | (11) | - | - | 19.2 |
Cash and cash equivalents | (14) | 1,580.3 | - | - |
Total | \u00a0 | 2,412.1 | 53.4 | 19.2 |
Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (18) | 3,800.8 | - | - |
Trade and other payables | (20) | 1,252.2 | 129.0 | - |
Total | \u00a0 | 5,053.0 | 129.0 | - |
The Group has limited financial instruments carried at fair value. For derivative financial instruments, the fair value is calculated within hierarchy category level 2. Financial assets at fair value through other comprehensive income recognized as level 1 is USD 2.2 million (2021: USD 2.8 million), the investment in the Infrastructure and Growth Capital Fund of USD 1.5 million (2021: USD 2.8 million) was recognized as level 2 as the valuation is partially derived from listed shares.
The investment in Notore Chemical of USD 15.1 million (2021: USD 13.6 million) is recognized as level 3, reference is made to note 11. Notore is listed on the Nigerian Stock Exchange since 2018, however due to the lack in trading volumes the investment is still valued within the hierarchy category level 3 based on audited financial statements.
In 2022 and 2021, there were no transfers between the fair value hierarchy categories. The fair value of loans and borrowings and receivables are disclosed in notes 18 and 9, respectively.
The Board\u2019s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interests of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group is required by external financial institutions to maintain certain capital requirements compared to its debt. Reference is made to note 18 for a description of financial covenants.
The Group\u2019s net debt to equity ratio at the reporting date was as follows:
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Loans and borrowings | (18) | 2,875.7 | 3,800.8 |
Less: cash and cash equivalents | (14) | 1,717.0 | 1,580.3 |
Net debt | \u00a0 | 1,158.7 | 2,220.5 |
Total equity | \u00a0 | 4,339.7 | 3,508.2 |
Net debt to equity ratio at 31 December | \u00a0 | 0.27 | 0.63 |
In 2021, loans and borrowings included an amount of USD 383.1 million (2022: nil) related to the bank overdraft facility of OCI N.V. The amount drawn on this facility was also included in cash and cash equivalents and held by other entities within the Group. These amounts were not offset as they did not comply with the offsetting requirements for financial instruments.
$ millions | Land and buildings | Plant and equipment | Fixtures and fittings | Under construction | Total |
|---|---|---|---|---|---|
Cost | 751.9 | 9,328.1 | 60.4 | 146.2 | 10,286.6 |
Accumulated depreciation | (185.7) | (3,813.7) | (42.9) | - | (4,042.3) |
At 1 January 2021 | 566.2 | 5,514.4 | 17.5 | 146.2 | 6,244.3 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | 2.0 | 25.1 | 4.8 | 203.3 | 235.2 |
Disposals | - | (2.4) | - | - | (2.4) |
Depreciation | (24.8) | (531.8) | (3.5) | - | (560.1) |
Impairment | (1.3) | (244.7) | (0.3) | (30.0) | (276.3) |
Transfers | 0.6 | 163.0 | 1.2 | (164.8) | - |
Reclassification to inventory | - | (19.0) | - | - | (19.0) |
Asset retirement obligation | - | - | 8.7 | - | 8.7 |
Movement in exchange rates | (3.2) | (76.1) | (0.7) | (6.9) | (86.9) |
At 31 December 2021 | 539.5 | 4,828.5 | 27.7 | 147.8 | 5,543.5 |
Cost | 748.6 | 9,208.8 | 73.8 | 147.8 | 10,179.0 |
Accumulated depreciation | (209.1) | (4,380.3) | (46.1) | - | (4,635.5) |
At 31 December 2021 | 539.5 | 4,828.5 | 27.7 | 147.8 | 5,543.5 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | 38.9 | 42.2 | 2.6 | 310.4 | 394.1 |
Disposals | (1.7) | (1.1) | 0.1 | (2.2) | (4.9) |
Depreciation | (29.0) | (495.0) | (5.9) | - | (529.9) |
Impairment | - | (22.3) | - | - | (22.3) |
Transfers | 0.4 | 193.8 | 1.0 | (195.2) | - |
Reclassification | - | 32.5 | - | (1.1) | 31.4 |
Asset retirement obligation | - | - | (6.3) | - | (6.3) |
Movement in exchange rates | 0.4 | (10.7) | (1.1) | (3.1) | (14.5) |
At 31 December 2022 | 548.5 | 4,567.9 | 18.1 | 256.6 | 5,391.1 |
Cost | 778.6 | 9,371.6 | 67.8 | 256.6 | 10,474.6 |
Accumulated depreciation | (230.1) | (4,803.7) | (49.7) | - | (5,083.5) |
At 31 December 2022 | 548.5 | 4,567.9 | 18.1 | 256.6 | 5,391.1 |
As at 31 December 2022, the Group has land with a carrying amount of USD 69.7 million (2021: USD 35.3 million). The transfers of USD 195.2 million (2021: USD 164.8 million) are assets under construction that were put into use during the year. Transfers mainly relate to OCIB for USD 72.6 million, OCIN for USD 42.0 million, Fertil for USD 41.0 million and EBIC for USD 30.6 million. The additions of USD 394.1 million (2021: USD 235.2 million) mainly relate to OCIN for USD 96.6 million, OCIB for USD 68.1 million, Fertil for USD 47.7 million and IFCo for USD 36.3 million.
The effect of movement in exchange rates in 2022 mainly relates to Sorfert, BioMCN and OCIN, which have different functional currencies (Algerian dinar and Euro respectively) compared to the Group\u2019s presentation currency. The Algerian dinar increased by 1.4% and the Euro decreased by 5.8% against the US dollar in 2022. The capitalized borrowing costs during the year ended 31 December 2022 amounts to USD 1.0 million (2021: nil).
The difference between the additions in the above schedule and the investments in property, plant and equipment mentioned in the consolidated statement of cash flows is mainly caused by changes in capital expenditure creditors not yet paid and capitalized borrowing costs, which are presented as part of interest expenses under cash flows from operating activities in the consolidated statement of cash flows. For capital commitments reference is made to note 29.
In 2022, no property, plant and equipment (2021: USD 1,835.9 million) has been pledged as security for external loans and borrowings of IFCo. Reference is made to note 18.
During 2022 an impairment loss of USD 12.8 million (2021: USD 264.5 million) and USD 5.2 million (2021: 13.8 million) was recognized in cost of sales on the property, plant and equipment and right of use assets, respectively, of BioMCN. Over the course of the year 2021, European gas prices reached historically high price levels, which has a significant negative impact on the financial performance of BioMCN. In response to the high gas price environment, management decided to temporarily shut down the production facilities at BioMCN from June 2021 onwards. The carrying amount of these asset is nil as of December 31, 2022. The shutdown of the production facilities was initiated to avoid significant contribution losses caused by the historically high gas prices.
The impairment loss on BioMCN property, plant and equipment recognized 2022 pertains to investments made to maintain the ability to quickly respond to changes in market prices. These investments are subsequently impaired as the recoverable amount for the cash generating unit is deemed zero. The impairment recognized for right-of-use assets relates to a lease modification that was subsequently impaired due to the aforementioned.
$ millions | Land and buildings | Plant and equipment | Fixtures and fittings | Total |
|---|---|---|---|---|
At 1 January 2021 | 147.8 | 81.8 | 49.8 | 279.4 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | 18.7 | 12.9 | 1.7 | 33.3 |
Modifications | 1.0 | 3.3 | - | 4.3 |
Disposals | (2.4) | (2.7) | - | (5.1) |
Depreciation | (9.2) | (22.4) | (9.8) | (41.4) |
Impairment | (3.9) | (9.9) | - | (13.8) |
Movement in exchange rates | (6.2) | (2.3) | - | (8.5) |
At 31 December 2021 | 145.8 | 60.7 | 41.7 | 248.2 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | 12.6 | 27.8 | 2.4 | 42.8 |
Modifications | 0.4 | 2.9 | - | 3.3 |
Disposals | - | (0.3) | - | (0.3) |
Depreciation | (10.3) | (22.0) | (9.6) | (41.9) |
Impairment | (0.5) | (4.7) | - | (5.2) |
Movement in exchange rates | (5.5) | (1.2) | - | (6.7) |
At 31 December 2022 | 142.5 | 63.2 | 34.5 | 240.2 |
The additions of USD 42.8 million (2021: USD 33.3 million) mainly relate to N-7 for USD 12.5 million, OMM US for USD 7.7 million and OCIN for USD 6.4 million. The effect of movement in exchange rates of USD 6.7 million (2021: USD 8.5 million) mainly relates to OCIN and OCI UK, which have a different functional currency (Euro) compared to the Group\u2019s presentation currency.
$ millions | Goodwill | Licences and trademarks | Other intangible assets | Under construction | Total |
|---|---|---|---|---|---|
Cost | 1,808.8 | 74.0 | 5.4 | - | 1,888.2 |
Accumulated amortization and impairment | (1,322.9) | (74.0) | (4.8) | - | (1,401.7) |
At 1 January 2021 | 485.9 | - | 0.6 | - | 486.5 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | 1.1 | - | 1.1 |
Amortization | - | - | (0.2) | - | (0.2) |
Movement in exchange rates | (1.7) | - | - | - | (1.7) |
At 31 December 2021 | 484.2 | - | 1.5 | - | 485.7 |
Cost | 1,807.1 | 74.0 | 6.5 | - | 1,887.6 |
Accumulated amortization and impairment | (1,322.9) | (74.0) | (5.0) | - | (1,401.9) |
At 31 December 2021 | 484.2 | - | 1.5 | - | 485.7 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | 6.4 | 6.4 |
Reclassification | - | - | - | 1.1 | 1.1 |
Amortization | - | - | (0.3) | - | (0.3) |
Movement in exchange rates | (1.2) | - | (0.2) | - | (1.4) |
At 31 December 2022 | 483.0 | - | 1.0 | 7.5 | 491.5 |
Cost | 1,805.9 | 70.7 | 6.3 | 7.5 | 1,890.4 |
Accumulated amortization and impairment | (1,322.9) | (70.7) | (5.3) | - | (1,398.9) |
At 31 December 2022 | 483.0 | - | 1.0 | 7.5 | 491.5 |
Goodwill has been allocated to the cash generating units as follows:
Cash generating units | Reporting segment | 2022 | 2021 |
|---|---|---|---|
Egyptian Fertilizers Company ('EFC') | Fertiglobe | 440.0 | 440.0 |
OCI Beaumont ('OCIB') | Methanol US | 23.0 | 23.0 |
OCI Nitrogen ('OCIN') | Nitrogen Europe | 20.0 | 21.2 |
Total | \u00a0 | 483.0 | 484.2 |
The determination of the recoverable amounts for the cash generating units requires significant judgments and estimates, including projections of future cash flows from the businesses. The recoverable amounts have been estimated based on value in use.
The tests were carried out by discounting future cash flows to be generated from the continuing use of the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value growth rate, selling price outlook per product, natural gas prices and the number of expected operating days per plant. The terminal growth rate was determined based on the long term US Treasury constant maturity yield. The discount rate is a post-tax measure estimated based on the capital asset pricing model. Selling price and natural gas price assumptions are based on a published independent price outlook prepared by global experts. The other assumptions used are based on past experiences and external sources, but that are unpredictable and inherently uncertain.
The impairment tests are based on specific estimates for cash flow projections for the years 2023 to 2027 (this period captures the cyclical nature of the industry). For the subsequent years, the residual values were calculated based on the average EBITDA margin of the last two years of the projection period and whereby a perpetual growth rate of 4.08% was used. The estimated cash flows are discounted using a present value technique.
The following rates were applied in performing the impairment test:
Percentage | 2022 | 2021 |
|---|---|---|
Pre-tax discount rate | 19.85% | 12.62% |
Perpetual growth rate | 4.08% | 2.02% |
For all cash generating units the recoverable values significantly exceed their carrying amounts. No reasonably possible change in a key assumption would cause the cash generating unit\u2019s carrying amount to exceed the recoverable amount.
$ millions | 2022 | 2021 |
|---|---|---|
Trade receivables (net) | 500.7 | 577.2 |
Loans and trade receivables due from related parties | 25.8 | 5.0 |
Prepayments | 135.0 | 57.6 |
Other tax receivables | 102.4 | 116.9 |
Supplier advance payments | 39.0 | 31.2 |
Commodity and natural gas derivatives | 18.7 | 10.7 |
EUA derivatives | 0.4 | 42.7 |
Foreign currency derivatives | 3.8 | - |
Other derivatives | - | - |
Other receivables | 56.1 | 43.9 |
Total | 881.9 | 885.2 |
Non-current | 61.7 | 33.6 |
Current | 820.2 | 851.6 |
Total | 881.9 | 885.2 |
In 2018, the Group entered into a securitization agreement to sell certain trade receivables to an external financial institution. By doing so, the Group is able to receive cash flows from selected debtors sooner than would normally be the case.
Upon transfer of the balances, OCI derecognizes the trade receivables, since substantially all risks and rewards of ownership are transferred. The agreement permits securitization of trade receivables up to EUR 400.0 million (USD 428.4 million) (2021: EUR 200.0 million). As per 31 December 2022 an amount of EUR 257.1 million (2021: EUR 200.0 million) of trade receivables had been transferred. The transferred trade receivables are pledged as security under the securitization program.
The other tax receivable contains an amount of EGP 900 million (USD 36.4 million) relating to a payment made to the Egyptian Tax Authorities as part of the tax claim which will be refunded upon settlement of the tax claim. Reference is made to note OCI S.A.E. tax dispute. USD 61.4 million (2021: USD 53.1 million) is related to paid VAT to be collected in various jurisdictions.
The carrying amount of \u2018Trade and other receivables\u2019 as at 31 December 2022 approximates its fair value.
The aging of current trade receivables at the reporting date were as follows:
$ millions | 2022 | 2021 |
|---|---|---|
Neither past due nor impaired | 480.9 | 559.7 |
Past due 1 - 30 days | 16.3 | 14.2 |
Past due 31 - 90 days | 1.7 | 1.8 |
Past due 91 - 360 days | 1.5 | 1.2 |
More than 360 days | 0.3 | 0.3 |
Total | 500.7 | 577.2 |
Management believes that the unimpaired amounts that are past due by more than 30 days (USD 3.5 million) are collectible in full, based on historic payment behavior and extensive analysis of customer credit risk, including underlying customers\u2019 credit ratings if they are available. The Group has not recognized any allowance for trade receivables.
The following table shows the movements in the carrying amount of the Group\u2019s associates and joint ventures:
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | 494.9 | 468.7 |
Share in income | 21.7 | 7.3 |
Investment in Rainbow Holdco | - | 23.6 |
Dividends | (1.8) | (2.5) |
Other comprehensive income | 9.7 | - |
Effect of movement in exchange rates | (2.2) | (2.2) |
At 31 December | 522.3 | 494.9 |
Joint ventures | 1.2 | 1.1 |
Associates | 521.1 | 493.8 |
Total | 522.3 | 494.9 |
The Group has interests in the following associates and joint ventures:
Name | Type | Participation via | Country | Participation |
|---|---|---|---|---|
Firewater LLC (Natgasoline) | Associate | Firewater B.V. | United States | 50.0% |
White Rock Insurance PCC Ltd. | Associate | OCI N.V. | The Netherlands | 5.0% |
Sitech Manufacturing Services C.V. | Associate | OCI Nitrogen B.V. | The Netherlands | 35.0% |
Sitech Services B.V. | Associate | OCI Nitrogen B.V. | The Netherlands | 23.0% |
Rainbow Holdco B.V. | Associate | OCI Nitrogen B.V. | The Netherlands | 43.0% |
Egypt Green Hydrogen SAE | Associate | Fertiglobe Green Investments LLC | UAE | 20.0% |
Nitrogen Iberian Company SL. | Joint venture | OCI Nitrogen B.V. | Spain | 50.0% |
Shanxi Fenghe Melamine Company Ltd. | Joint venture | OCI Nitrogen B.V. | China | 49.0% |
The following table summarizes the financial information of the Group\u2019s associates and joint ventures (on a 100% basis):
| \u00a0 | 2022 | 2021 | ||||
|---|---|---|---|---|---|---|
$ millions | Associates | Joint ventures | Total | Associates | Joint ventures | Total |
Non-current assets | 2,041.4 | - | 2,041.4 | 2,161.8 | - | 2,161.8 |
Current assets | 457.1 | 33.7 | 490.8 | 315.0 | 15.5 | 330.5 |
Non-current liabilities | (1,115.1) | (5.5) | (1,120.6) | (1,121.4) | (8.7) | (1,130.1) |
Current liabilities | (294.1) | (25.7) | (319.8) | (323.1) | (4.5) | (327.6) |
Net assets | 1,089.3 | 2.5 | 1,091.8 | 1,032.3 | 2.3 | 1,034.6 |
Income | 1,109.6 | 43.4 | 1,153.0 | 867.3 | 27.2 | 894.5 |
Expenses | (1,060.8) | (43.1) | (1,103.9) | (844.7) | (27.0) | (871.7) |
Net profit | 48.8 | 0.3 | 49.1 | 22.6 | 0.2 | 22.8 |
The following chart summarizes the financial information of significant associates (on a 100% basis):
| \u00a0 | Firewater LLC | Sitech Services B.V. | ||
|---|---|---|---|---|
$ millions | 2022 | 2021 | 2022 | 2021 |
Non-current assets | 1,846.4 | 1,973.8 | 121.2 | 124.4 |
Current assets (excluding cash and cash equivalents) | 190.4 | 108.7 | 26.5 | 30.0 |
Cash and cash equivalents | 60.5 | 52.3 | 21.4 | 20.3 |
Non-current liabilities | (1,051.6) | (1,050.8) | (63.4) | (70.6) |
Current liabilities | (95.7) | (178.4) | (43.9) | (44.6) |
Net assets | 950.0 | 905.6 | 61.8 | 59.5 |
Group's share of net assets | 475.0 | 452.8 | 14.2 | 13.7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Revenues | 518.2 | 319.5 | 220.9 | 222.3 |
Depreciation | (153.9) | (157.4) | (11.9) | (13.8) |
Interest income | 0.8 | - | - | - |
Interest expense | (61.5) | (56.1) | (1.3) | (1.3) |
Profit / (loss) before taxes | 32.0 | (0.4) | 15.1 | 17.4 |
Tax expense | (8.5) | - | (3.5) | (5.0) |
Profit / (loss) after taxes | 23.5 | (0.4) | 11.6 | 12.4 |
Other comprehensive income | 19.4 | - | - | - |
Total comprehensive income | 42.9 | (0.4) | 11.6 | 12.4 |
Group's share in total comprehensive income | 22.8 | (0.2) | 2.7 | 2.8 |
Dividends | - | - | 5.9 | 11.0 |
Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is a methanol plant in Texas USA, and Sitech, which operates at the Chemelot site in Geleen, the Netherlands, where the factory of OCIN is based. The Chemelot site is also used by other companies.
$ millions | 2022 | 2021 |
|---|---|---|
Infrastructure and Growth Capital Fund LP (UAE) | 1.5 | 2.8 |
Notore Chemical Industries (Mauritius) | 15.1 | 13.6 |
Orascom Construction PLC (UAE) | 2.2 | 2.8 |
Total | 18.8 | 19.2 |
Non-current | 18.8 | 19.2 |
Current | - | - |
Total | 18.8 | 19.2 |
The Group holds an investment in the Infrastructure and Growth Capital Fund LP, which is managed by the Abraaj Group. Abraaj Holdings and Abraaj Investment Management are in provisional liquidation in the Cayman Islands and their court-appointed joint provisional liquidators, Deloitte and PwC, are overseeing the restructuring of Abraaj\u2019s debt.
The investment in Notore Chemical Industries represents a 13.18 percent shareholding. Further, OCI N.V. holds shares in Orascom Construction PLC.
$ millions | 2022 | 2021 |
|---|---|---|
Current tax | (241.5) | (242.5) |
Deferred tax | (172.3) | 105.4 |
Total income tax reported in profit or loss | (413.8) | (137.1) |
$ millions | 2022 | 2021 |
|---|---|---|
Current year | (223.6) | (222.5) |
Minimum tax requirements | (2.0) | (9.6) |
Dividend withholding tax | (18.0) | (10.6) |
Changes in estimates relating to prior years | 2.1 | 0.2 |
Income tax expense reported in profit or loss | (241.5) | (242.5) |
The main contributor to the current year tax expense is Fertil.
$ millions | 2022 | 2021 |
|---|---|---|
Origination and reversal of temporary differences | (246.3) | (60.5) |
Movement in uncertain tax positions | 48.9 | (92.7) |
Changes in tax rates | (0.4) | - |
Recognition of previously unrecognized tax assets | 39.6 | 264.7 |
Unrecognized tax assets | (14.1) | (0.1) |
Dividend withholding tax | - | (6.0) |
Income tax benefit / (expense) reported in profit or loss | (172.3) | 105.4 |
$ millions | 2022 | 2021 |
|---|---|---|
Cash flow hedges, effective portion of changes in fair value | 2.5 | 4.8 |
Income tax benefit reported in OCI | 2.5 | 4.8 |
OCI\u2019s operations are subject to income taxes in various foreign jurisdictions. The statutory income tax rates vary from 0.0% to 25.8%, which results in a difference between the effective income tax rate and the Netherlands\u2019 statutory income tax rate of 25.8%. Reconciliation of the statutory income tax rate in the Netherlands with the effective income tax rate can be summarized as follows:
$ millions | 2022 | % | 2021 | % |
|---|---|---|---|---|
Profit before income tax | 2,840.1 | \u00a0 | 1,295.9 | \u00a0 |
Enacted income tax rate in the Netherlands | 25.8% | \u00a0 | 25.0% | \u00a0 |
Income tax expense calculated at the enacted Dutch tax rate | (732.7) | (25.8) | (324.0) | (25.0) |
Effect of tax rates in foreign jurisdictions | 98.2 | 3.5 | 40.1 | 3.1 |
Expenses non-deductible | (44.1) | (1.6) | (58.5) | (4.5) |
Income not subject to tax | 208.6 | 7.3 | 123.2 | 9.5 |
Adjustments prior years | 2.1 | 0.1 | 0.2 | - |
Change in tax rates | (0.4) | - | - | - |
Recognition of previously unrecognized tax assets | 39.6 | 1.4 | 264.7 | 20.4 |
Unrecognized tax losses | (14.1) | (0.5) | - | - |
Unrecognized temporary differences | - | - | (65.6) | (5.1) |
Dividend withholding tax | (18.0) | (0.6) | (16.6) | (1.3) |
Minimum tax requirements | (2.0) | (0.1) | (9.6) | (0.7) |
Uncertain tax positions | 1.4 | - | (92.7) | (7.1) |
Foreign exchange effects | 47.5 | 1.7 | - | - |
Other | 0.1 | - | 1.7 | 0.1 |
Total income tax in profit or loss | (413.8) | (14.6) | (137.1) | (10.6) |
The Group\u2019s consolidated effective tax rate in respect of continuing operations for the period ended 31 December 2022 was 14.6% (2021: 10.6%). Compared to the statutory tax rate applicable in the Netherlands (25.8%) the following elements are the main drivers for the lower effective tax rate of 14.6%:
The main driver for the lower effective tax rate are the export activities of Sorfert and the status of EBIC as a free zone company. The profits generated by these activities are tax exempt and therefore result in a significant reduction of the effective tax rate for the group.
OCI's activities in foreign jurisdictions also contributed favorably to the effective tax rate. The blended statutory rate based on the 2022 profitability was 22.3% (2021: 21.9%).
The effective tax rate was also favorably impacted by currency devaluations on uncertain tax positions and lower non-deductible costs.
During 2022, a portion of BioMCN's property plant and equipment was impaired for tax purposes, thereby reversing a deductible temporary difference related to these assets. This tax benefit was offset against current year taxable income of BioMCN. During 2021, a deferred tax asset related to net operating losses was recognized at IFCo. The recognition resulted in a net deferred tax asset of USD 200.3 million and therefore was a significant component of the 2021 tax expense. All available net operating losses and tax credits available for IFCo were recognized in 2021. In addition to the losses recognized for IFCo, the BioMCN tax group was able to utilize all available tax losses in 2021 due to strong financial performance of OCI Fuels and the sale of excess EUAs of BioMCN.
On 20 December 2021, the jurisdictions of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (\u2018OECD BEPS\u2019) released the so-called Pillar Two Model Rules (also referred to as the \u201cAnti Global Base Erosion\u201d or \u201cGloBE\u201d Rules) which are designed to ensure that large multinational enterprises (MNEs) pay a minimum level of tax of 15% on the aggregated qualifying income arising in each jurisdiction where they operate (\u2018Pillar Two\u2019). On 15 December 2022, the EU Member States unanimously adopted an EU directive ensuring a global minimum level of taxation and agreed to apply these rules for fiscal years starting on or after 31 December 2023.
A taxpayer will fall within the scope of Pillar Two if it has foreign presence, more than EUR 750 million in consolidated revenues and is not listed as an out-of-scope entity.
A qualifying taxpayer calculates its effective tax rate for the aggregated activities in each jurisdiction where it operates and pays top-up tax for the difference between its effective tax rate per jurisdiction and the global minimum tax rate of 15%. Any resulting top-up tax is generally charged in the jurisdiction of the ultimate parent of the MNE (OCI N.V.).
The OCI group is at risk of a top-up tax for the activities held by the Fertiglobe group due to respective source jurisdictions having a potential effective tax rate below 15% as determined under the Pillar Two rules. As the Pillar Two rules allow for a levy by the source jurisdiction under the so-called Qualifying Domestic Minimum Top-up Tax as well as by an intermediate holding jurisdiction under the Partially Owned Parent Entity rules, it remains uncertain in which jurisdiction the top-up tax will need to be remitted as well as based on which ownership percentage. It is expected that in the course of 2023 other relevant jurisdictions will announce further guidance on the implementation of the Pillar Two rules in their respective jurisdictions.
Changes in deferred tax asset and liabilities (net):
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | (406.7) | (514.7) |
Profit or loss | (172.3) | 105.4 |
Reclassification to current income tax payable | 183.0 | - |
Effect of movement in exchange rates (recognized in equity) | (8.0) | 2.6 |
At 31 December | (404.0) | (406.7) |
Recognized deferred tax assets and liabilities:
| \u00a0 | Assets | Liabilities | Net | |||
|---|---|---|---|---|---|---|
$ millions | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
Intangible assets | 63.8 | 82.9 | (63.0) | (62.9) | 0.8 | 20.0 |
Property, plant and equipment | - | - | (650.8) | (587.1) | (650.8) | (587.1) |
Inventory | 13.2 | 0.4 | (16.8) | (14.9) | (3.6) | (14.5) |
Investment in partnership | - | - | - | (75.2) | - | (75.2) |
Trade and other receivables | 0.5 | 0.2 | (0.4) | (0.3) | 0.1 | (0.1) |
Loans and borrowings | 47.9 | 31.3 | 6.4 | (0.6) | 54.3 | 30.7 |
Trade and other payables | 23.4 | 12.9 | (13.9) | - | 9.5 | 12.9 |
Provisions | - | - | - | (3.0) | - | (3.0) |
Uncertain tax positions | - | - | (14.3) | (148.6) | (14.3) | (148.6) |
Undistributed earnings | - | - | (24.5) | (21.7) | (24.5) | (21.7) |
Operating losses carry forward and tax credits | 224.5 | 379.9 | - | - | 224.5 | 379.9 |
At 31 December | 373.3 | 507.6 | (777.3) | (914.3) | (404.0) | (406.7) |
Netting of fiscal positions | (292.0) | (299.9) | 292.0 | 299.9 | - | - |
Amounts recognized in the Statement of Financial Position | 81.3 | 207.7 | (485.3) | (614.4) | (404.0) | (406.7) |
The deferred tax asset relating to intangible assets mainly related to capitalized start-up costs for IFCo for USD 51.3 million. These costs are capitalized and amortized for tax purposes and were expensed for book purposes. Deferred tax liabilities relating to intangible assets mainly relates to goodwill of EFC for USD 62.6 million. This deferred tax liability will be reversed in case the asset is impaired. Deferred tax liabilities recognized in relation to property, plant and equipment will be realized over the depreciation period of the related asset, and mainly relate to IFCo (USD 252.8 million), Fertil (USD 232.4 million), OCIB (USD 81.2 million), EFC (USD 56.7 million) and OCIN (USD 22.8 million).
The deferred tax liability for investments in partnership has been reclassed to other categories, following a change in the partnership structure for OCIB.
The majority of the deferred tax liability was attributed to the property, plant and equipment category as presented in the table above.
The uncertain tax position of USD 14.3 million is disclosed below. The deferred tax liability \u2018undistributed earnings\u2019 relates to income tax consequences of undistributed earnings of subsidiaries and associates that will reverse in the foreseeable future. The Company does not anticipate any other income tax consequences resulting from the undistributed earnings of subsidiaries and associates.
Deferred tax assets relate to temporary differences, tax credits and tax losses carry forward. The Company has net tax losses carry forward and tax credits totalling USD 332.3 million, for which an amount of USD 184.0 million has not been recognized. The losses carry forward mainly relate to the US and Egyptian operations. Tax credits are available amounting to USD 76.2 million mainly relating to the US operations.
The group is subject to the application of complex tax laws in multiple jurisdictions. Application of these complex tax laws may lead to uncertainties in determining tax positions. We aim to resolve these uncertainties in discussions with the tax authorities. The financial effect of the existing uncertainties per balance sheet date are determined in accordance with IAS 12 and IFRIC 23, which requires us to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any uncertain tax position is judgmental.
As of 31 December 2022, the Group recorded uncertain tax positions to an amount of USD 14.3 million related to taxable profits, which is classified as a deferred tax liability. These uncertain tax positions are classified as deferred tax since settlement is not expected within 12 months after the reporting period. An uncertain tax position amounting to USD 183.0 million was reclassified from deferred tax liabilities to current tax liabilities as settlement is expected within twelve months after the reporting period. In total, the Group recorded USD 220.0 million of current uncertain tax positions. Expected interest and penalties related to uncertain income tax liabilities have been accrued for and are included in the uncertain tax positions and in the income tax expense. In addition to the uncertain tax liability, the Group also has a contingent tax asset that currently does not meet the recognition criteria of IFRIC 23. For more information we refer to note 28.
The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience.
On 29 December 2020 the Large Multinationals Directorate of the Algerian Tax Authorities (\u201cDGE\u201d) issued a letter to Sorfert in which its initial claim of DZD 7,296 million (USD 53.3 million) was maintained relating to the alleged non-compliance with the reinvestment obligations under a tax exemption as granted in 2014 by the Agency Nationale de Developpement de l\u2019Investissement (\u201cANDI\u201d). The DGE is of the opinion that Sorfert did not timely carry out the reinvestment obligations as required under ANDI exemption. As a result, the DGE required Sorfert to repay the full assumed tax benefit it enjoyed in relation herewith. On 1 February 2021, Sorfert appealed to this decision and as part of the appeal process made an initial payment of DZD 2,189 million, representing 30% of the total tax claim.
On 31 October 2021, the appeal of Sorfert to the initial claim was rejected by the Internal Appeals Committee of the DGE (and the total exposure was increased with a 25% penalty) and it had to pay DZD 1,824 million (20% of the initial claim and penalties added with penalties on the amount already paid in February 2021). Although Sorfert is of the opinion that it has complied with its reinvestment\u00a0 obligations, the DGE applied a different interpretation of the reinvestment law. Since there is no detailed guidance on the interpretation, the ability to firmly assess the technical merits of this case is limited. Due to this lack of detailed guidance and negative outcome of the first appeal, management is currently of the opinion that when weighing all the current facts and circumstances and application of interpretive guidance of IFRIC 23, it has become probable that Sorfert will be required to settle the remainder of the disputed tax amount.
On 24 February 2022 Sorfert pursued, supported by its external advisors, the next instance of appeal to the Central Appeals Commission as Sorfert management continues to have the view that Sorfert has satisfied the reinvestment obligations under the ANDI regime and therefore the grounds of the claim should be ruled as unfounded.
As a result, the Company recorded the full impact of the reinvestment case as an income tax expense amounting to USD 65.8 million in 2021. The remaining position as per 31 December 2022 is an uncertain tax position of USD 37.3 million, included in income tax payables.
Expiration scheme of gross unrecognized carry forward tax losses, tax credits and deductible temporary differences:
2022 | Less than 1 year | Between 1 and 5 years | Between 5 and 10 years | Between 10 and 15 years | Between 15 and 20 years | Unlimited | Total |
|---|---|---|---|---|---|---|---|
Temporary differences | 15.5 | 61.9 | 74.7 | - | - | - | 152.1 |
Tax losses and credit carry forwards | 45.2 | 176.0 | 7.8 | - | - | 852.6 | 1,081.6 |
Tax assets - unrecognized | 60.7 | 237.9 | 82.5 | - | - | 852.6 | 1,233.7 |
2021 | Less than 1 year | Between 1 and 5 years | Between 5 and 10 years | Between 10 and 15 years | Between 15 and 20 years | Unlimited | Total |
|---|---|---|---|---|---|---|---|
Temporary differences | 28.5 | 113.7 | 137.1 | - | - | - | 279.3 |
Tax losses and credit carry forwards | 46.8 | 204.5 | 7.3 | - | - | 803.5 | 1,062.1 |
Tax assets - unrecognized | 75.3 | 318.2 | 144.4 | - | - | 803.5 | 1,341.4 |
The above unrecognized temporary differences, tax losses and tax credit carry forwards relate to tax jurisdictions in which OCI has suffered a tax loss in the current or a preceding period. Significant judgment is required in determining whether deferred tax assets can be utilized. OCI determines this based on expected taxable profits arising from the reversal of recognized deferred tax liabilities and based on budget, cash flow forecasts and impairment models and the recent history of taxable results. Where utilization is not considered probable, deferred tax assets are not recognized. The above unrecognized temporary differences, tax losses and credit carry forwards mainly stem from our Dutch, Egyptian and US operations.
Changes in income tax receivables and payables:
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | (68.9) | (7.5) |
Profit or loss | (241.5) | (242.5) |
Changes in estimates relating to prior years | 2.1 | 0.2 |
Other comprehensive income | 2.5 | 4.8 |
Payments | 241.9 | 171.6 |
Reversal of uncertain tax positions | 3.3 | 1.1 |
Reclassification from deferred tax liabilities (note 12.4) | (183.0) | - |
Effect of movement in exchange rates | (2.5) | 3.4 |
At 31 December | (246.1) | (68.9) |
Income tax receivable | 5.6 | 3.4 |
Income tax payable | (251.7) | (72.3) |
Total | (246.1) | (68.9) |
$ millions | 2022 | 2021 |
|---|---|---|
Finished goods | 280.6 | 185.2 |
Raw materials and consumables | 25.3 | 21.3 |
Spare parts, fuels and others | 115.5 | 137.0 |
Total | 421.4 | 343.5 |
During 2022, the total write-downs amount to USD 22.8 million (2021: USD 19.2 million) of which USD 15.1 million (2021: USD 17.6 million) relates to spare parts. During 2022 there were no reversals of write downs (2021: nil). As a result of the IFCo refinancing in 2022, no inventory has been pledged as security for external loans of IFCo 2021: USD 36.7 million). Reference is made to note 18.
$ millions | 2022 | 2021 |
|---|---|---|
Cash on hand | 0.1 | 0.2 |
Bank balances | 1,692.1 | 1,439.3 |
Restricted cash | 24.8 | 140.8 |
Total | 1,717.0 | 1,580.3 |
Restricted cash in 2022 decreased as result of the refinancing at IFCo. In 2021, restricted cash of USD 128.4 million (2022: nil) was held as part of IFCo\u2019s debt service requirements for the outstanding bonds, of which USD 43.4 million was held as a required deposit in a major maintenance reserve account and is to be used to fund capital expenditure, and USD 80.0 million was held as required deposit in a project operating reserve account which is to be used to fund operating expenses in three month increments.
The remaining restricted balances are held as collateral against letters of credit and letters of guarantees issued.
The movements in the number of shares can be summarized as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
Number of shares at 1 January | 210,306,101 | 210,306,101 |
Number of issued shares | 405,903 | - |
On issue at 31 December - fully paid | 210,712,004 | 210,306,101 |
Par value per share (in EUR) | 0.02 | 0.02 |
At 31 December (in millions of USD) | 5.6 | 5.6 |
The authorized capital of the Company amounts to EUR 12.0 million. The authorized capital is divided into 600 million shares, with a nominal value of EUR 0.02 each.
The share capital movements relate to the increase and subsequent decrease in the nominal value of the ordinary shares, to facilitate a capital repayment in relation to the distribution. The distribution to shareholders that elected to receive a capital repayment (USD 1,069.1 million) was debited from share capital. The remaining distribution of USD 14.4 million was debited to retained earnings as a dividend distribution to owners of the Company.
The sale of shares in the OCI Methanol Group resulted in an increase in retained earnings of USD 221.4 million and an increase in non-controlling interests of USD 7.8 million. Reference is made to note OCI Methanol Group.
An amount of USD 9.2 million related to share-based compensation expense was recognized in retained earnings.
The acquisition of additional shares in EBIC resulted in an increase in retained earnings of USD 6.0 million and a decrease in non-controlling interests of USD 44.4 million. Reference is made to note 17.
The IPO of Fertiglobe resulted in an increase in retained earnings of USD 332.7 million and an increase in non-controlling interests of USD 141.0 million. Reference is made to note 17.
An amount of USD 8.5 million related to share-based compensation expense was recognized in retained earnings.
$ millions | Hedge reserve | Financial assets at fair value through other comprehensive income | Currency translation | Treasury shares | Total |
|---|---|---|---|---|---|
At 1 January 2021 | 5.7 | (7.0) | (322.4) | (14.7) | (338.4) |
Movement in hedge reserve | (16.9) | - | - | - | (16.9) |
Currency translation differences | - | - | (21.7) | - | (21.7) |
Financial assets at fair value through other comprehensive income | - | (10.8) | - | - | (10.8) |
Other comprehensive income | (16.9) | (10.8) | (21.7) | - | (49.4) |
Treasury shares sold / delivered | - | - | - | 4.8 | 4.8 |
Treasury shares acquired | - | - | - | (1.0) | (1.0) |
At 31 December 2021 | (11.2) | (17.8) | (344.1) | (10.9) | (384.0) |
Movement in hedge reserve | 19.4 | - | - | - | 19.4 |
Currency translation differences | - | - | (78.0) | 0.8 | (77.2) |
Financial assets at fair value through other comprehensive income | - | - | - | - | - |
Other comprehensive income | 19.4 | - | (78.0) | 0.8 | (57.8) |
Treasury shares sold / delivered | - | - | - | 15.6 | 15.6 |
Treasury shares acquired | - | - | - | (2.0) | (2.0) |
Issuing shares | - | - | - | (14.5) | (14.5) |
At 31 December 2022 | 8.2 | (17.8) | (422.1) | (11.0) | (442.7) |
OCI is a company incorporated under Dutch law. In accordance with the Dutch Civil Code, legal reserves have to be established in certain circumstances. The hedging reserve, the financial assets at fair value through other comprehensive income reserve, the currency translation reserve and other legal reserves are legal reserves that limit distributions to shareholders to the extent that these reserves individually have a credit balance.
During the financial year ended 31 December 2022 the company acquired 54,935 shares (2021: 40,583) and sold and delivered out of share-based payment plans 155,586 shares (2021: 195,512).
| \u00a0 | 2022 | 2021 |
|---|---|---|
Number of shares | 306,346 | 406,997 |
Average carrying value per share (USD) | 35.95 | 23.43 |
Total (in millions USD) | 11.0 | 9.5 |
Foreign exchange effect | - | 1.4 |
Total carrying value of treasury shares (in millions of USD) | 11.0 | 10.9 |
The non-controlling interests in the respective entities can be summarized as follows:
2022 | Fertil | EFC | EBIC | Sorfert | OCI Methanol Group | Other1 | Total |
|---|---|---|---|---|---|---|---|
Non-controlling interests | 50.00% | 50.06% | 62.50% | 74.51% | 15.00% | - | - |
Non-current assets | 808.7 | 818.8 | 174.6 | 670.9 | 169.2 | 1,028.3 | 3,670.5 |
Current assets | 141.6 | 209.8 | 66.3 | 827.4 | 189.8 | 1,935.2 | 3,370.1 |
Non-current liabilities | (149.1) | (60.1) | (4.2) | (143.1) | (94.3) | (1,891.9) | (2,342.7) |
Current liabilities | (56.3) | (145.9) | (37.2) | (125.9) | (305.7) | (2,010.9) | (2,681.9) |
Net assets | 744.9 | 822.6 | 199.5 | 1,229.3 | (41.0) | (939.3) | 2,016.0 |
Revenues | 593.5 | 439.4 | 326.9 | 973.5 | 239.7 | 3,502.1 | 6,075.1 |
Profit | 249.9 | 153.0 | 155.2 | 617.6 | 15.3 | (2.1) | 1,188.9 |
Other comprehensive income | - | - | - | 46.7 | 1.4 | - | 48.1 |
Total comprehensive income | 249.9 | 153.0 | 155.2 | 664.3 | 16.7 | (2.1) | 1,237.0 |
Dividend cash flows | - | - | (87.4) | (374.8) | (105.0) | (545.0) | (1,112.2) |
2021 | Fertil1 | EFC1 | EBIC1 | Sorfert1 | Other2 | Total |
|---|---|---|---|---|---|---|
Non-controlling interests | 50.00% | 50.06% | 62.50% | 74.51% | - | - |
Non-current assets | 843.8 | 820.0 | 176.2 | 516.7 | 19.9 | 2,376.6 |
Current assets | 213.9 | 75.1 | 122.5 | 451.4 | 2,124.0 | 2,986.9 |
Non-current liabilities | (159.9) | (128.4) | (4.4) | (193.7) | (981.0) | (1,467.4) |
Current liabilities | (112.8) | (97.2) | (40.9) | (60.0) | (2,076.0) | (2,386.9) |
Net assets | 785.0 | 669.5 | 253.4 | 714.4 | (913.1) | 1,509.2 |
Revenues | 466.3 | 307.3 | 195.9 | 614.6 | 1,916.0 | 3,500.1 |
Profit | 151.6 | 83.9 | 84.4 | 280.4 | (12.0) | 588.3 |
Other comprehensive income | - | - | - | (33.0) | 0.7 | (32.3) |
Total comprehensive income | 151.6 | 83.9 | 84.4 | 247.4 | (11.3) | 556.0 |
Dividend cash flows | - | - | (3.9) | (189.5) | (606.3) | (799.7) |
The sale of shares in the OCI Methanol Group resulted in an increase in non-controlling interests of USD 7.8 million.
Total dividends declared to non-controlling interests amounted to USD 1,056.4 million (2021: USD 788.1 million).
Impact difference in profit sharing non-controlling interests: In the partnership agreement of Sorfert between OCI and the partner, a profit-sharing arrangement is agreed, where the other investor will receive a relatively higher portion of dividends in compensation for lower natural gas prices arranged for by the partner, which is recognized in cost of sales. As a result of this agreement the non-controlling interests increased by USD 318.4 million (2021: USD 104.6 million). The effect of the profit sharing agreement represents the gross amount allocated to the partner. This amount is subsequently diluted by other non-controlling interests in Fertiglobe.
In 2021, the Fertiglobe IPO resulted in an increase in non-controlling interests of USD 141.0 million.
In 2021, the acquisition of additional shares in EBIC resulted in a decrease in non-controlling interests of USD 44.4 million.
On 18 February 2022, a 15% stake of the OCI Methanol Group was sold for a total consideration of USD 375.0\u00a0million. As a result of this transaction OCI's share in the OCI Methanol Group decreased from 100% to 85%. The following table summarises the effect of the transaction on the Company's equity attributable to owners of the Company:
$ millions | \u00a0 |
|---|---|
Proceeds from sale of shares | 375.0 |
Fees related to the sale of shares | (1.3) |
Fair value of earn-out consideration | (17.1) |
Net proceeds from the sale of shares | 356.6 |
Non-controlling interests | 135.2 |
Effect on equity attributable to owners of the Company | 221.4 |
In August 2021, Fertiglobe acquired an additional 25% stake in OCI MEPCO Cayman Limited from KBR. As a result of this transaction OCI's share in Egypt Basic Industries Corporation (EBIC) increased from 34.8% to 43.5% (prior to the Fertiglobe IPO). The consideration of USD 43.0 million includes a transfer of KBR's receivable related to unpaid dividends of USD 4.6 million, resulting in a net consideration of USD 38.4 million.
The following table summarises the effect of the transaction on the Company's equity attributable to shareholders:
$ millions | \u00a0 |
|---|---|
Carrying amount of non-controlling interests acquired | 44.4 |
Consideration paid to non-controlling interests in cash | (38.4) |
Effect on equity attributable to owners of the Company | 6.0 |
On 27 October 2021, Fertiglobe listed on the Abu Dhabi Securities Exchange (\"ADX\") under the ticker \u201cFERTIGLB\u201d and the International Securities Identification Numbering (Isin) code \u201cAEF000901015\u201d.
OCI sold 8% of the total shares in Fertiglobe, in total 13.8% of the Fertiglobe\u2019s share capital was listed. Following the IPO, OCI\u2019s shareholding percentage in Fertiglobe is 50% plus one share (and OCI retains control over Fertiglobe). OCI\u2019s proceeds from the sale of its shares amount to USD 461.1 million and fees related to Fertiglobe IPO amount to USD 14.1 million, resulting in net proceeds of USD 447.0 million.
As part of the equity offering indemnifications were agreed between shareholders. In 2021, this resulted in a change of the indemnifications previously recorded as part of the Fertiglobe PPA. Reference is made to note 21.
The following table summarises the effect of the transaction on the Company's equity attributable to shareholders:
$ millions | \u00a0 |
|---|---|
Proceeds from sale of shares | 461.1 |
Fees related to the sale of shares | (14.1) |
Net proceeds from the sale of shares | 447.0 |
Indemnities | 26.7 |
Effect on total equity | 473.7 |
Non-controlling interests | 141.0 |
Effect on equity attributable to owners of the Company | 332.7 |
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | 3,800.8 | 4,416.6 |
Proceeds from loans | 1,073.0 | 2,248.3 |
Repayment / proceeds from bank overdraft facility | (354.8) | 398.4 |
Repayment and redemption of loans and borrowings | (1,587.8) | (3,186.1) |
Newly incurred transaction costs / (bond) premiums | (2.5) | (10.0) |
Amortization of transaction costs / (bond) premiums | 28.1 | 39.3 |
Effect of movement in exchange rates | (81.1) | (105.7) |
At 31 December | 2,875.7 | 3,800.8 |
Non-current | 2,572.3 | 3,290.2 |
Current | 303.4 | 510.6 |
Total | 2,875.7 | 3,800.8 |
The effect of movement in exchange rate mainly relates to EUR and DZD denominated loans, which are different from the Group\u2019s presentation currency. Information about the Group\u2019s exposure to interest rate, foreign currency and liquidity risk is disclosed in the financial risk and capital management paragraph in note 6.
Borrowing company | Type of loan | Principal amount ($ millions) | Interest rate | Date of maturity | Carrying amount ($ millions)1 | Long-term portion ($ millions) | Short-term portion ($ millions) | Fair value ($ millions) | Collateral / guarantee |
|---|---|---|---|---|---|---|---|---|---|
Sorfert | Secured loan facility | USD 961.3 | Algerian bank interest rate plus rate of 1.95% | June 2026 | 231.9 | 165.6 | 66.3 | N/a | 2 |
IFCo | Unsecured senior notes | USD 150.0 | Fixed 4.00% | December 2032 | 148.1 | 148.1 | - | 143.7 | 3 |
| \u00a0 | \u00a0 | USD 344.4 | Fixed 5.00% | December 2042 | 349.6 | 349.6 | - | 323.6 | \u00a0 |
| \u00a0 | \u00a0 | USD 344.4 | Fixed 5.00% | December 2050 | 345.4 | 345.4 | - | 322.7 | \u00a0 |
Fertiglobe plc | Unsecured loan facility | USD 1,100.0 | LIBOR + 1.05% | February 2023 (extendable) | 900.0 | 900.0 | - | 900.0 | 4 |
| \u00a0 | \u00a0 | USD 300.0 | SOFR +1.50% | January 2026 | - | - | - | - | \u00a0 |
| \u00a0 | \u00a0 | USD 600.0 | SOFR +1.75% | January 2028 | - | - | - | - | \u00a0 |
Fertiglobe plc | Unsecured loan facility | USD 600.0 | SOFR +1.4% | December 2027 | - | - | - | - | N/a |
OCI N.V. | Unsecured senior notes | USD 324.0 | Fixed 4.625% | October 2025 | 285.8 | 285.8 | - | 273.9 | 5 |
| \u00a0 | \u00a0 | EUR 360.0 | Fixed 3.625% | October 2025 | 384.0 | 384.0 | - | 380.9 | \u00a0 |
OCI N.V. | Unsecured loan facility | USD 1,100.0 | Libor + 0.85% | April 2027 | (6.2) | (6.2) | - | - | 6 |
OCIN | Inventory financing | USD 213.7 | EURIBOR +0.85% | No defined maturity | 213.8 | - | 213.8 | 213.8 | 7 |
FD, FFT | Trade finance facility | USD 95.0 | SOFR + 1.00% | Renewed annually | 23.3 | - | 23.3 | 23.3 | N/a |
FD, FFT, Fertil | Working capital facility | USD 50.0 | LIBOR/EIBOR/SOFR + 1.50% | April 2023 (extendable) | - | - | - | - | 8 |
Total 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 2,875.7 | 2,572.3 | 303.4 | N/a | \u00a0 |
Borrowing company | Type of loan | Principal amount ($ millions) | Interest rate | Date of maturity | Carrying amount ($ millions)1 | Long-term portion ($ millions) | Short-term portion ($ millions) | Fair value ($ millions) | Collateral / guarantee |
|---|---|---|---|---|---|---|---|---|---|
Sorfert | Secured loan facility | USD 961.3 | Algerian bank interest rate | June 2026 | 294.0 | 228.6 | 65.4 | N/a | 2 |
IFCo | Secured senior notes | USD 429.0 | Fixed 5.25% | December 2025 | 427.0 | 427.0 | - | 559.0 | 3 |
| \u00a0 | \u00a0 | USD 425.4 | Fixed 5.25% | December 2050 | 413.0 | 413.0 | - | 423.5 | \u00a0 |
Fertiglobe plc | Secured loan facility | USD 1,100.0 | LIBOR + 1.05% | February 2023 (extendable) | 1,091.8 | 1,097.6 | (5.8) | 1,100.0 | 4 |
Fertiglobe plc | Secured loan facility | USD 300.0 | LIBOR + 1.75% | August 2026 | - | - | - | - | N/a |
OCI N.V. | Secured senior notes | USD 324.0 | Fixed 4.625% | October 2025 | 321.3 | 321.3 | - | 336.6 | 5 |
| \u00a0 | \u00a0 | EUR 360.0 | Fixed 3.625% | October 2025 | 405.7 | 405.7 | - | 423.4 | \u00a0 |
OCI N.V. | Secured loan facility | USD 850.0 | LIBOR + 1.50% | April 2023 | 397.0 | 397.0 | - | 397.0 | 6 |
OCI N.V. | Bank overdraft | N/a | N/a | No defined maturity date | 383.0 | - | 383.0 | N/a | N/a |
OCIN | Inventory financing | USD 70.2 | 1.25% | No defined maturity, facility is uncommitted with monthly roll overs | 68.0 | - | 68.0 | 68.0 | 7 |
Total 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 3,800.8 | 3,290.2 | 510.6 | N/a | \u00a0 |
Certain loan agreements include financial covenants. The definitions for calculating the financial covenants applicable to the facilities within the Group can be summarized as follows:
Debt Service Coverage Ratio: Income Available (revenue earned less operating expenses) to Debt Service (net finance charges including the capital element of finance leases) or gross profit less change in working capital to interest and principal payments.
Debt to Equity Ratio: Gross Debt (current and long-term debt obligations) to total Equity (the sole capital of the borrower).
Net Leverage Ratio: the Group\u2019s Net Debt (meaning the aggregate amount of all obligations of the Group, excluding intergroup loans and cash and cash equivalents, but including finance leases) to adjusted EBITDA.
Interest Coverage Ratio: EBITDA, EBIT or Distribution Receipts (cash received by the borrower by way of dividends or repayments of loans) to Finance Charges (meaning finance payments in respect of borrowings including the interest element of finance leases).
As per 31 December 2022 all financial covenants were met.
In the event the respective borrowing companies would not comply with the covenant requirements, in total an amount of USD 1,132.1 million (2021: USD 2,648.6 million) of the loans would become immediately due. Refer to note 6.2 for additional discussion of the Company\u2019s liquidity risk. The external borrowings include change in control clauses that enable the lenders to call the financing provided.
Except for the IFCo bonds, the senior secured notes of OCI N.V. and the loan of Sorfert, the fair value of all other loans and facilities is calculated within hierarchy category level 2. The bonds of IFCo and OCI N.V. are measured following hierarchy category 1. The fair value of the loan of Sorfert cannot be determined as no observable market data is available.
Reference is made to note 6.2.2 Refinancing activity.
Proceeds from borrowings in 2022 totaled an amount of USD 1,073.0 million (2021: USD 2,248.3) million, which consisted of net proceeds of the IFCo bonds, changes in OCIN's inventory financing and proceeds of the trade finance facility of FD and FFT.
Redemptions of borrowings in 2022 totaled an amount of USD 1,587.8 million (2021: USD 3,186.1 million), which consisted of the partial repayment of the USD bond at OCI N.V., full repayment of the IFCo bonds, partial repayment of the Fertiglobe bridge loan, regular installments for borrowings and changes in the outstanding amounts of the revolving credit and trade finance facilities within the Group.
As of 31 December 2022, the Group had not drawn external bank facilities in the amount of USD 1,750.0 million (2021: USD 800.0 million). This relates to an external bank facility at OCI N.V. of USD 1,100.0 million, Fertiglobe revolving credit facility of USD 600.0 million and a working capital facility of USD 50.0 million. The Fertiglobe term loan of USD 900.0 million, which is undrawn at 31 December 2022, will replace the Fertiglobe bridge loan in January 2023.
As of 31 December 2022, the bank overdraft facility of OCI N.V. amounts to zero (2021: USD 383.0 million). Reference is made to note 6.4.
The Group leases a number of office spaces, warehouses, land, employee accommodation, computers, machinery and vehicles. Lease terms vary from 1 year to indefinite renewal options. Calculations of the lease obligation for leases with indefinite renewal options are done using a lease term based on the expected renewal periods and can be more than 100 years.
$ millions | Non-current lease obligations | Current lease obligations | Total |
|---|---|---|---|
At 1 January 2021 | 248.6 | 43.6 | 292.2 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 |
Payments | - | (47.3) | (47.3) |
Accretion of interest | 8.1 | 0.4 | 8.5 |
Additions | 30.5 | 2.3 | 32.8 |
Disposals | (4.8) | - | (4.8) |
Transfers | (40.6) | 40.6 | - |
Modifications | 3.3 | 1.0 | 4.3 |
Effect of movement in exchange rates | (7.6) | (0.9) | (8.5) |
At 31 December 2021 | 237.5 | 39.7 | 277.2 |
Movements in carrying amount: | \u00a0 | \u00a0 | \u00a0 |
Payments | - | (47.4) | (47.4) |
Accretion of interest | 7.6 | 0.6 | 8.2 |
Additions | 33.2 | 9.8 | 43.0 |
Disposals | (0.4) | 0.1 | (0.3) |
Transfers | (46.7) | 46.7 | - |
Modifications | 3.3 | - | 3.3 |
Effect of movement in exchange rates | (7.0) | (0.9) | (7.9) |
At 31 December 2022 | 227.5 | 48.6 | 276.1 |
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Trade payables | \u00a0 | 273.7 | 425.3 |
Trade payables due to related parties | (30) | 142.4 | 87.9 |
Amounts payable under the securitization agreement | \u00a0 | 177.4 | 149.7 |
Accrued dividend to non-controlling interests | \u00a0 | 102.8 | 4.1 |
Other payables | \u00a0 | 77.8 | 66.9 |
EUA liabilities | 36.7 | 116.2 | |
Employee benefit liabilities | \u00a0 | 14.1 | 14.5 |
Accrued expenses | \u00a0 | 345.9 | 264.9 |
Accrued interest | \u00a0 | 12.6 | 10.9 |
Customer advance payment / deferred revenue | \u00a0 | 69.1 | 222.7 |
Other tax payable | \u00a0 | 4.5 | 5.3 |
Derivative financial instruments | \u00a0 | 141.4 | 12.8 |
Total | \u00a0 | 1,398.4 | 1,381.2 |
Non-current | \u00a0 | 114.1 | 23.7 |
Current | \u00a0 | 1,284.3 | 1,357.5 |
Total | \u00a0 | 1,398.4 | 1,381.2 |
Information about the Group\u2019s exposure to currency and liquidity risk is included in note 6. The carrying amount of \u2018Trade and other payables\u2019 approximates its fair value.
Derivative financial instruments consist of commodity gas hedges contracts in order to hedge future gas price levels. The fair value of these contracts amounts to USD 141.4 million as per 31 December 2022 (2021: USD 12.8 million). All derivatives included in trade and other payables are classified in the fair value hierarchy level 2.
$ millions | Claims and other provisions, onerous contracts | Donation provision | Total |
|---|---|---|---|
At 1 January 2022 | 36.4 | 121.1 | 157.5 |
Recorded during the year | 51.2 | - | 51.2 |
Used during the year | (9.1) | - | (9.1) |
Reversed | (9.9) | - | (9.9) |
Effect of the movement in exchange rates | (1.3) | (44.2) | (45.5) |
At 31 December 2022 | 67.3 | 76.9 | 144.2 |
Non-current | 13.9 | - | 13.9 |
Current | 53.4 | 76.9 | 130.3 |
Total | 67.3 | 76.9 | 144.2 |
As a consequence of the Fertiglobe IPO, all other shareholders of Fertiglobe plc will be indemnified for the outcome of certain legacy legal exposures. An indemnification asset of USD 28.2 million (2021: USD 26.7 million) was recognized in other receivables as the offsetting criteria are not met. Reference is made to note 17.
The Group is involved in various litigations, arbitrations and commercial disputes. In cases where it is probable that the outcome of the legal proceedings and commercial disputes will be unfavorable, and the financial outcome can be measured reliably, a provision has been recognized. Reference is made to note 28 for detailed information with respect to major ongoing litigations and claims for which no provision has been recognized.
Articles 133 and 134 of the Egyptian Labor Law No. 12 of 2003 requires all businesses in Egypt with more than 10 employees to contribute 1% of their net profit into a National Training Fund (\u2018Fund\u2019). No application guidance was issued and its constitutionality was being challenged on multiple grounds including duplication of financial burden and contradiction to advantages under other laws.
As such, this Law was not applied in general by businesses in the region. Following a supreme court ruling which found the article to be constitutional in March 2022, the General Secretary of the National Training Fund issued a circular on 18 May 2022 which re-triggered the obligation on employers to pay such contribution of 1% of their annual net profit to the Fund in accordance with Article 134 of the Egyptian Labor Law.
External legal counsel assisted in analysing the key aspects in preparing a best estimate for such contribution. Key assumptions included i) the treatment of such contribution as tax, fee or other, ii) the statute of limitation and iii) how to consider forex translation. Other considerations included the applications for tax free zone entities (relevant for EBIC) and potential waiver or reduction as result of an internal training program (EFC) and impact of interest and penalties. The maximum exposure is estimated to be around USD 167.0 million. When taking a statute of limitation of five years into consideration the maximum exposure is limited to USD 31.9 million (excluding interest or penalties). Based on the most likely scenario according to external legal counsel, OCI has recognized a total provision of USD 17.7 million (USD 14.5 million for OCI SAE, USD 3.2 million for EFC and none for EBIC) considering the treatment as a fee, a statute of limitations of five years and translation at the respective year exchange rate.
Considering the current limited application guidance and as this is impacting majority of business in Egypt, there is an expectation that further application guidance will be issued by the regulator in due course.
On 13 November 2014, the Company announced that it had decided to transfer the rights to the amounts receivable from the first installment already paid to the Egyptian Tax Authority in 2013 of EGP 2,500 million (approximately USD 360.0 million at the 2014 exchange rate) to a Egyptian development fund (reference is made to note 28 for the claim in relation to the OCI S.A.E. tax dispute). No formal agreement has been drafted with the fund yet and no payments have been made to the fund. The transfer of rights has been approved by OCI\u2019s Board of Directors on 12 November 2014.
Following the guidance under IAS 37 (constructive obligations), the Company has presented the transfer of rights to the fund as a donation provision. In March 2015, the Company received a cheque of EGP 1,904 million (approximately USD 266.2 million at the 2015 exchange rate) from the Egyptian Authorities. At year end 2022 the carrying amount in US dollars had been reduced to USD 76.9 million, due to the devaluation of the EGP since March 2015.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Raw materials and consumables and finished goods | \u00a0 | 5,351.0 | 3,203.5 |
Maintenance and repair | \u00a0 | 163.0 | 150.2 |
Employee benefit expenses | (22.2) | 454.6 | 408.9 |
Depreciation, amortization and impairment | 599.9 | 891.6 | |
Consultancy expenses | \u00a0 | 43.2 | 34.0 |
Other | \u00a0 | 126.2 | 67.9 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
Cost of sales | \u00a0 | 6,365.4 | 4,489.7 |
Selling, general and administrative expenses | \u00a0 | 372.5 | 266.4 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
A gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs.
In February 2021, the extreme cold weather and spike in gas prices in the US resulted in temporary downtime at IFCo. Due to this downtime IFCo sold back its forward purchased gas to its supplier, which resulted in a gain from the resale of gas of USD 61.0 million. This figure does not include and is partly offset by the lost margin due to the lower production volumes and additional expenses associated with the downtime. The gain on the resale of gas is recorded as part of raw materials and consumables and finished goods.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Wages and salaries | \u00a0 | 293.8 | 263.0 |
Social securities | \u00a0 | 9.3 | 8.2 |
Employee incentive plans | \u00a0 | 54.5 | 51.2 |
Pension cost | \u00a0 | 26.7 | 24.3 |
Share-based compensation expenses | (22.3) | 9.2 | 8.5 |
Other employee expenses | \u00a0 | 61.1 | 53.7 |
Total | \u00a0 | 454.6 | 408.9 |
During the financial year ended 31 December 2022, the number of key executives was 4 (2021: 4 key executives), which represents the Executive Board members; Nassef Sawiris (Executive Chair), Hassan Badrawi (Chief Financial Officer) Maud de Vries (Chief Legal and Human Capital Officer) and Ahmed El-Hoshy (Chief Executive Officer). During the financial year ended 31 December 2022, the number of staff employed in the Group amounted to 4,059 employees (2021: 3,853 employees).
OCI has currently award agreements outstanding under four different share-based compensation plans. In 2022 share based compensation Awards were granted under the Performance Share Unit Plan for Executive Directors, the One Off Share Awards, the Restricted Stock Unit Plan and the Employee Performance Share Unit Plan.
In 2019, a Performance Share Unit plan was introduced for the Executive Board as replacement for the performance share plan. The Performance Share Unit plan comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts. Up to 2021, Total Shareholder Return (\u2018TSR\u2019) was the only performance measure. In 2021, the plan was amended and new performance measures were added. For each Award, starting with the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market.
Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the members of the Executive Board for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Performance Share Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 170,650 | 230,612 | 316,729 | 230,558 |
Fair value at grant date (EUR) | 4,075,463 | 4,065,690 | 4,336,020 | 4,486,659 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 | 13.69 | 19.46 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% | -0.660% | -0.659% |
Expected share price volatility | 44.3% | 44.2% | 34.5% | 34.7% |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 230,612 | 316,729 | 230,558 |
Vested in 2022 | - | - | - | - |
Expired in 2022 | - | - | - | (230,558) |
Dividend equivalent shares1 | 23,263 | 31,436 | 43,179 | - |
Outstanding 31 December 2022 | 193,913 | 262,048 | 359,908 | - |
To reward the exceptional performance of the Executive Directors in 2021, One Off Share Awards were granted to the CEO, CFO and CLHCO. The One Off Share Awards granted on May 25th, 2022 comprise of conditional stock units which each cover the value of one fully paid OCI share. For the purpose of this exceptional One Off Share Award, vesting of the conditional stock units shall not be subject to forward-looking performance conditions. Apart from this, the terms and conditions of the One Off Share Awards are in line with the terms and conditions as set out in the Executive Performance Stock Unit Plan 2019. The One Off Share Awards concern a grant of conditional stock units that will generally vest, subject to the Executive Directors\u2019 continued engagement as an Executive Director of the Company on the date which is the third anniversary of the Date of Grant, with Shares (to the extent applicable, net of tax or following sell-to-cover) being subject to a two-year holding period, in line with the Dutch Corporate Governance Code. The fair value of the One Off Share Awards is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of One Off Share Awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
One Off Share Award | 2022 Grant |
|---|---|
Conditional shares granted | 49,519 |
Fair value at grant date (EUR) | 1,736,136 |
Fair value at grant date (EUR per share) | 35.06 |
Vesting period at issuance (years) | 3 |
Dividend yield | 0.0% |
Outstanding 31 December 2021 | - |
Dividend equivalent shares1 | 6,749 |
Outstanding 31 December 2022 | 56,268 |
For the level below the Board, a Restricted Stock Units Plan was implemented to replace the Bonus Matching Plan. First award granted under this plan was made in 2019. Executive Directors are not eligible for RSU grants. The Restricted Stock Units Plan comprises the conditional granting of shares in OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan will be paid out partly in cash in accordance with the short-term incentive plan and partly in awards in accordance with this RSU plan. Shares will vest for one third of the restricted stock units comprising the award at the second anniversary of the date of grant and for two thirds of the restricted stock units comprising the award on the third anniversary of the date of grant subject to still being employed by OCI. The RSU entitles the participants to dividend equivalents.
The fair value of the RSUs awarded is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of RSU share awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
Restricted Stock Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 251,415 | 132,666 | 89,900 | 206,253 |
Fair value at grant date (EUR) | 7,130,129 | 2,409,215 | 945,748 | 5,455,392 |
Fair value at grant date (EUR per share) | 28.36 | 18.16 | 10.52 | 26.45 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 125,157 | 79,027 | 120,615 |
Forfeited in 2022 | - | (9,869) | (2,729) | (1,931) |
Vested in 2022 | - | (1,748) | (35,122) | (118,684) |
Initial awards (new joiners) | - | 13,652 | 10,925 | - |
Dividend equivalent shares1 | 33,426 | 16,797 | 7,728 | - |
Outstanding 31 December 2022 | 284,841 | 143,989 | 59,829 | - |
In 2021, the Employee Performance Share Units Plan was introduced for key Employees. The Employee Performance Share Units Plan is similar to the Executive Director Performance Share Units Plan. For the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market. Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the employees for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Employee Performance Share Units Plan | 2022 Grant | 2021 Grant |
|---|---|---|
Conditional shares granted | 12,234 | 14,006 |
Fair value at grant date (EUR) | 292,172 | 246,926 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 |
Vesting period at issuance (years) | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% |
Expected share price volatility | 44.3% | 44.2% |
Dividend yield | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 14,006 |
Vested in 2022 | - | - |
Dividend equivalent shares1 | 1,666 | 1,909 |
Outstanding 31 December 2022 | 13,900 | 15,915 |
$ millions | 2022 | 2021 |
|---|---|---|
Insurance proceeds | 28.5 | - |
Other | 1.1 | 1.4 |
Total | 29.6 | 1.4 |
Insurance proceeds of USD 28.5 million mainly relate to IFCo (USD 20.5 million) and OCIN (USD 5.0 million).
$ millions | \u00a0 | 2022 | 2021 |
|---|---|---|---|
Other | \u00a0 | 0.5 | 1.2 |
Total | \u00a0 | 0.5 | 1.2 |
$ millions | 2022 | 2021 |
|---|---|---|
Interest income on loans and receivables | 7.0 | 4.0 |
Derivatives gain | 31.2 | 0.3 |
Foreign exchange gain | 256.1 | 30.3 |
Finance income | 294.3 | 34.6 |
Interest expense and other financing costs on financial liabilities measured at amortized cost | (243.5) | (281.0) |
Derivatives loss | (7.8) | - |
Foreign exchange loss | (229.0) | (27.8) |
Finance cost | (480.3) | (308.8) |
Net finance cost recognized in profit or loss | (186.0) | (274.2) |
Included in the interest expense and other financing costs on financial liabilities measured at amortized cost are debt refinancing costs of USD 68.5 million (2021: USD 61.7 million). This consists of a call premium of USD 49.8 million (2021: USD 37.4 million) related to early redemption of bonds and accelerated amortization of USD 18.7 million (2021: USD 24.3 million).
For the interest expense related to lease obligations, reference is made to note 19.
The foreign exchange gains and losses mainly relate to external financing, FX derivatives and to the revaluation of intercompany balances in foreign currencies. The increase in foreign exchange gains and losses is driven by the depreciation of the Egyptian Pound and Euro against the US Dollar in 2022, compared to a more stable environment in 2021. In addition, foreign exchange gains driven by intercompany loans have impacted the profit and loss statement in the first half year as these loans had been dedesignated from the net investment hedge of foreign operations. Prior year and from July 2022 onwards these loans are not expected to be settled in the near future as a result of which the accounting treatment of the related foreign exchange gains or losses are recognised in other comprehensive income, instead of profit or loss.
$ millions | 2022 | 2021 |
|---|---|---|
i. Basic | \u00a0 | \u00a0 |
Net profit attributable to shareholders | 1,237.4 | 570.5 |
Weighted average number of ordinary shares (basic) | 210,274,265 | 209,852,247 |
Basic earnings per ordinary share | 5.885 | 2.719 |
| \u00a0 | \u00a0 | \u00a0 |
ii. Diluted | \u00a0 | \u00a0 |
Net profit attributable to shareholders | 1,237.4 | 570.5 |
Weighted average number of ordinary shares (diluted) | 211,556,266 | 211,032,092 |
Diluted earnings per ordinary share | 5.849 | 2.703 |
Shares | 2022 | 2021 |
|---|---|---|
Issued ordinary shares at 1 January | 210,611,918 | 210,306,101 |
Effect of treasury shares held | (337,653) | (453,854) |
Weighted average number of ordinary shares outstanding as per 31 December | 210,274,265 | 209,852,247 |
Adjustment for assumed equity-settled share-based compensation | 1,282,001 | 1,179,845 |
Weighted average number of ordinary shares outstanding (diluted) as per 31 December | 211,556,266 | 211,032,092 |
OCI\u2019s reportable segments are consistent with how the Chief Operating Decision Maker (\u2018CODM\u2018) manages the business operations and views the markets it serves. The reportable segments are: Methanol US, Methanol Europe, Nitrogen US, Nitrogen Europe and Fertiglobe. The organizational structure of the segments is based on a number of factors that the CODM uses to evaluate, view, and direct business operations.
The Company derives the results of the business segments directly from its internal management reporting system. All segments are managed separately because they require different operating strategies and use their own assets and employees. The entities grouped together in each segment have similar regulatory environments, macroeconomic conditions, banking, insurance and public utilities.
The Group has two revenue streams from contracts with customers that relate to the sale of goods, namely, Nitrogen and Methanol.
Segment revenues includes revenues from sales to external customers and intersegment revenues.
EBITDA, Adjusted EBITDA and profit / (loss) are the primary performance measure used by our CODM to evaluate operating results and allocate capital resources among segments. These are also the profitability measures used to set management and executive incentive compensation goals. \u2018Other\u2019 consists of share-based compensation and certain corporate general and administrative expenses that are not allocated to the segments. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be reasonably and consistently re-allocated.
A summary description of each reportable segment is as follows:
This segment consists of OCI Beaumont (OCIB), Natgasoline LLC, the trading entity OCI Methanol Marketing LLC (OMM US) and OCI USA Inc., an entity that serves as the US corporate income tax payer for OCI Beaumont and OMM LLC.
OCI Beaumont is an integrated methanol and ammonia production facility that is strategically located on the Texas Gulf Coast near Beaumont. Natgasoline LLC is a world scale methanol production complex in Beaumont, Texas. OCI and its partner, Consolidated Energy Limited (CEL)/G2X, each own 50% stakes.
Natgasoline LLC is an equity-accounted investee of the Group, reference is made to note 10. Natgasoline commenced production in 2018 and due to the similarities in regulatory environment, products and customer base, this equity-accounted investee has been included in the \u2018Methanol US\u2019 segment as of 2018 on a proportionally consolidated basis. The elimination column is used to eliminate the proportionally consolidated figures of Natgasoline that are included in the US Methanol segment and to include the investment in, and results from Natgasoline (associate) and thereby reconcile to the Group\u2019s reported figures.
OCIB and Natgasoline sell mainly domestically; primarily to industrial customers in and around the U.S. Gulf Coast through pipeline connections to adjacent customers, port access with dedicated methanol and ammonia import / export jetties, and truck loading facilities for both methanol and ammonia. OMM US is a trading entity that sells products produced by OCIB and Natgasoline. OCI USA Inc. is the US corporate taxpayer for OCIB and OMM US.
This segment consists of BioMCN, located at Delfzijl in the Netherlands, OCI Fuels Ltd, OCI Fuels B.V. and OCI Methanol Marketing B.V. (OMM EU). BioMCN is one of Europe\u2019s largest methanol producers. BioMCN produces two types of methanol: bio-methanol and regular (also known as grey) methanol. OCI Fuels is a trading entity that supplies biogas, which is processed into bio-methanol and bio-fuel, and sells the bio-methanol products produced by BioMCN. OMM EU is a trading entity that sells grey methanol products produced by BioMCN.
This segment consists of Iowa Fertilizer Company (IFCo), a wholly owned nitrogen fertilizer complex in Iowa, the trading entity, N-7 and Iowa Intermediate Fertilizer Holding, an entity that serves as the US corporate income tax payer for Iowa Fertilizer Company. IFCo products are sold via the trading entity.
This segment consists of OCI Nitrogen (OCIN). OCI Nitrogen is Europe\u2019s second largest integrated nitrates fertilizer producer and the world\u2019s largest melamine producer with production site in Geleen, the Netherlands.
The Fertiglobe segment consists of the following entities: Egyptian Fertilizers Company (EFC), Egypt Basic Industries Corporation (EBIC), Sorfert Algerie (Sorfert), Ruwais Fertilizer Industries LLC (Fertil), Fertiglobe Distribution (FD), Fertiglobe Fertilizer Trading (FFT, previously OCI Fertilizer Trading), OCI Fertilizer Trade and Supply (OFTS), Fertiglobe plc and OCI S.A.E. EFC is a granular urea producer in Egypt. EBIC is an ammonia plant in Egypt. Sorfert is a partnership with Algeria\u2019s state-owned oil and gas authority and is one of the largest nitrogen fertilizer producers in North Africa. Fertil is a producer of urea fertilizer in Abu Dhabi. FD, FFT and OFTS are trading entities based in Abu Dhabi, Dubai and the Netherlands.
This segment consists of all remaining entities of the Group, including OCI Clean Ammonia LLC. OCI Clean Ammonia LLC is identified as an operating segment, but due to the pre-operating phase aggregation criteria are not yet met.
2022 | Methanol US1 | Methanol Europe | Nitrogen US | Nitrogen Europe | Fertiglobe | Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
Total revenues | 908.9 | 498.9 | 1,936.5 | 2,382.8 | 5,027.5 | - | (1,041.5) | 9,713.1 |
EBITDA2 | 284.2 | 108.3 | 709.7 | 239.1 | 2,451.7 | (81.4) | (107.4) | 3,604.2 |
Adjusted EBITDA2 | 372.1 | 109.1 | 744.3 | 252.6 | 2,473.0 | (75.9) | 15.8 | 3,891.0 |
Income from equity-accounted investees | - | - | - | 8.8 | - | - | 13.0 | 21.8 |
Depreciation, amortization and impairment | (155.2) | (18.4) | (155.6) | (76.0) | (266.3) | (5.4) | 77.0 | (599.9) |
Finance income | 11.7 | 0.7 | 6.0 | 24.3 | 67.1 | 228.8 | (44.3) | 294.3 |
Finance expense | (45.0) | (1.9) | (142.7) | (30.3) | (192.9) | (142.1) | 74.6 | (480.3) |
Income tax (expense) / income | (23.6) | - | (126.8) | (41.3) | (239.2) | 13.0 | 4.1 | (413.8) |
Net profit | 72.1 | 88.7 | 290.6 | 124.6 | 1,820.4 | 12.9 | 17.0 | 2,426.3 |
Equity-accounted investees | - | - | - | 47.1 | - | 0.2 | 475.0 | 522.3 |
Capital expenditures non-current assets | 77.7 | 14.0 | 36.3 | 96.6 | 111.1 | 69.2 | (4.4) | 400.5 |
Total assets | 1,551.5 | 95.0 | 2,095.1 | 927.4 | 5,310.0 | 365.7 | (573.6) | 9,771.1 |
2021 | Methanol US1 | Methanol Europe | Nitrogen US | Nitrogen Europe | Fertiglobe | Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
Total revenues | 789.2 | 531.3 | 827.7 | 1,256.8 | 3,310.7 | - | (397.0) | 6,318.7 |
EBITDA2 | 393.0 | 148.5 | 344.3 | 209.3 | 1,571.7 | (75.1) | (137.3) | 2,454.4 |
Adjusted EBITDA2 | 370.8 | 151.4 | 344.3 | 207.6 | 1,550.5 | (67.5) | (30.6) | 2,526.5 |
Income from equity-accounted investees | - | - | - | 7.5 | - | - | (0.2) | 7.3 |
Depreciation, amortization and impairment | (151.0) | (303.7) | (152.4) | (92.1) | (267.1) | (4.0) | 78.7 | (891.6) |
Finance income | 58.0 | 1.1 | 0.4 | 6.9 | 19.6 | 76.9 | (128.3) | 34.6 |
Finance expense | (89.7) | (3.1) | (130.8) | (9.6) | (52.7) | (179.3) | 156.4 | (308.8) |
Income tax (expense) / income | (38.6) | 2.6 | 197.9 | (29.0) | (295.1) | 25.1 | - | (137.1) |
Net profit | 171.7 | (154.6) | 259.4 | 93.0 | 976.4 | (156.4) | (30.7) | 1,158.8 |
Equity-accounted investees | - | - | - | 42.0 | - | 0.2 | 452.7 | 494.9 |
Capital expenditures non-current assets | 89.7 | 21.7 | 44.7 | 62.9 | 84.6 | 4.5 | (72.9) | 235.2 |
Total assets | 1,882.2 | 87.8 | 2,417.9 | 801.8 | 4,921.1 | 318.2 | (617.4) | 9,811.6 |
The geographic information below analyses the Group\u2019s revenue (by destination of the goods) and noncurrent assets (by the Company where the activities are being operated). OCI has no single customer that represents 10 percent or more of revenues and therefore information about major customers is not provided.
| \u00a0 | Revenue | Non-current assets | ||
|---|---|---|---|---|
$ million | 2022 | 2021 | 2022 | 2021 |
Europe | 4,247.2 | 2,268.6 | 565.3 | 563.1 |
Americas | 2,823.7 | 2,371.8 | 2,841.5 | 2,963.1 |
Africa & Middle East | 1,092.1 | 362.5 | 3,384.2 | 3,492.3 |
Asia & Oceania | 1,550.1 | 1,315.8 | 15.9 | 14.3 |
Total | 9,713.1 | 6,318.7 | 6,806.9 | 7,032.8 |
The key performance obligation of the OCI group is always the supply of products as specified in the contracts with customers, possible additional performance obligations included are transportation and related cost of insurance, depending on the incoterms. The Group has two revenue streams from contracts with customers that relate to the supply of products i.e. Nitrogen and Methanol. No impairment losses on receivables have been recognized (reference is made to note 6.1 and note 9).
Based on the IFRS 15 accounting policies adopted, the following modifications to the contracts are allowed: discounts and rebates. They are all taken into account when presenting the segment revenues. Time value of money is not considered to be relevant for the amendment of the revenue amount, as the payment terms are short. Also, there are no non-cash considerations that would need to be disclosed separately. No information is provided about remaining performance obligations at current and comparative year end date that have an original expected duration of one year or less, as allowed by IFRS 15.
OCI has a committed guarantee facility with Rabobank for a maximum guarantee amount of EUR 300.0 million (USD 321.3 million). Under this guarantee facility, EUR 58.4 million (USD 62.6 million) has been utilized. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes.
OCI has an uncommitted guarantee facility with Tokio Marine Europe SA, Z\u00fcrich Insurance plc and Huler Hermes SA for a maximum guarantee amount of EUR 150.0 million (USD 160.7 million). Under this guarantee facility, EUR 79.1 million (USD 84.7 million) has been drawn. The facility is used to issue a performance guarantee on behalf of OCIN.
OCI has an uncommitted guarantee facility for the issuance of payment undertakings with BNP Paribas for an amount of USD 53.7 million. The facility is utilized for USD 5.5 million. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes.
In the normal course of business, the Group entities and joint ventures are involved in some arbitration, commercial disputes or court cases as defendants or claimants. These litigations and commercial disputes are carefully monitored by the entities\u2019 and Group management and legal counsels, and are regularly assessed with due consideration for possible insurance coverage and recourse rights on third parties. OCI does not expect these proceedings to result in liabilities that have a material effect on the Company\u2019s financial position.
In cases where it is probable that the outcome of the proceedings will be unfavorable, and the financial outcome can be measured reliably, a provision has been recognized in the financial statements which is disclosed in note 21 Provisions. It should be understood that, in light of possible future developments, such as (a) potential additional lawsuits, (b) possible future settlements, and (c) rulings or judgments in pending lawsuits, certain cases may result in additional liabilities and related costs. At this point in time, OCI cannot estimate any additional amount of loss or range of loss in excess of the recorded amounts with sufficient certainty to allow such amount or range of amounts to be meaningful. Moreover, if and to the extent that the contingent liabilities materialize, they are typically paid over a number of years and the timing of such payments cannot be predicted with confidence.
While the outcome of said cases, claims and disputes cannot be predicted with certainty, we believe, based upon legal advice and information received, that the final outcome will not materially affect our consolidated financial position but could be material to our results of operations or cash flows in any one accounting period.
On 5 March 2018, the lower criminal court of Oran (Tribunal du p\u00f4le p\u00e9nal sp\u00e9cialis\u00e9 d\u2019Oran) issued a judgment against Sorfert regarding an alleged violation of exchange control regulations as well as the regulation of public markets and public service delegations. The lower court ordered Sorfert to pay a fine in the amount of 5.5 billion Algerian dinars (about USD 39.9 million) and an officer of the company received a fine of DZD 2.8 billion (about USD 20.0 million). On 7 March 2018, Sorfert lodged an appeal with the Court of Appeal of Oran, Algeria who upheld the verdict against Sorfert in its judgment rendered on 28 November 2018. In January 2019, Sorfert lodged an appeal against this judgment with the Supreme Court. Sorfert disputes the validity of the judgment and continues to vigorously defend its case. To date, no Supreme Court hearing has been scheduled and during the appeal period the enforcement of the judgment is suspended. Various renowned local and international law firms have examined OCI\u2019s legal position. No provision has been recorded by the Group related to this matter.
In October 2012, the Egyptian Tax Authority (\u2018ETA\u2019) raised a tax evasion claim against our Egyptian subsidiary, OCI S.A.E. The tax dispute related to the sale of OCI S.A.E.\u2019s cement business to Lafarge SA in 2007. This was filed against OCI S.A.E. despite there being no official investigation. Although OCI S.A.E. and its legal and tax advisors believed that the aforementioned transaction was exempted of tax, management entered into a settlement agreement whereby EGP 7.1 billion would be paid over a 5-year period.
The agreement was followed by payment of a first installment of EGP 2.5 billion in 2013. Following the change in government, the company was exonerated from the tax claim by the Egyptian Public Prosecutor on 18 February 2014 and subsequently by the ETA\u2019s Independent Appeals Committee on 4 November 2014. The ETA appealed this decision. On 13 November 2014 OCI S.A.E. announced that it would transfer its rights to EGP 1.9 billion undue paid tax amounts to a Egyptian development fund and recorded a provision for this amount, reference is made to note 21 Provisions.
Despite the ETA Independent Appeals Committee ruling in favor of OCI S.A.E., OCI S.A.E. was still held to pay EGP 900 million. OCI S.A.E. has lodged a reimbursement claim for this amount. As this dispute occurred prior to the demerger of the Engineering and Construction Group that formed Orascom Construction PLC (\u2018OC\u2019) in 2015, any liabilities and any recoveries are shared on a 50:50 basis between OCI N.V. and OC. Should the ETA win their appeal, OCI N.V.\u2019s maximum share of the tax claim would be EGP 2.3 billion, which equates to approximately USD 92.9 million (2021: USD 146.3 million). In January 2023, a judgement was issued in favor of OCI S.A.E. rejecting the appeal of the ETA. The ETA has appealed the decision.
Sorfert has a contractual asset retirement obligation in connection with the lease of its land. This asset retirement obligation is being disclosed as a contingent liability because it is not possible to determine a reliable estimate in both timing and value of this obligation.
OCIN entered into agreements with Royal DSM N.V. and associated company Sitech for respectively the lease of the sites (land) on which it operates its plant and site services/usage. These agreements have an indefinite term and include an asset dismantling obligation and the obligation to clean up environmental pollution occurred after zero measurement. These obligations have not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management.
Fertil entered into an agreement with ADNOC for the lease of the land on which it operates its plant. The agreement has an indefinite term and includes an asset dismantling obligation and the obligation to clean up environmental pollution occurred after decommissioning. This obligation has not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management.
A sequence of historical transactions resulted in (gross) deductible temporary tax differences of USD 1.4 billion. However, due to a difference in interpretation of local tax regulations, the deductible temporary differences do currently not yet meet the recognition criteria of IAS 12 / IFRIC 23. As such, at 31 December 2022, the Group has an uncertain tax liability of USD 182.9 million.
The Group is currently under examination of the tax authorities in the respective jurisdiction. A conclusion on the treatment is expected within the next twelve months. As such, in 2022, the related uncertain tax liability of USD 182.9 million has been reclassified from a non-current uncertain tax position to a current uncertain tax position.
OCI Fuels B.V. enters into biogas purchase agreements around the USA for the production of biomethanol in the methanol plant in Beaumont (Texas, USA) and for sale to the USA transportation market. Through these long-term agreements OCI purchases biogas for a fixed price. Per 31 December 2022, an expected 15.3 million mmbtu biogas will be purchased over the coming years (2023 - 2029). The total expected purchase commitment per 31 December 2022 amounts to USD 147.7 million (2021: USD 154.1 million). Total contract volume is 39.0 million mmbtu and the total contract value is USD 364.5 million (2021: USD 371.3 million).
Capital commitments relate to purchase commitments of property, plant and equipment.
$ millions | 2022 | 2021 |
|---|---|---|
OCI Beaumont | - | 0.1 |
Sorfert | 6.7 | 19.1 |
Fertil | 34.5 | 19.8 |
Fertiglobe plc | 30.1 | - |
BioMCN | 0.2 | 5.5 |
OCIN | 20.7 | 9.8 |
OCI Fuels USA | - | 0.9 |
EBIC | 1.2 | 4.6 |
EFC | 6.2 | 3.7 |
IFCo | 48.3 | 2.4 |
OCI Clean Ammonia | 202.4 | - |
Total | 350.3 | 65.9 |
In November 2022, OCI Clean Ammonia LLC signed an offtake agreement for the offtake of blue hydrogen to supply our greenfield blue ammonia facility located on the Gulf Coast of the United States. The agreement involves the offtake of approximately 200,000 metric tonnes of blue hydrogen per annum. The pricing of blue hydrogen is largely derived from natural gas and power prices, supplemented by a fixed fee component. The commencement of the offtake agreement will be aligned with the commencement of production at our blue ammonia plant, which is planned for Q1 2025. OCI N.V. acts as a guarantor for any operational liabilities resulting from this offtake agreement.
OCI has entered into long-term agreements for a project to capture and sequester CO2 produced on-site at IFCo. The project is expected to be completed by Q1 2025.
Transactions with related parties occur when a relationship exists between the Company and their directors and key management personnel. The Company engages in the following types of related party transactions:
Those with NNS Luxembourg Sarl for occasional consultancy services and Residencia Europe Ltd for personnel recharges.
The Executive Chair\u2019s travel as per his right to expense the use of a private aircraft for OCI-related business travel.
The Company\u2019s former construction arm which was divested on 7 March 2015 and incorporated as a separate legal entity, \"Orascom Conctruction plc\" (OC) in the United Arab Emirates. The Sawiris family, the majority shareholders of OCI, also owns the majority of the outstanding shares of OC, which qualifies OC and its subsidiaries to be classified as related parties.
The following is an overview of the transactions and outstanding amounts as at 31 December 2022:
Related party | Relation | Recharges | AR at year end | Purchases | AP at year end | Interest expense |
|---|---|---|---|---|---|---|
Orascom Construction Egypt | OC Group company | - | 1.1 | 0.1 | 0.1 | - |
Orascom Construction Holding Cyprus | OC Group company | - | - | - | 0.9 | - |
Orascom Construction plc | OC Group company | - | - | - | - | 9.8 |
NNS Luxembourg Sarl | Related via shareholder Sarl | - | 0.5 | - | - | - |
Residencia Europe Ltd | Related via shareholder | 1.0 | 0.6 | - | - | - |
Nassef Sawiris | Executive chair | - | - | 0.9 | 0.5 | - |
Total | \u00a0 | 1.0 | 2.2 | 1.0 | 1.5 | 9.8 |
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
Related party | Relation | Recharges | AR at year end | Purchases | AP at year end | Interest expense |
|---|---|---|---|---|---|---|
Orascom Construction Egypt | OC Group company | - | - | 0.3 | 0.9 | - |
Orascom Construction Holding Cyprus | OC Group company | - | - | - | 0.8 | - |
Orascom Construction plc | OC Group company | - | - | 0.2 | - | - |
NNS Luxembourg Sarl | Related via shareholder Sarl | 0.6 | 0.2 | - | - | - |
Nassef Sawiris | Executive chair | - | - | 0.7 | 0.4 | - |
Total | \u00a0 | 0.6 | 0.2 | 1.2 | 2.1 | - |
OCI conducts transactions with its associates and joint ventures (as defined in note 3.2, together \u201cEquity-accounted investees\u201d) in the ordinary course of business by buying and selling goods and services from and to various equity-accounted investees within the group. For more information we refer to note 10.
The following is an overview of the transactions and outstanding amounts as at 31 December 2022:
Related party | Relation | Revenue | AR at year end | Purchases | AP at year end | Interest income |
|---|---|---|---|---|---|---|
Natgasoline LLC | Related via associate | 11.8 | 0.5 | 262.1 | 54.0 | - |
Sitech Manufacturing Services C.V. | Associate | - | - | 145.2 | 73.8 | - |
Utility Support Group B.V. | Related via associate | 69.7 | 1.8 | 253.4 | 10.2 | - |
Sitech Services B.V. | Associate | - | - | 17.1 | 2.9 | - |
Nitrogen Iberian Company SL | Joint venture | 39.0 | 19.6 | - | - | - |
Shanxi Fenghe Melamine Co Ltd. | Joint venture | 0.3 | - | 24.0 | - | - |
Egypt Green Hydrogen SAE | Associate | - | 1.7 | - | - | - |
Total | \u00a0 | 120.8 | 23.6 | 701.8 | 140.9 | - |
The following is an overview of the transactions and outstanding amounts as at 31 December 2021:
Related party | Relation | Revenue | AR at year end | Purchases | AP at year end | Interest income |
|---|---|---|---|---|---|---|
Natgasoline LLC | Related via associate | 8.6 | - | 179.4 | 32.4 | - |
Sitech Manufacturing Services C.V. | Associate | - | - | 124.5 | 36.0 | - |
Utility Support Group B.V. | Related via associate | 31.5 | 3.7 | 114.8 | 14.5 | 1.0 |
Sitech Services B.V. | Associate | - | 0.1 | 18.1 | 2.4 | - |
Nitrogen Iberian Company SL | Joint venture | 24.3 | - | - | 0.5 | - |
Shanxi Fenghe Melamine Co Ltd. | Joint venture | 0.1 | 1.0 | 31.8 | - | - |
Total | \u00a0 | 64.5 | 4.8 | 468.6 | 85.8 | 1.0 |
As these are transactions with equity-accounted investees and related parties, the terms and conditions may not necessarily be the same as transactions negotiated between third parties. Management believes that the terms and conditions of all transactions and outstanding balances with our equity-accounted investees and related parties are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services.
We considered the members of the Board of Directors (Executive and Non-executive) to be the key management personnel as defined in IAS 24 \u2018Related parties\u2019. For transactions with key management personnel reference is made to note 30. No other benefits or remuneration were provided to or have been entered into with above mentioned key management personnel except as disclosed below.
During the financial year ended 31 December 2022, the total remuneration costs relating to the Executive Directors amounted to USD 13.3 million (2021: USD 13.1 million) consisting of the elements listed in the table below:
2022 | Age | Base salary1 | Fertiglobe fees2 | Annual bonus | Share-based compensation | Total remuneration |
|---|---|---|---|---|---|---|
N. Sawiris | 61 | 1,000,000 | 150,000 | - | 1,415,114 | 2,565,114 |
H. Badrawi | 46 | 1,150,000 | 150,000 | 1,298,546 | 1,345,970 | 3,944,516 |
M. de Vries | 50 | 560,000 | 16,335 | 632,335 | 654,897 | 1,863,567 |
A. El-Hoshy | 38 | 1,562,5003 | 150,000 | 1,764,328 | 1,469,509 | 4,946,337 |
Total | \u00a0 | 4,272,500 | 466,335 | 3,695,209 | 4,885,490 | 13,319,534 |
2021 | Age | Base salary1 | Fertiglobe fees | Annual bonus | Share-based compensation | Total remuneration |
|---|---|---|---|---|---|---|
N. Sawiris | 60 | 1,000,000 | - | - | 2,086,600 | 3,086,600 |
H. Badrawi | 45 | 1,150,000 | - | 1,262,010 | 1,385,030 | 3,797,040 |
M. de Vries | 49 | 560,000 | - | 614,544 | 509,197 | 1,683,741 |
A. El-Hoshy | 37 | 1,307,6922 | - | 1,714,688 | 1,533,043 | 4,555,423 |
Total | \u00a0 | 4,017,692 | - | 3,591,242 | 5,513,870 | 13,122,804 |
At 31 December 2022, the Executive Directors held 815,869 conditional performance shares (2021: 777,899 including the conditional performance shares granted to A. El-Hoshy prior to his appointment to the Board).
| \u00a0 | Outstanding year end 2021 | Granted conditional | Granted Dividend Equivalent Shares | Vested | Expired | Outstanding year end 2022 | Vesting date |
|---|---|---|---|---|---|---|---|
N. Sawiris | 116,002 | - | \u00a0 | - | (116,002) | - | 07-02-2022 |
| \u00a0 | 135,354 | - | 18,453 | - | - | 153,807 | 07-02-2023 |
| \u00a0 | 58,235 | - | 7,938 | - | - | 66,173 | 07-02-2024 |
| \u00a0 | - | 43,093 | 5,875 | - | - | 48,968 | 07-02-2025 |
N. Sawiris total | 309,591 | 43,093 | 32,266 | - | (116,002) | 268,948 | \u00a0 |
H. Badrawi | 66,701 | - | - | - | (66,701) | - | 07-02-2022 |
| \u00a0 | 77,829 | - | 10,610 | - | - | 88,439 | 07-02-2023 |
| \u00a0 | 66,971 | - | 9,130 | - | - | 76,101 | 07-02-2024 |
| \u00a0 | - | 49,558 | 6,756 | - | - | 56,314 | 07-02-2025 |
H. Badrawi total | 211,501 | 49,558 | 26,496 | - | (66,701) | 220,854 | \u00a0 |
M. de Vries | 32,485 | - | 4,428 | - | - | 36,913 | 07-02-2023 |
| \u00a0 | 32,612 | - | 4,445 | - | - | 37,057 | 07-02-2024 |
| \u00a0 | - | 24,132 | 3,289 | - | - | 27,421 | 07-02-2025 |
M. de Vries total | 65,097 | 24,132 | 12,162 | - | - | 101,391 | \u00a0 |
A. El-Hoshy | 47,8551 | - | - | - | (47,855) | - | 07-02-2022 |
| \u00a0 | 71,0611 | - | 9,688 | - | - | 80,749 | 07-02-2023 |
| \u00a0 | 72,794 | - | 9,923 | - | - | 82,717 | 07-02-2024 |
| \u00a0 | - | 53,867 | 7,343 | - | - | 61,210 | 07-02-2025 |
A. El-Hoshy total | 191,710 | 53,867 | 26,954 | - | (47,855) | 224,676 | \u00a0 |
At 31 December 2022, the Executive Directors held 56,268 One Off Share Awards (2021: nil).
| \u00a0 | Outstanding year end 2021 | Granted conditional | Granted Dividend Equivalent Shares | Vested | Expired | Outstanding year end 2022 | Vesting date |
|---|---|---|---|---|---|---|---|
A. El-Hoshy | - | 18,737 | 2,554 | - | - | 21,291 | 25-05-2025 |
A. El-Hoshy total | - | 18,737 | 2,554 | - | - | 21,291 | \u00a0 |
H. Badrawi | - | 18,737 | 2,554 | - | - | 21,291 | 25-05-2025 |
H. Badrawi total | - | 18,737 | 2,554 | - | - | 21,291 | \u00a0 |
M. de Vries | - | 12,045 | 1,641 | - | - | 13,686 | 25-05-2025 |
M. de Vries total | - | 12,045 | 1,641 | - | - | 13,686 | \u00a0 |
At 31 December 2022, the Executive Directors held 14,750 RSU shares (2021: 47,212).
| \u00a0 | Outstanding year end 2021 | Granted conditional | Granted Dividend Equivalent Shares | Vested | Expired | Outstanding year end 2022 | Vesting date |
|---|---|---|---|---|---|---|---|
M. de Vries | 9,509 | - | - | (9,509) | \u00a0 | - | 17-04-2022 |
M. de Vries total | 9,509 | - | \u00a0 | (9,509) | - | - | \u00a0 |
A. El-Hoshy | 18,231 | - | - | (18,231) | - | - | 17-04-2022 |
| \u00a0 | 6,491 | - | - | (6,491) | - | - | 07-02-2022 |
| \u00a0 | 12,981 | - | 1,769 | - | - | 14,750 | 07-02-2023 |
A. El-Hoshy total | 37,703 | - | 1,769 | (24,722) | - | 14,750 | \u00a0 |
In 2022, the total remuneration costs relating to the Non-Executive Directors amounted to USD 2.1 million (2021: USD 1.7 million) consisting of the elements in the table below:
2022 | Annual fixed fee | Audit committee membership | Additional fee | Nomination, governance and remuneration committee | Health safety environment committee | Total |
|---|---|---|---|---|---|---|
M. Bennett | 300,000 | - | - | 7,500 | - | 307,500 |
S. Schat | 150,000 | 20,000 | - | 20,000 | - | 190,000 |
A. Montijn-Groenewoud | 150,000 | - | - | 7,500 | 20,000 | 177,500 |
R.J. van de Kraats | 150,000 | 25,000 | - | 7,500 | - | 182,500 |
G. Heckman | 150,000 | - | - | - | 7,500 | 157,500 |
J. Guiraud | 150,000 | 20,000 | - | 7,500 | - | 177,500 |
D. Welch | 150,000 | - | 449,6981 | - | 7,500 | 607,198 |
D. Fraser | 150,000 | 20,000 | - | - | - | 170,000 |
H. van de Kerkhof | 150,000 | - | - | - | 7,500 | 157,500 |
Total | 1,500,000 | 85,000 | 449,698 | 50,000 | 42,500 | 2,127,198 |
2021 | Annual fixed fee | Audit committee membership | Additional fee | Nomination, governance and remuneration committee | Health safety environment committee | Total |
|---|---|---|---|---|---|---|
M. Bennett | 300,000 | - | - | 7,500 | - | 307,500 |
S. Schat | 150,000 | 20,000 | - | 20,000 | - | 190,000 |
A. Montijn-Groenewoud | 150,000 | - | - | 7,500 | 15,833 | 173,333 |
R.J. van de Kraats | 150,000 | 25,000 | - | 7,500 | - | 182,500 |
G. Heckman | 150,000 | - | - | - | 7,500 | 157,500 |
J. Guiraud | 150,000 | 20,000 | - | 7,500 | - | 177,500 |
D. Welch | 150,000 | - | 73,8591 | - | 7,500 | 231,359 |
D. Fraser | 150,000 | 20,000 | - | - | - | 170,000 |
H. van de Kerkhof | 150,000 | - | - | - | 7,500 | 157,500 |
Total | 1,500,000 | 85,000 | 73,859 | 50,000 | 38,333 | 1,747,192 |
On 23 January 2023, a judgement was issued in favor of OCI S.A.E. rejecting the appeal of the ETA. The ETA has appealed the decision.
On 23 December 2022, Fertiglobe announced that it has refinanced its outstanding USD 900 million bridge facility, originally due in 2024, with new 3-year (USD 300 million) and 5-year (USD 600 million) term facilities with interest rates of SOFR + 150bps and SOFR + 175bps respectively. It further announced that it has increased its revolving credit facility from USD 300 million to USD 600 million and extended the facility's maturity from December 2026 to 2027. The margin on the RCF has been reduced from 175bps to 140bps over SOFR. The execution of both refinancing took place on 4 January 2023.
On 5 January 2023, OCI N.V. announced it confirms a semi-annual cash distribution with respect to H2 2022 of EUR 3.50 per share (or c.USD 780 million at current exchange rates, consisting of a USD 200 million base return of capital and a variable element), in line with the company\u2019s guidance given during the Q3 2022 results publication. OCI N.V. is convening an extraordinary shareholders meeting (EGM) on 16 February 2023 to request for shareholder approval for the H2 2022 distribution of EUR 3.50 per share through a repayment of capital, resulting in a distribution to shareholders scheduled for April 2023.
On 16 March 2023, OCI N.V. completed a bond offering consisting of USD 600.0 million senior unsecured fixed rate notes due 2033 as part of a USD 2.0 billion global medium term program. The notes bear interest at a rate of 6.7% per annum. The notes are senior unsecured obligations of the Company and are guaranteed by IFCo. Interest will be payable semi-annually. The proceeds from the offering will be used for general corporate purposes of the Group.
The service fees recognized in the financial statements 2022 for the service of KPMG amounted to USD 5.2 million (2021: USD 5.8 million). Other assurance services provided to the Group include services related to bond offerings, voluntary audit of other financial statements, agreed upon procedures related to covenant reporting and other statutory requirements.
The amounts per service category are shown in the following table:
| \u00a0 | Total service fee | of which KPMG Accountants N.V. (The Netherlands) | ||
|---|---|---|---|---|
$ millions | 2022 | 2021 | 2022 | 2021 |
Audit of group financial statements | 4.3 | 4.6 | 2.4 | 2.6 |
Other assurance services | 0.8 | 1.1 | 0.7 | 0.3 |
Total assurance services | 5.1 | 5.7 | 3.1 | 2.9 |
Tax services | 0.1 | 0.1 | - | - |
Total | 5.2 | 5.8 | 3.1 | 2.9 |
Companies | Country | Percentage of interest | Consolidation method |
|---|---|---|---|
Fertiglobe plc | UAE | 50.00 | Full |
OCI Fuels B.V. | The Netherlands | 85.00 | Full |
OCI Methanol Marketing B.V. | The Netherlands | 85.00 | Full |
OCI Nitrogen B.V. | The Netherlands | 100.00 | Full |
BioMCN B.V. | The Netherlands | 85.00 | Full |
Iowa Fertilizer Company LLC | United States | 100.00 | Full |
OCI USA Inc. | United States | 85.00 | Full |
OCI Partners LP / OCI Beaumont LLC | United States | 85.00 | Full |
N-7 LLC | United States | 50.00 | Full |
OCI Methanol Marketing LLC | United States | 85.00 | Full |
Key subsidiaries held via Fertiglobe plc | \u00a0 | \u00a0 | \u00a0 |
Ruwais Fertilizer Industries LLC (Fertil) | UAE | 100.00 | Full |
Egypt Basic Industries Corporation S.A.E. | Egypt | 75.00 | Full |
Egyptian Fertilizers Company S.A.E. | Egypt | 99.96 | Full |
Sorfert Alg\u00e9rie Spa | Algeria | 50.99 | Full |
Orascom Construction Industries S.A.E. | Egypt | 99.96 | Full |
Fertiglobe Distribution Limited | UAE | 100.00 | Full |
OCI Fertilizer Trade and Supply B.V. | The Netherlands | 100.00 | Full |
Fertiglobe Fertilizer Trading Limited | BVI | 100.00 | Full |
A full list of affiliated companies will be available for public inspection at the Commercial Registry in conformity with the provisions of Article 2:379 and 2:414 of the Dutch Civil Code.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-421": { "value": "1 General OCI N.V. (\u2018OCI\u2019 or \u2018Company\u2019) was established on 2 January 2013 as a public limited liability company incorporated under Dutch law, with its head office located at Honthorststraat 19, Amsterdam, the Netherlands. OCI is registered in the Dutch commercial register under no. 56821166 dated 2 January 2013. The consolidated financial statements comprise the financial statements of the Company, its subsidiaries (together referred to as the \u2018Group\u2019) and the Group\u2019s interests in associates and joint ventures. The Group is primarily involved in the production and distribution of hydrogen-based and natural gas-based products.2.1 General The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). The consolidated financial statements have been prepared on the historical cost convention, except when otherwise indicated. The financial year of the Group commences on 1 January and ends on 31 December. The Company\u2019s functional currency is the Euro (\u2018EUR\u2019). The Group presentation currency is the US dollar, as the Group\u2019s major foreign operations have the US dollar as their functional currency. All values are rounded to the nearest tenth of a million (in millions of USD), except when stated otherwise. These financial statements have been authorized for issue by the Company\u2019s Board of Directors on 22 March 2023. These consolidated financial statements are subject to adoption by the Annual General Meeting of Shareholders. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-8": { "value": "OCI N.V.", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-2": { "value": "public limited liability company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-4": { "value": "Honthorststraat 19, Amsterdam, the Netherlands.", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-6": { "value": "The Group is primarily involved in the production and distribution of hydrogen-based and natural gas-based products.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-422": { "value": " 2 Basis of preparation 2.1 General The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). The consolidated financial statements have been prepared on the historical cost convention, except when otherwise indicated. The financial year of the Group commences on 1 January and ends on 31 December. The Company\u2019s functional currency is the Euro (\u2018EUR\u2019). The Group presentation currency is the US dollar, as the Group\u2019s major foreign operations have the US dollar as their functional currency. All values are rounded to the nearest tenth of a million (in millions of USD), except when stated otherwise. These financial statements have been authorized for issue by the Company\u2019s Board of Directors on 22 March 2023. These consolidated financial statements are subject to adoption by the Annual General Meeting of Shareholders. 2.2 Climate action integrated in strategic objectives OCI is committed to environmental principles integrated into our strategic objectives. These strategic objectives include a commitment to 20% green house gas intensity reduction by 2030 in comparison to 2019 and carbon neutrality by 2050 as well as 100% purchased electricity from renewable sources by 2030. For OCI\u2019s decarbonization roadmap, refer to section Decarbonization roadmap and for the latest environmental performance, refer to section Environmental performance. The impact of this climate roadmap has been considered when preparing these consolidated financial statements. For more information, refer to note 5 Critical accounting judgment, estimates and assumptions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-424": { "value": "These financial statements have been authorized for issue by the Company\u2019s Board of Directors on 22 March 2023. These consolidated financial statements are subject to adoption by the Annual General Meeting of Shareholders. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-485": { "value": "The Group has applied the accounting policies set out in note 3 consistently over both periods presented in these consolidated financial statements.
The consolidated financial statements include the financial statements of OCI, its subsidiaries and the Group\u2019s interests in associates and joint ventures.
Subsidiaries are all companies to which OCI is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. When the Group ceases to have control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture. Any resulting gain or loss is recognized in profit or loss including related cumulative translation adjustments accumulated in other comprehensive income. If it becomes an associate or joint venture, the interest retained is subsequently measured in accordance with the equity method. The principal subsidiaries are listed in note 34.
Intra-group balances and transactions, and any unrealized income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investees. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Non-controlling interests is presented as a separate component in equity. \u2018Profit or loss\u2019 and \u2018Total comprehensive income\u2019 attributable to the non-controlling interests are presented as a separate line item in the consolidated statement of profit or loss and other comprehensive income. Non-controlling interests is measured at its proportionate share of the acquiree\u2019s identifiable net assets at the balance sheet date. Changes in Group\u2019s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
Associates are those companies in which the Group exercises significant influence, but does not have control over the financial and operating policies, and are presumed to exist when the Group holds 20% to 50% of the shareholding and related voting rights of the other entity. Associates are accounted for under the equity method. The Group\u2019s share of profit or loss of an associate is recognized in profit or loss from the date when significant influence begins up to the date when that influence ceases.
Investments in associates with negative shareholder\u2019s equity are impaired and a provision for its losses is recognized only if the Group has a legal or constructive obligation to cover the losses. Equity changes in investees accounted for under the equity method that do not result from profit or loss are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group\u2019s interest in associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Unrealized gains on transactions between two associates are not eliminated.
Investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations of each investor. Those joint arrangements that are assessed as joint ventures are accounted for using the equity method. Joint operations are accounted for using line by line accounting. Joint ventures are accounted for under the equity method. Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted subsequently for the Group\u2019s share in the post-acquisition profit or losses and movements in comprehensive income.
When the Group\u2019s share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any long-term interest that, in substance, forms part of the Group\u2019s net investment in joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date, fair value of the assets and liabilities assumed and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the classification of particular financial assets and financial liabilities assumed as, at fair value through profit or loss, or at amortized cost or as a financial asset measured at fair value through other comprehensive income. The Group makes an assessment of whether embedded derivatives of the acquiree should be separated from their host contracts. If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or other comprehensive income, as appropriate.
The consideration transferred in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The Group recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree.
Changes in the fair value of consideration that are not measurement period adjustments shall be adjusted as follows:
Contingent consideration classified as equity shall not be remeasured.
Other contingent consideration shall be measured at fair value with changes recognized in profit or loss.
The financial statements of subsidiaries and joint operations are prepared in the currencies which are determined based on the primary economic environment in which they operate (\u2018the functional currency\u2019). Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the transaction dates. At each balance sheet date, monetary items denominated in foreign currencies are revalued into the entity\u2019s functional currency at the then prevailing closing-rates.
Exchange differences arising on the settlement and translation of monetary items are included in profit or loss for the period except when deferred to other comprehensive income for financial assets at fair value through other comprehensive income and the effective part of qualifying cash flow hedges.
Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than the US dollars are translated into US dollars using the exchange rates prevailing at the balance sheet date. Income and expense items are translated using exchange rates prevailing at the date of the transactions. Investments in joint ventures and associates with a functional currency other than the US dollars are translated into US dollars using exchange rates prevailing on the balance sheet date. Exchange rate differences arising during consolidation and on the translation of investments in subsidiaries, joint arrangements and associates and monetary items that form part of net investments are included in other comprehensive income, as \u2018Currency translation differences\u2019.
When a foreign operation is (partly) disposed of or sold, (the proportionate share of) the related currency translation differences that were recorded in other comprehensive income are recycled to profit or loss as part of the gain or loss on disposal or sale. Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are considered as assets and liabilities denominated in the functional currency of the foreign subsidiary.
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, at fair value through profit or loss (\u2018FVTPL\u2019) and at fair value through other comprehensive income (\u2018FVOCI\u2019).
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Trade and other receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analyzed the contractual cash flow characteristics of those instruments and concluded that they meet the \u2018hold-to-collect\u2019 business model criteria for amortized cost measurement. Interest income from these assets is included in finance income using the effective interest rate method. Any gain or loss on derecognition is recognized directly in profit or loss.
The Group sells certain trade receivables under a securitization agreement to a third party. For these selected debtors the Group will use the \u2018hold-to-collect-and-sell business model\u2019 as defined under IFRS 9 and will measure these receivables going forward at FVOCI.
Derivative financial instruments held by the Group are classified in the category FVTPL, unless the instrument is designated in a hedge relationship and the hedge meets the requirements for hedge accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
Equity investments, previously recognized as available-for-sale assets, are measured at FVOCI, based on the irrevocable election made by the Group. The Group elected this approach as these investments are not held for trading. Movements in the carrying amount are recognized in other comprehensive income, except for the recognition of impairment gains and losses, interest income and foreign exchange gains and losses which are recognized in the profit or loss. On derecognition the cumulative gain or loss recognized in other comprehensive income is not reclassified from equity to profit or loss. Dividend income is recognized in profit or loss when the Group\u2019s right to receive payment is established.
The Group has physical purchase contracts in place to procure natural gas for its production activities. These contracts are not accounted for as financial instruments if they meet the criteria for the own use exemption. The own use exemption applies to contracts that are entered into and continue to be held for the receipt of a non-financial item in accordance with the Group\u2019s expected purchase, sale or usage requirements and do not have a past practice of being net cash-settled.
When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of changes in the fair value of a derivative or foreign exchange gains and losses for a non-derivative is recognised in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognised immediately in profit or loss. The amount recognised in other comprehensive income is fully or partially reclassified to profit or loss as a reclassification adjustment on disposal or partial disposal of the foreign operation, respectively.
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.
Financial liabilities, like loans and borrowings and trade and other payables, are measured at amortized cost, unless the financial liability:
Is a derivative at FVTPL;
Arose from the transfer of a financial assets that does not qualify for derecognition or if the continuing involvement approach applies;
Is a financial guarantee contract;
Is a commitment to provide a loan at a below-market interest rate; and
Is a contingent consideration resulting from a business combination to which IFRS 3 applies, measured at FVTPL.
The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses. The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit definitions from agencies (Standard & Poor\u2019s). Exposure within each credit risk grade are segmented by geographic region classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past seven years (if possible). These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which historical data has been collected, current conditions and the Group\u2019s view of economic conditions over the expected lives of the receivables.
For the assessment of loss allowance for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected life of the financial asset, i.e., the difference between:
The contractual cash flows that are due to an entity under the contract; and
The cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and forward-looking information is assessed. Expected losses on trade receivables are recognized on a separate line item in the statement of profit and loss, if any.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition. If at the reporting date, the credit risk of other receivables has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Derivative financial assets are measured at fair value and the Group investigates whether the counterparty\u2019s creditworthiness gives rise to an impairment. When determining the fair value, credit value and debit value adjustments are taken into account.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less from the acquisition date (original maturity) that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments. Restricted cash comprises cash balances where specific restrictions exist on the Company\u2019s ability to use this cash. Restricted cash includes cash deposited as collateral for letters of credit issued by the Company. Restricted funds include bank balances reserved by the lending institution for installments of loan payments to be made in the near future.
Ordinary shares are classified as equity. Share premium is the excess amount received over the par value of the shares. Incremental costs directly attributable to the issue of new shares are recognized in equity as a deduction, net of tax, from the proceeds. When ordinary shares are repurchased, the amount of the consideration paid, which includes directly attributable costs, net of tax effects, is recognized as a deduction from \u2018Reserves\u2019. Repurchased shares are classified as treasury shares and are presented in \u2018Reserves\u2019. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in \u2018Reserves\u2019, and the resulting surplus or deficit on the transaction is presented in share premium.
Items of property, plant and equipment are measured at cost less accumulated depreciation and any impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes cost of material, direct labour, other directly attributable cost incurred to bring the asset ready to its intended use, cost of asset retirement obligations and any capitalized borrowing cost.
Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in profit or loss. Subsequent expenditures are capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance costs are expensed as incurred. Spare parts of property, plant and equipment are recognized under property, plant and equipment if the average turn-over exceeds 12 months or more, the cost exceeds USD 10 thousand and the part is key for the functioning of the plant. Other spare parts are recognized within inventories.
Expenditures incurred for purchasing and constructing property, plant and equipment are initially recorded as \u2018under construction\u2019 until the asset is completed and becomes ready for use. Upon the completion of the assets, the recognized costs are reclassified from \u2018under construction\u2019 to its final category of property, plant and equipment. Assets under construction are not depreciated and measured at cost less any impairment losses.
Items of property, plant and equipment are depreciated on a straight-line basis through profit or loss over the estimated useful lives of each component, taking into account any residual values. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary by the Group.
The estimated useful lives for items of property, plant and equipment are as follows: | Years |
|---|---|
Buildings | 10 - 50 |
Plant and equipment | 5 - 25 |
Fixtures and fittings | 3 - 10 |
Borrowing costs attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale, are recognized as part of the cost of those assets. All other borrowing costs are recognized as \u2018Finance cost\u2019 in the period in which they are incurred.
Goodwill represents the excess of purchase price and related costs over the value assigned to the Groups\u2019 share of identifiable assets acquired and liabilities assumed of businesses acquired that were directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss.
Goodwill on acquisition of entities that qualify as subsidiaries is presented under \u2018Goodwill and intangible assets\u2019. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in \u2018Equity-accounted investees\u2019. Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or group of units that are expected to benefit from the business combination through which the goodwill arose, based on past experience.
Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for the amount by which the cash-generating unit\u2019s carrying amount exceeds its recoverable amount. The recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on internally generated goodwill and other intangible assets is recognized in profit or loss as incurred.
Other intangible assets with a finite useful life (licenses, customer relations, trade names, software and other rights that are acquired separately or through business combinations) are amortized on a straightline basis in profit or loss over their estimated useful lives taking into account any residual value and impairment losses, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary.
The estimated useful lives of intangible assets are as follows: | Years |
|---|---|
Licenses and trade names | 3 - 10 |
Purchased rights and other | 4 - 10 |
Software | 1 - 5 |
Inventories are measured at the lower of cost and net realizable value. The cost of inventories of raw materials, spare parts and supplies are based on the weighted average principle or the first-in-first-out method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Non-financial assets that have an indefinite useful life, for example goodwill, are not subject to amortization but are tested annually for impairment or more frequently when indicators arise. Assets with a finite useful life are subject to depreciation or amortization and are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the assets\u2019 recoverable amount is estimated. An impairment loss is recognized for the amount by which the assets\u2019 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. The value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit by continued use.
For the purpose of assessing impairment, assets are grouped based on the lowest level for which there are separately identifiable cash flows (cash-generating units). Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro-rata basis. Non-financial assets, which are impaired, are tested periodically to determine whether the recoverable amount has increased and the impairment be (partially) reversed. Impairment losses on goodwill are not reversed.
For other assets, an impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversal of impairments is only permitted if in a subsequent period after an impairment loss has been recognized, the amount of the impairment loss decreases and the decrease can be related objectively to an event after the impairment loss was recognized.
Provisions are recognized when a present legal or constructive obligation based on past events exists, and it is probable that an outflow of economic benefits is required to settle the obligation. If the outflow is probable, but cannot be determined reliably, the obligation is disclosed. The non-current part of provisions is determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
The Group recognizes a provision if the Group has an obligation to restore a leased asset in its original condition at the end of its lease term and in case of legal requirements with respect to cleanup of contamination of land, and a reliable estimate can be made. Based on the land lease of their production facilities, some entities have the obligation to restore their site upon decommissioning.
The Group has not recorded a liability for this conditional asset retirement obligation, as it does not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of the operations, which is necessary to estimate the fair value of this liability.
The Group is subject to legal and regulatory proceedings in various jurisdictions. Such proceedings may result in criminal or civil sanctions, penalties or disgorgements against the Company. If it is probable that an obligation to the Group exists, which will result in an outflow of resources and the amount of the outflow can be reliably estimated, a provision is recognized.
The donation provision is recognized as a constructive obligation, the amount is undiscounted as the Group expects settlement within 12 months, as such the provision is classified as current.
Onerous contracts are contracts for which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract, which is determined based on both the incremental costs necessary to fulfil the obligation under the contract and an allocation of other costs that relate directly to fulfilling that contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.
Revenues are recognized to depict the transfer of goods or services to customers in the ordinary course of the Group\u2019s activities, in the amounts that reflect the considerations to which the Group expects to be entitled in exchange for those goods or services. Revenue is recognized when the Group satisfies the performance obligations by transferring promised goods or services to customers. The main performance obligation of the Group is the transfer of the Group\u2019s fertilizer and chemical products to customers. Revenue from the sale of fertilizer and chemical products are the two main revenue streams of the Group.
Goods are transferred when the customer obtains control of the asset. The timing of when control transfers depends on the sales and shipping terms agreed. Depending on its nature and the agreed sales terms, a performance obligation is either satisfied at certain point in time or over a certain period of time.
Revenue is recognized net of expected discounts and rebates to customers. Accumulated experience and management judgement is used to estimate and provide for the discounts and rebates and revenue is only recognized to the extent that it is highly probably that a significant reversal will not occur. The Group does not have any contracts where the period of time between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, no adjustment is made to transaction prices for the time value of money.
Government grants that compensate the Group for expenses incurred are recognized in profit or loss as \u2018Other income\u2019 on a systematic basis in the periods in which the expenses are recognized. When the grant relates to an asset, it is recognized at the nominal amount of the grant and subsequently recognized as income in equal amounts over the expected useful life of the related asset, if applicable.
Other government grants are recognized initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant, and are then recognized in profit or loss as \u2018Other income\u2019 on a systematic basis over the useful life of the asset.
The Group receives European Emission Allowances (\u201cEUAs\u201d) as a result of its industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority. The amount of EUAs granted is based on an estimate of CO2 emissions in the Netherlands and the effective European emission legislation. In arrears, the Group must refund allowances to the Dutch Emission Authority based on actual CO2 emissions during the year. In December 2022, the European Parliament (\u201cEP\u201d) and the Council reached a provisional agreement on the reform of the EU Emissions Trading System (\u201cETS\u201d) as a result of which the free allocation of allowances within the EU ETS will be phased out gradually.
The grant of these allowances is within the scope of IAS 20 Government Grants. EUAs are accounted for slightly different than the above accounting policy. Upon initial recognition, the EUA\u2019s are recognized as inventory at the nominal amount of the grant (nil). Concurrently, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. When no excess or deficit is identified, no liability is recognized as the Group has sufficient EUAs to settle the liability.
The excess or deficit is calculated and recorded separately for each production facility. If a deficit in EUAs is identified, the Group has to purchase additional EUAs on the commodity markets to settle its liability to the Dutch Emission Authority. Purchased EUAs are recognized at cost and classified as inventory. The cost of the purchased EUAs to settle the liability for emission allowances during any given compliance period are recognized in cost of sales.
EUAs in excess of the liability to the Dutch Emission Authority that are controlled by OCI can be sold for the benefit of the Group. Sales of EUAs in excess of the liability for emission allowances during any given compliance period are recognized in cost of sales.
Whether an arrangement is, or contains a lease is assessed at the commencement date of the lease. In general, an arrangement is considered to be or to contain a lease when all of the following apply:
There is an identified asset;
OCI obtains substantially all economic benefits from the use of the asset; and
OCI can direct the use of the identified asset.
Lease obligations are recognized based on the present value of the future minimum lease payments.
Right-of-use assets are valued equal to the lease liabilities. As leases do not easily provide for an implicit rate, OCI uses the incremental borrowing rate. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
For leases, each lease payment is allocated between the liability and finance cost. The finance cost is charged to the consolidated statement of profit or loss over the term of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-line basis.
OCI has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. For assets in the class leases of offices and buildings, we account for the lease and non-lease components separately. For these types of leases the allocation of the consideration between lease and non-lease components is based on the relative stand-alone prices of lease components included in the lease arrangements. Leases are presented as \u2018Right-of-use assets\u2019 and \u2018Lease obligations\u2019. Short term leases (less than 12 months) or low value leases (less than USD 5,000) are expensed through the statement of profit or loss as incurred.
Finance income comprises:
Interest income on funds invested (including on financial assets at fair value through other comprehensive income);
Gains on the disposal of financial assets at fair value through other comprehensive income;
Dividend income (excluding dividend from equity-accounted investees and subsidiaries);
Fair value gains on financial assets at fair value through profit or loss; and
Gains on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income.
Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group\u2019s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.
Finance cost comprises:
Interest expense on borrowings;
Unwinding of the discount on provisions and contingent consideration;
Interest expense related to lease obligations;
Losses on disposal of financial assets at fair value through other comprehensive income;
Fair value losses on financial assets at fair value through profit or loss;
Loss on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income; and
Impairment losses recognized on financial assets (other than trade receivables).
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss and expensed as incurred. Foreign currency gains and losses are recognized on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.
Certain Group subsidiaries provide pension plans, end of service remuneration plans and long-term service benefits. These pension plans qualify as defined contribution plans. Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
The Group long-term employee benefits are recognized if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably to determine its present value. The discount rate is the yield at the balance sheet date on triple-A (\u2018AAA\u2019) credit rated bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Re-measurements are recognized in profit or loss in the period in which they arise.
Employee termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. OCI recognizes termination benefits when OCI is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or when OCI is providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
Certain employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments.
The grant date fair value of equity-settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period (the vesting period) that the employees render service and becomes unconditionally entitled to the awards.
The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. At each reporting date, the progress of non-market conditions is measured and the expenses are recorded accordingly with true-ups recorded.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Current tax also includes any tax arising from the declaration of dividends. Current income tax receivable and payable are offset when there is a legally enforceable right to offset and when the current income tax relates to the same fiscal authority.
Deferred tax liabilities are recognized for all taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements (\u2018balance sheet\u2019 method). Deferred tax assets are recognized for all deductible temporary differences, unused carry forward losses and unused carry forward tax credits, to the extent that it is probable that future taxable profit will be available against which the deferred income tax assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.
Deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss. Also, no deferred income tax is recognized regarding the initial recognition of goodwill and regarding investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Deferred income tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority.
In cases where it is concluded it is not probable that tax authorities will accept a tax treatment, the effect of the uncertainty is reflected in the recognition and measurement of tax assets and liabilities or, alternatively, a provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the company to change its judgment regarding the adequacy of existing tax assets and liabilities. Such changes to tax assets and liabilities will impact the income tax expense in the period during which such a determination is made.
An operating segment is a component of an entity that engages in business activities for which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity\u2019s Chief Operating Decision Maker (\u2018CODM\u2019) to make decisions about resource allocation to the segment and to assess its performance and for which discrete financial information is available. The Group determines and presents operating segments on the basis of information that internally is provided to the CODM during the period. Operating segments are grouped into reporting segments based on similar economic environments and similar products.
The consolidated statement of cash flows has been prepared using the \u2018indirect\u2019 method. Cash flows in foreign currencies have been translated applying average exchange rates. Currency translation differences on cash are shown separately in the consolidated statement of cash flows. Cash flows from investing activities consist mostly of investments and divestments in property, plant and equipment, intangible assets, and acquisitions insofar as these are paid for in cash. Acquisitions or disposals of subsidiaries are presented as acquisition of subsidiary, net of cash. Cash flows relating to capitalized borrowing cost are presented as cash flows from operating activities. Cash flows from financing activities consist of aquisition or divestment of non-controlling interests and settlement of derivatives, with the exception of interest rate derivatives which are presented as cash flows used in operating activities. Cash flows from discontinued operations / assets held for demerger are presented separately from the cash flows from continuing operations.
The presentation of withholding tax paid on subsidiary dividends changed from cash flows used in financing activities to cash flows used in operating activities in 2022. Withholding tax paid on subsidiary dividends in 2021 amounts to USD 10.6 million and is presented in dividends paid to non-controlling interests.
Earnings per ordinary share are calculated by dividing the profit or loss (net) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. In making this calculation the (ordinary) treasury shares are deducted from the number of ordinary shares outstanding. The calculation of the diluted earnings per share is based on the weighted average number of ordinary shares outstanding plus the potential increase as a result of the conversion of convertible bonds and the settlement of share-based compensation plans (share option plans). Anti-dilutive effects are not included in the calculation. An adjustment is made to profit or loss (net) to eliminate interest charges, whilst allowing for effect of taxation. Regarding equity-settled share option plans it is assumed that all outstanding plans will vest. The potential increase arising from share option plans is based on a calculation of the value of the options outstanding. This is the number of options multiplied by the exercise price, divided by the average share price during the financial year. This potential increase is only applied if the option has intrinsic value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-425": { "value": " 3.1 Consolidation The consolidated financial statements include the financial statements of OCI, its subsidiaries and the Group\u2019s interests in associates and joint ventures. Subsidiaries Subsidiaries are all companies to which OCI is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. When the Group ceases to have control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture. Any resulting gain or loss is recognized in profit or loss including related cumulative translation adjustments accumulated in other comprehensive income. If it becomes an associate or joint venture, the interest retained is subsequently measured in accordance with the equity method. The principal subsidiaries are listed in note 34. Transactions eliminated in the consolidated financial statements Intra-group balances and transactions, and any unrealized income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investees. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. Non-controlling interests Non-controlling interests is presented as a separate component in equity. \u2018Profit or loss\u2019 and \u2018Total comprehensive income\u2019 attributable to the non-controlling interests are presented as a separate line item in the consolidated statement of profit or loss and other comprehensive income. Non-controlling interests is measured at its proportionate share of the acquiree\u2019s identifiable net assets at the balance sheet date. Changes in Group\u2019s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-486": { "value": " Subsidiaries Subsidiaries are all companies to which OCI is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. When the Group ceases to have control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any investment retained in the former subsidiary is recognized at fair value. The fair value shall be regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture. Any resulting gain or loss is recognized in profit or loss including related cumulative translation adjustments accumulated in other comprehensive income. If it becomes an associate or joint venture, the interest retained is subsequently measured in accordance with the equity method. The principal subsidiaries are listed in note 34. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-487": { "value": " Non-controlling interests Non-controlling interests is presented as a separate component in equity. \u2018Profit or loss\u2019 and \u2018Total comprehensive income\u2019 attributable to the non-controlling interests are presented as a separate line item in the consolidated statement of profit or loss and other comprehensive income. Non-controlling interests is measured at its proportionate share of the acquiree\u2019s identifiable net assets at the balance sheet date. Changes in Group\u2019s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-488": { "value": " 3.2 Equity-accounted investees Associates Associates are those companies in which the Group exercises significant influence, but does not have control over the financial and operating policies, and are presumed to exist when the Group holds 20% to 50% of the shareholding and related voting rights of the other entity. Associates are accounted for under the equity method. The Group\u2019s share of profit or loss of an associate is recognized in profit or loss from the date when significant influence begins up to the date when that influence ceases. Investments in associates with negative shareholder\u2019s equity are impaired and a provision for its losses is recognized only if the Group has a legal or constructive obligation to cover the losses. Equity changes in investees accounted for under the equity method that do not result from profit or loss are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group\u2019s interest in associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Unrealized gains on transactions between two associates are not eliminated. Joint ventures Investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations of each investor. Those joint arrangements that are assessed as joint ventures are accounted for using the equity method. Joint operations are accounted for using line by line accounting. Joint ventures are accounted for under the equity method. Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted subsequently for the Group\u2019s share in the post-acquisition profit or losses and movements in comprehensive income. When the Group\u2019s share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any long-term interest that, in substance, forms part of the Group\u2019s net investment in joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-489": { "value": "Associates Associates are those companies in which the Group exercises significant influence, but does not have control over the financial and operating policies, and are presumed to exist when the Group holds 20% to 50% of the shareholding and related voting rights of the other entity. Associates are accounted for under the equity method. The Group\u2019s share of profit or loss of an associate is recognized in profit or loss from the date when significant influence begins up to the date when that influence ceases. Investments in associates with negative shareholder\u2019s equity are impaired and a provision for its losses is recognized only if the Group has a legal or constructive obligation to cover the losses. Equity changes in investees accounted for under the equity method that do not result from profit or loss are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group\u2019s interest in associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Unrealized gains on transactions between two associates are not eliminated. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-490": { "value": " Joint ventures Investments in joint arrangements are classified as either joint ventures or joint operations depending on the contractual rights and obligations of each investor. Those joint arrangements that are assessed as joint ventures are accounted for using the equity method. Joint operations are accounted for using line by line accounting. Joint ventures are accounted for under the equity method. Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted subsequently for the Group\u2019s share in the post-acquisition profit or losses and movements in comprehensive income. When the Group\u2019s share of losses in a joint venture equals or exceeds its interest in the joint venture (which includes any long-term interest that, in substance, forms part of the Group\u2019s net investment in joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-491": { "value": " 3.3 Business combinations Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date, fair value of the assets and liabilities assumed and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative expenses. When the Group acquires a business, it assesses the classification of particular financial assets and financial liabilities assumed as, at fair value through profit or loss, or at amortized cost or as a financial asset measured at fair value through other comprehensive income. The Group makes an assessment of whether embedded derivatives of the acquiree should be separated from their host contracts. If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or other comprehensive income, as appropriate. The consideration transferred in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The Group recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree. Changes in the fair value of consideration that are not measurement period adjustments shall be adjusted as follows: Contingent consideration classified as equity shall not be remeasured. Other contingent consideration shall be measured at fair value with changes recognized in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-492": { "value": " 3.3 Business combinations Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date, fair value of the assets and liabilities assumed and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree\u2019s identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative expenses. When the Group acquires a business, it assesses the classification of particular financial assets and financial liabilities assumed as, at fair value through profit or loss, or at amortized cost or as a financial asset measured at fair value through other comprehensive income. The Group makes an assessment of whether embedded derivatives of the acquiree should be separated from their host contracts. If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognized in profit or loss or other comprehensive income, as appropriate. The consideration transferred in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The Group recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree. Changes in the fair value of consideration that are not measurement period adjustments shall be adjusted as follows: Contingent consideration classified as equity shall not be remeasured. Other contingent consideration shall be measured at fair value with changes recognized in profit or loss. Goodwill Goodwill represents the excess of purchase price and related costs over the value assigned to the Groups\u2019 share of identifiable assets acquired and liabilities assumed of businesses acquired that were directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss. Goodwill on acquisition of entities that qualify as subsidiaries is presented under \u2018Goodwill and intangible assets\u2019. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in \u2018Equity-accounted investees\u2019. Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or group of units that are expected to benefit from the business combination through which the goodwill arose, based on past experience. Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for the amount by which the cash-generating unit\u2019s carrying amount exceeds its recoverable amount. The recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on internally generated goodwill and other intangible assets is recognized in profit or loss as incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-493": { "value": " 3.4 Foreign currency Foreign currency transactions The financial statements of subsidiaries and joint operations are prepared in the currencies which are determined based on the primary economic environment in which they operate (\u2018the functional currency\u2019). Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the transaction dates. At each balance sheet date, monetary items denominated in foreign currencies are revalued into the entity\u2019s functional currency at the then prevailing closing-rates. Exchange differences arising on the settlement and translation of monetary items are included in profit or loss for the period except when deferred to other comprehensive income for financial assets at fair value through other comprehensive income and the effective part of qualifying cash flow hedges. Foreign currency translation Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than the US dollars are translated into US dollars using the exchange rates prevailing at the balance sheet date. Income and expense items are translated using exchange rates prevailing at the date of the transactions. Investments in joint ventures and associates with a functional currency other than the US dollars are translated into US dollars using exchange rates prevailing on the balance sheet date. Exchange rate differences arising during consolidation and on the translation of investments in subsidiaries, joint arrangements and associates and monetary items that form part of net investments are included in other comprehensive income, as \u2018Currency translation differences\u2019. When a foreign operation is (partly) disposed of or sold, (the proportionate share of) the related currency translation differences that were recorded in other comprehensive income are recycled to profit or loss as part of the gain or loss on disposal or sale. Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are considered as assets and liabilities denominated in the functional currency of the foreign subsidiary. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-494": { "value": " Foreign currency translation Upon consolidation, the assets and liabilities of subsidiaries with a functional currency other than the US dollars are translated into US dollars using the exchange rates prevailing at the balance sheet date. Income and expense items are translated using exchange rates prevailing at the date of the transactions. Investments in joint ventures and associates with a functional currency other than the US dollars are translated into US dollars using exchange rates prevailing on the balance sheet date. Exchange rate differences arising during consolidation and on the translation of investments in subsidiaries, joint arrangements and associates and monetary items that form part of net investments are included in other comprehensive income, as \u2018Currency translation differences\u2019. When a foreign operation is (partly) disposed of or sold, (the proportionate share of) the related currency translation differences that were recorded in other comprehensive income are recycled to profit or loss as part of the gain or loss on disposal or sale. Goodwill and fair value adjustments arising on the acquisition of a foreign subsidiary are considered as assets and liabilities denominated in the functional currency of the foreign subsidiary. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-495": { "value": "IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, at fair value through profit or loss (\u2018FVTPL\u2019) and at fair value through other comprehensive income (\u2018FVOCI\u2019).
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
Trade and other receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analyzed the contractual cash flow characteristics of those instruments and concluded that they meet the \u2018hold-to-collect\u2019 business model criteria for amortized cost measurement. Interest income from these assets is included in finance income using the effective interest rate method. Any gain or loss on derecognition is recognized directly in profit or loss.
The Group sells certain trade receivables under a securitization agreement to a third party. For these selected debtors the Group will use the \u2018hold-to-collect-and-sell business model\u2019 as defined under IFRS 9 and will measure these receivables going forward at FVOCI.
Derivative financial instruments held by the Group are classified in the category FVTPL, unless the instrument is designated in a hedge relationship and the hedge meets the requirements for hedge accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
Equity investments, previously recognized as available-for-sale assets, are measured at FVOCI, based on the irrevocable election made by the Group. The Group elected this approach as these investments are not held for trading. Movements in the carrying amount are recognized in other comprehensive income, except for the recognition of impairment gains and losses, interest income and foreign exchange gains and losses which are recognized in the profit or loss. On derecognition the cumulative gain or loss recognized in other comprehensive income is not reclassified from equity to profit or loss. Dividend income is recognized in profit or loss when the Group\u2019s right to receive payment is established.
The Group has physical purchase contracts in place to procure natural gas for its production activities. These contracts are not accounted for as financial instruments if they meet the criteria for the own use exemption. The own use exemption applies to contracts that are entered into and continue to be held for the receipt of a non-financial item in accordance with the Group\u2019s expected purchase, sale or usage requirements and do not have a past practice of being net cash-settled.
When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of changes in the fair value of a derivative or foreign exchange gains and losses for a non-derivative is recognised in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognised immediately in profit or loss. The amount recognised in other comprehensive income is fully or partially reclassified to profit or loss as a reclassification adjustment on disposal or partial disposal of the foreign operation, respectively.
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.
Financial liabilities, like loans and borrowings and trade and other payables, are measured at amortized cost, unless the financial liability:
Is a derivative at FVTPL;
Arose from the transfer of a financial assets that does not qualify for derecognition or if the continuing involvement approach applies;
Is a financial guarantee contract;
Is a commitment to provide a loan at a below-market interest rate; and
Is a contingent consideration resulting from a business combination to which IFRS 3 applies, measured at FVTPL.
The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses. The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit definitions from agencies (Standard & Poor\u2019s). Exposure within each credit risk grade are segmented by geographic region classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past seven years (if possible). These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which historical data has been collected, current conditions and the Group\u2019s view of economic conditions over the expected lives of the receivables.
For the assessment of loss allowance for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected life of the financial asset, i.e., the difference between:
The contractual cash flows that are due to an entity under the contract; and
The cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and forward-looking information is assessed. Expected losses on trade receivables are recognized on a separate line item in the statement of profit and loss, if any.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition. If at the reporting date, the credit risk of other receivables has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Derivative financial assets are measured at fair value and the Group investigates whether the counterparty\u2019s creditworthiness gives rise to an impairment. When determining the fair value, credit value and debit value adjustments are taken into account.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-496": { "value": "Financial assets IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, at fair value through profit or loss (\u2018FVTPL\u2019) and at fair value through other comprehensive income (\u2018FVOCI\u2019). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Amortized cost Trade and other receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analyzed the contractual cash flow characteristics of those instruments and concluded that they meet the \u2018hold-to-collect\u2019 business model criteria for amortized cost measurement. Interest income from these assets is included in finance income using the effective interest rate method. Any gain or loss on derecognition is recognized directly in profit or loss. The Group sells certain trade receivables under a securitization agreement to a third party. For these selected debtors the Group will use the \u2018hold-to-collect-and-sell business model\u2019 as defined under IFRS 9 and will measure these receivables going forward at FVOCI. Fair value through profit or loss (\u2018FVTPL\u2019) Derivative financial instruments held by the Group are classified in the category FVTPL, unless the instrument is designated in a hedge relationship and the hedge meets the requirements for hedge accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. Fair value through other comprehensive income (\u2018FVOCI\u2019) Equity investments, previously recognized as available-for-sale assets, are measured at FVOCI, based on the irrevocable election made by the Group. The Group elected this approach as these investments are not held for trading. Movements in the carrying amount are recognized in other comprehensive income, except for the recognition of impairment gains and losses, interest income and foreign exchange gains and losses which are recognized in the profit or loss. On derecognition the cumulative gain or loss recognized in other comprehensive income is not reclassified from equity to profit or loss. Dividend income is recognized in profit or loss when the Group\u2019s right to receive payment is established. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-497": { "value": "Derivative financial instruments held by the Group are classified in the category FVTPL, unless the instrument is designated in a hedge relationship and the hedge meets the requirements for hedge accounting. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-498": { "value": " Net investment hedging When a derivative instrument or a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign operation, the effective portion of changes in the fair value of a derivative or foreign exchange gains and losses for a non-derivative is recognised in other comprehensive income and presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of the derivative or foreign exchange gains and losses on the non-derivative is recognised immediately in profit or loss. The amount recognised in other comprehensive income is fully or partially reclassified to profit or loss as a reclassification adjustment on disposal or partial disposal of the foreign operation, respectively. Cash flow hedge accounting When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-500": { "value": " Financial liabilities Financial liabilities, like loans and borrowings and trade and other payables, are measured at amortized cost, unless the financial liability: Is a derivative at FVTPL; Arose from the transfer of a financial assets that does not qualify for derecognition or if the continuing involvement approach applies; Is a financial guarantee contract; Is a commitment to provide a loan at a below-market interest rate; and Is a contingent consideration resulting from a business combination to which IFRS 3 applies, measured at FVTPL. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-501": { "value": "The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses. The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit definitions from agencies (Standard & Poor\u2019s). Exposure within each credit risk grade are segmented by geographic region classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past seven years (if possible). These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which historical data has been collected, current conditions and the Group\u2019s view of economic conditions over the expected lives of the receivables.
For the assessment of loss allowance for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected life of the financial asset, i.e., the difference between:
The contractual cash flows that are due to an entity under the contract; and
The cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and forward-looking information is assessed. Expected losses on trade receivables are recognized on a separate line item in the statement of profit and loss, if any.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition. If at the reporting date, the credit risk of other receivables has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Derivative financial assets are measured at fair value and the Group investigates whether the counterparty\u2019s creditworthiness gives rise to an impairment. When determining the fair value, credit value and debit value adjustments are taken into account.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-502": { "value": "The impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses. The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit definitions from agencies (Standard & Poor\u2019s). Exposure within each credit risk grade are segmented by geographic region classification and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience over the past seven years (if possible). These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which historical data has been collected, current conditions and the Group\u2019s view of economic conditions over the expected lives of the receivables.
For the assessment of loss allowance for expected credit losses, a simplified model for trade receivables is applied. The loss allowance is measured at initial recognition and throughout the life of the receivable at an amount equal to lifetime ECL. They are estimated based on the present value of all cash shortfalls over the remaining expected life of the financial asset, i.e., the difference between:
The contractual cash flows that are due to an entity under the contract; and
The cash flows that the holder expects to receive.
In order to assess the lifetime ECLs for trade receivables, both historic credit losses experience and forward-looking information is assessed. Expected losses on trade receivables are recognized on a separate line item in the statement of profit and loss, if any.
For other receivables (and other financial assets) the Group measures the loss allowance at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition. If at the reporting date, the credit risk of other receivables has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Derivative financial assets are measured at fair value and the Group investigates whether the counterparty\u2019s creditworthiness gives rise to an impairment. When determining the fair value, credit value and debit value adjustments are taken into account.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-507": { "value": " 3.6 Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less from the acquisition date (original maturity) that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments. Restricted cash comprises cash balances where specific restrictions exist on the Company\u2019s ability to use this cash. Restricted cash includes cash deposited as collateral for letters of credit issued by the Company. Restricted funds include bank balances reserved by the lending institution for installments of loan payments to be made in the near future. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-508": { "value": " 3.6 Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less from the acquisition date (original maturity) that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments. Restricted cash comprises cash balances where specific restrictions exist on the Company\u2019s ability to use this cash. Restricted cash includes cash deposited as collateral for letters of credit issued by the Company. Restricted funds include bank balances reserved by the lending institution for installments of loan payments to be made in the near future. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-509": { "value": " 3.8 Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and any impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes cost of material, direct labour, other directly attributable cost incurred to bring the asset ready to its intended use, cost of asset retirement obligations and any capitalized borrowing cost. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in profit or loss. Subsequent expenditures are capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance costs are expensed as incurred. Spare parts of property, plant and equipment are recognized under property, plant and equipment if the average turn-over exceeds 12 months or more, the cost exceeds USD 10 thousand and the part is key for the functioning of the plant. Other spare parts are recognized within inventories. Property, plant and equipment under construction Expenditures incurred for purchasing and constructing property, plant and equipment are initially recorded as \u2018under construction\u2019 until the asset is completed and becomes ready for use. Upon the completion of the assets, the recognized costs are reclassified from \u2018under construction\u2019 to its final category of property, plant and equipment. Assets under construction are not depreciated and measured at cost less any impairment losses. Depreciation Items of property, plant and equipment are depreciated on a straight-line basis through profit or loss over the estimated useful lives of each component, taking into account any residual values. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary by the Group. The estimated useful lives for items of property, plant and equipment are as follows: Years Buildings 10 - 50 Plant and equipment 5 - 25 Fixtures and fittings 3 - 10 Borrowing costs Borrowing costs attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale, are recognized as part of the cost of those assets. All other borrowing costs are recognized as \u2018Finance cost\u2019 in the period in which they are incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-510": { "value": " Depreciation Items of property, plant and equipment are depreciated on a straight-line basis through profit or loss over the estimated useful lives of each component, taking into account any residual values. Land is not depreciated. Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary by the Group. The estimated useful lives for items of property, plant and equipment are as follows: Years Buildings 10 - 50 Plant and equipment 5 - 25 Fixtures and fittings 3 - 10 ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-511": { "value": " Borrowing costs Borrowing costs attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale, are recognized as part of the cost of those assets. All other borrowing costs are recognized as \u2018Finance cost\u2019 in the period in which they are incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-512": { "value": " 3.9 Goodwill and other intangible assets Goodwill Goodwill represents the excess of purchase price and related costs over the value assigned to the Groups\u2019 share of identifiable assets acquired and liabilities assumed of businesses acquired that were directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss. Goodwill on acquisition of entities that qualify as subsidiaries is presented under \u2018Goodwill and intangible assets\u2019. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in \u2018Equity-accounted investees\u2019. Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or group of units that are expected to benefit from the business combination through which the goodwill arose, based on past experience. Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for the amount by which the cash-generating unit\u2019s carrying amount exceeds its recoverable amount. The recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on internally generated goodwill and other intangible assets is recognized in profit or loss as incurred. Other intangible assets Other intangible assets with a finite useful life (licenses, customer relations, trade names, software and other rights that are acquired separately or through business combinations) are amortized on a straightline basis in profit or loss over their estimated useful lives taking into account any residual value and impairment losses, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary. The estimated useful lives of intangible assets are as follows: Years Licenses and trade names 3 - 10 Purchased rights and other 4 - 10 Software 1 - 5 ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-513": { "value": "Goodwill Goodwill represents the excess of purchase price and related costs over the value assigned to the Groups\u2019 share of identifiable assets acquired and liabilities assumed of businesses acquired that were directly attributable to the legal entities comprising the Group. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss. Goodwill on acquisition of entities that qualify as subsidiaries is presented under \u2018Goodwill and intangible assets\u2019. Goodwill on acquisitions of entities that qualify as associates or joint ventures is included in \u2018Equity-accounted investees\u2019. Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or group of units that are expected to benefit from the business combination through which the goodwill arose, based on past experience. Goodwill is initially measured at cost. After initial recognition, goodwill is measured at cost less any impairment losses. Goodwill is tested annually for impairment; an impairment loss is recognized for the amount by which the cash-generating unit\u2019s carrying amount exceeds its recoverable amount. The recoverable amount of the cash-generating unit is determined by the higher of its fair value less cost to sell and its value in use. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. All other expenditures on internally generated goodwill and other intangible assets is recognized in profit or loss as incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-515": { "value": " Other intangible assets Other intangible assets with a finite useful life (licenses, customer relations, trade names, software and other rights that are acquired separately or through business combinations) are amortized on a straightline basis in profit or loss over their estimated useful lives taking into account any residual value and impairment losses, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if necessary. The estimated useful lives of intangible assets are as follows: Years Licenses and trade names 3 - 10 Purchased rights and other 4 - 10 Software 1 - 5 ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-516": { "value": " 3.10 Inventories Inventories are measured at the lower of cost and net realizable value. The cost of inventories of raw materials, spare parts and supplies are based on the weighted average principle or the first-in-first-out method, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-517": { "value": " 3.11 Impairment of non-financial assets Non-financial assets that have an indefinite useful life, for example goodwill, are not subject to amortization but are tested annually for impairment or more frequently when indicators arise. Assets with a finite useful life are subject to depreciation or amortization and are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the assets\u2019 recoverable amount is estimated. An impairment loss is recognized for the amount by which the assets\u2019 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset\u2019s fair value less costs of disposal and its value in use. The value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit by continued use. For the purpose of assessing impairment, assets are grouped based on the lowest level for which there are separately identifiable cash flows (cash-generating units). Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro-rata basis. Non-financial assets, which are impaired, are tested periodically to determine whether the recoverable amount has increased and the impairment be (partially) reversed. Impairment losses on goodwill are not reversed. For other assets, an impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversal of impairments is only permitted if in a subsequent period after an impairment loss has been recognized, the amount of the impairment loss decreases and the decrease can be related objectively to an event after the impairment loss was recognized. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-518": { "value": " 3.12 Provisions Provisions are recognized when a present legal or constructive obligation based on past events exists, and it is probable that an outflow of economic benefits is required to settle the obligation. If the outflow is probable, but cannot be determined reliably, the obligation is disclosed. The non-current part of provisions is determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. Asset retirement obligations The Group recognizes a provision if the Group has an obligation to restore a leased asset in its original condition at the end of its lease term and in case of legal requirements with respect to cleanup of contamination of land, and a reliable estimate can be made. Based on the land lease of their production facilities, some entities have the obligation to restore their site upon decommissioning. The Group has not recorded a liability for this conditional asset retirement obligation, as it does not believe there is currently a reasonable basis for estimating a date or range of dates of cessation of the operations, which is necessary to estimate the fair value of this liability. Claims and contingencies The Group is subject to legal and regulatory proceedings in various jurisdictions. Such proceedings may result in criminal or civil sanctions, penalties or disgorgements against the Company. If it is probable that an obligation to the Group exists, which will result in an outflow of resources and the amount of the outflow can be reliably estimated, a provision is recognized. Donation provision The donation provision is recognized as a constructive obligation, the amount is undiscounted as the Group expects settlement within 12 months, as such the provision is classified as current. Onerous contracts Onerous contracts are contracts for which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract, which is determined based on both the incremental costs necessary to fulfil the obligation under the contract and an allocation of other costs that relate directly to fulfilling that contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-519": { "value": " 3.13 Revenue from contracts with customers Revenues are recognized to depict the transfer of goods or services to customers in the ordinary course of the Group\u2019s activities, in the amounts that reflect the considerations to which the Group expects to be entitled in exchange for those goods or services. Revenue is recognized when the Group satisfies the performance obligations by transferring promised goods or services to customers. The main performance obligation of the Group is the transfer of the Group\u2019s fertilizer and chemical products to customers. Revenue from the sale of fertilizer and chemical products are the two main revenue streams of the Group. Goods are transferred when the customer obtains control of the asset. The timing of when control transfers depends on the sales and shipping terms agreed. Depending on its nature and the agreed sales terms, a performance obligation is either satisfied at certain point in time or over a certain period of time. Revenue is recognized net of expected discounts and rebates to customers. Accumulated experience and management judgement is used to estimate and provide for the discounts and rebates and revenue is only recognized to the extent that it is highly probably that a significant reversal will not occur. The Group does not have any contracts where the period of time between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. Consequently, no adjustment is made to transaction prices for the time value of money. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-520": { "value": " 3.14 Government grants Government grants that compensate the Group for expenses incurred are recognized in profit or loss as \u2018Other income\u2019 on a systematic basis in the periods in which the expenses are recognized. When the grant relates to an asset, it is recognized at the nominal amount of the grant and subsequently recognized as income in equal amounts over the expected useful life of the related asset, if applicable. Other government grants are recognized initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant, and are then recognized in profit or loss as \u2018Other income\u2019 on a systematic basis over the useful life of the asset. European Emission Allowances The Group receives European Emission Allowances (\u201cEUAs\u201d) as a result of its industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority. The amount of EUAs granted is based on an estimate of CO2 emissions in the Netherlands and the effective European emission legislation. In arrears, the Group must refund allowances to the Dutch Emission Authority based on actual CO2 emissions during the year. In December 2022, the European Parliament (\u201cEP\u201d) and the Council reached a provisional agreement on the reform of the EU Emissions Trading System (\u201cETS\u201d) as a result of which the free allocation of allowances within the EU ETS will be phased out gradually. The grant of these allowances is within the scope of IAS 20 Government Grants. EUAs are accounted for slightly different than the above accounting policy. Upon initial recognition, the EUA\u2019s are recognized as inventory at the nominal amount of the grant (nil). Concurrently, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. When no excess or deficit is identified, no liability is recognized as the Group has sufficient EUAs to settle the liability. The excess or deficit is calculated and recorded separately for each production facility. If a deficit in EUAs is identified, the Group has to purchase additional EUAs on the commodity markets to settle its liability to the Dutch Emission Authority. Purchased EUAs are recognized at cost and classified as inventory. The cost of the purchased EUAs to settle the liability for emission allowances during any given compliance period are recognized in cost of sales. EUAs in excess of the liability to the Dutch Emission Authority that are controlled by OCI can be sold for the benefit of the Group. Sales of EUAs in excess of the liability for emission allowances during any given compliance period are recognized in cost of sales. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-5": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-521": { "value": " 3.15 Lease accounting Whether an arrangement is, or contains a lease is assessed at the commencement date of the lease. In general, an arrangement is considered to be or to contain a lease when all of the following apply: There is an identified asset; OCI obtains substantially all economic benefits from the use of the asset; and OCI can direct the use of the identified asset. Lease obligations are recognized based on the present value of the future minimum lease payments. Right-of-use assets are valued equal to the lease liabilities. As leases do not easily provide for an implicit rate, OCI uses the incremental borrowing rate. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For leases, each lease payment is allocated between the liability and finance cost. The finance cost is charged to the consolidated statement of profit or loss over the term of the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-line basis. OCI has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. For assets in the class leases of offices and buildings, we account for the lease and non-lease components separately. For these types of leases the allocation of the consideration between lease and non-lease components is based on the relative stand-alone prices of lease components included in the lease arrangements. Leases are presented as \u2018Right-of-use assets\u2019 and \u2018Lease obligations\u2019. Short term leases (less than 12 months) or low value leases (less than USD 5,000) are expensed through the statement of profit or loss as incurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-522": { "value": " 3.16 Finance income and cost Finance income comprises: Interest income on funds invested (including on financial assets at fair value through other comprehensive income); Gains on the disposal of financial assets at fair value through other comprehensive income; Dividend income (excluding dividend from equity-accounted investees and subsidiaries); Fair value gains on financial assets at fair value through profit or loss; and Gains on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group\u2019s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date. Finance cost comprises: Interest expense on borrowings; Unwinding of the discount on provisions and contingent consideration; Interest expense related to lease obligations; Losses on disposal of financial assets at fair value through other comprehensive income; Fair value losses on financial assets at fair value through profit or loss; Loss on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income; and Impairment losses recognized on financial assets (other than trade receivables). Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss and expensed as incurred. Foreign currency gains and losses are recognized on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-523": { "value": "Finance cost comprises: Interest expense on borrowings; Unwinding of the discount on provisions and contingent consideration; Interest expense related to lease obligations; Losses on disposal of financial assets at fair value through other comprehensive income; Fair value losses on financial assets at fair value through profit or loss; Loss on hedging instruments related to foreign currency and interest rate derivatives that are recognized in profit or loss and reclassifications of amounts previously recognized in other comprehensive income; and Impairment losses recognized on financial assets (other than trade receivables). Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss and expensed as incurred. Foreign currency gains and losses are recognized on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-526": { "value": " 3.17 Employee benefits Defined contribution plan Certain Group subsidiaries provide pension plans, end of service remuneration plans and long-term service benefits. These pension plans qualify as defined contribution plans. Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Long-term employee benefits The Group long-term employee benefits are recognized if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably to determine its present value. The discount rate is the yield at the balance sheet date on triple-A (\u2018AAA\u2019) credit rated bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Re-measurements are recognized in profit or loss in the period in which they arise. Termination benefits Employee termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. OCI recognizes termination benefits when OCI is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or when OCI is providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value. Equity settled share-based payments Certain employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments. The grant date fair value of equity-settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period (the vesting period) that the employees render service and becomes unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. At each reporting date, the progress of non-market conditions is measured and the expenses are recorded accordingly with true-ups recorded. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-527": { "value": " Termination benefits Employee termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. OCI recognizes termination benefits when OCI is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or when OCI is providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-528": { "value": " Equity settled share-based payments Certain employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments. The grant date fair value of equity-settled share-based payment awards granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period (the vesting period) that the employees render service and becomes unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. At each reporting date, the progress of non-market conditions is measured and the expenses are recorded accordingly with true-ups recorded. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-529": { "value": " 3.18 Income tax Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Current tax also includes any tax arising from the declaration of dividends. Current income tax receivable and payable are offset when there is a legally enforceable right to offset and when the current income tax relates to the same fiscal authority. Deferred tax liabilities are recognized for all taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements (\u2018balance sheet\u2019 method). Deferred tax assets are recognized for all deductible temporary differences, unused carry forward losses and unused carry forward tax credits, to the extent that it is probable that future taxable profit will be available against which the deferred income tax assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss. Also, no deferred income tax is recognized regarding the initial recognition of goodwill and regarding investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. Deferred income tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority. In cases where it is concluded it is not probable that tax authorities will accept a tax treatment, the effect of the uncertainty is reflected in the recognition and measurement of tax assets and liabilities or, alternatively, a provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the company to change its judgment regarding the adequacy of existing tax assets and liabilities. Such changes to tax assets and liabilities will impact the income tax expense in the period during which such a determination is made. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-530": { "value": "Deferred tax liabilities are recognized for all taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements (\u2018balance sheet\u2019 method). Deferred tax assets are recognized for all deductible temporary differences, unused carry forward losses and unused carry forward tax credits, to the extent that it is probable that future taxable profit will be available against which the deferred income tax assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Deferred income tax is not recognized if it arises from initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss. Also, no deferred income tax is recognized regarding the initial recognition of goodwill and regarding investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. Deferred income tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date, and reflects uncertainty related to income taxes, if any. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-534": { "value": " 3.19 Segment reporting An operating segment is a component of an entity that engages in business activities for which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity\u2019s Chief Operating Decision Maker (\u2018CODM\u2019) to make decisions about resource allocation to the segment and to assess its performance and for which discrete financial information is available. The Group determines and presents operating segments on the basis of information that internally is provided to the CODM during the period. Operating segments are grouped into reporting segments based on similar economic environments and similar products. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-535": { "value": " 3.20 Consolidated statement of cash flows The consolidated statement of cash flows has been prepared using the \u2018indirect\u2019 method. Cash flows in foreign currencies have been translated applying average exchange rates. Currency translation differences on cash are shown separately in the consolidated statement of cash flows. Cash flows from investing activities consist mostly of investments and divestments in property, plant and equipment, intangible assets, and acquisitions insofar as these are paid for in cash. Acquisitions or disposals of subsidiaries are presented as acquisition of subsidiary, net of cash. Cash flows relating to capitalized borrowing cost are presented as cash flows from operating activities. Cash flows from financing activities consist of aquisition or divestment of non-controlling interests and settlement of derivatives, with the exception of interest rate derivatives which are presented as cash flows used in operating activities. Cash flows from discontinued operations / assets held for demerger are presented separately from the cash flows from continuing operations. The presentation of withholding tax paid on subsidiary dividends changed from cash flows used in financing activities to cash flows used in operating activities in 2022. Withholding tax paid on subsidiary dividends in 2021 amounts to USD 10.6 million and is presented in dividends paid to non-controlling interests. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-536": { "value": " 3.21 Earnings per share Earnings per ordinary share are calculated by dividing the profit or loss (net) attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. In making this calculation the (ordinary) treasury shares are deducted from the number of ordinary shares outstanding. The calculation of the diluted earnings per share is based on the weighted average number of ordinary shares outstanding plus the potential increase as a result of the conversion of convertible bonds and the settlement of share-based compensation plans (share option plans). Anti-dilutive effects are not included in the calculation. An adjustment is made to profit or loss (net) to eliminate interest charges, whilst allowing for effect of taxation. Regarding equity-settled share option plans it is assumed that all outstanding plans will vest. The potential increase arising from share option plans is based on a calculation of the value of the options outstanding. This is the number of options multiplied by the exercise price, divided by the average share price during the financial year. This potential increase is only applied if the option has intrinsic value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-426": { "value": " 4 New accounting standards and policies On a regular basis, the IASB issues new accounting standards, amendments and revisions to existing standards and interpretations. These new accounting standards, amendments and revisions to existing standards and interpretations are subject to endorsement by the European Union. 4.1 Standards, amendments, revisions and interpretations that became effective to OCI during 2022 The Group has applied the following amendments that became effective during 2022: Amendments to IAS 37 - Onerous Contracts On 14 May 2020, the IASB issued 'Onerous Contracts \u2014 Cost of Fulfilling a Contract (Amendments to IAS 37)' amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The changes specify that the \u2018cost of fulfilling\u2019 a contract comprises the \u2018costs that relate directly to the contract\u2019. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The Group applies the amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the amendments are effective. Comparatives are not restated. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks has been undertaken globally, including the replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group\u2019s main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for LIBOR is the Secured Overnight Financing Rate (SOFR). The USD LIBOR will cease as per 30 June 2023. Reference is made to note 6.3. 4.2 Standards, amendments, revisions and interpretations not yet effective to OCI IFRS standards and interpretations thereof not yet in force which may apply to the future Group\u2019s consolidated financial statements are being assessed for their potential impact. The following new and amended standards are not expected to have a significant impact on the Group\u2019s consolidated financial statements. Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) Definition of Accounting Estimates (Amendments to IAS 8) ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-427": { "value": "The preparation of the financial statements in compliance with IFRS requires management to make judgments, estimates and assumptions that affect amounts reported in the consolidated financial statements. The estimates and assumptions are based on experience and various other factors that are believed to be reasonable under the circumstances and are used to judge the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised or in the revision period and future periods, if the changed estimates affect both current and future periods.
The most critical accounting policies, involving a higher degree of judgment and complexity in applying these principles and for which changes in the assumptions and estimates could result in significantly different results than those recorded in the financial statements, are the following:
Intangible assets with finite useful lives are carried at cost less cumulative amortization and any impairment. Amortization is calculated using the \u2018straight-line\u2019 method based on the estimated useful lives. Management makes estimates regarding the useful lives and residual values and assumes that amortization takes place on a \u2018straight-line\u2019 basis. The assets\u2019 useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
For intangible assets with finite useful lives, OCI assesses annually or more frequently whether indicators exist that suggest the intangible asset might be impaired by comparing the recoverable amounts with their carrying amounts. In determining the recoverable amounts of intangible assets, OCI makes estimates and assumptions about future cash flows based on the value in use. In doing so, OCI also makes assumptions and estimates regarding the discount rates in order to calculate the net present value of the future cash flows. OCI tests at least annually whether goodwill is impaired by comparing the recoverable amounts of cash-generating units with their carrying amounts.
The recoverable amount is the higher of the fair value less cost of disposal and the value in use. In determining the recoverable amount, OCI makes estimates and assumptions concerning future revenues, future costs, future working capital, future investments, Weighted Average Cost of Capital (\u2018WACC\u2019) and future inflation rates.
Depreciation is calculated using the \u2018straight-line\u2019 method based on the estimated useful lives, taking into account any residual values. Management makes estimates regarding the useful lives and residual values and assumes that depreciation takes place on a \u2018straight-line\u2019 basis. The assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. OCI assesses annually, or more frequently, whether indicators exist that suggest that an item of property, plant and equipment might be impaired by comparing the recoverable amounts with their carrying amounts.
In the useful life reassessment and in assessing for impairment indicators OCI also considers the impact of its ESG targets and of relevant transition and physical climate risks, if identified for a specific country or region. Transition risks are risks associated with transitioning to a lower-carbon economy and are primarily related to cost of climate impacts, new technologies, market developments and climate litigations. Physical risks are risks that arise from the physical effects of climate change.
In determining the recoverable amounts of property, plant and equipment, OCI makes estimates and assumptions about future cash flows based on the value in use. The discount rate to be used in order to calculate the net present value of the future cash flows in the impairment analysis is based on the WACC.
The fair value of financial instruments traded in active markets (financial instruments in the fair value hierarchy level 1) is based on quoted market prices at the balance sheet date. The fair value of financial instruments not traded in an active market with observable market prices (financial instruments in the fair value hierarchy level 2) is determined using generally accepted valuation techniques. These valuation techniques include estimates and assumptions about forward rates, discount rates based on a single interest rate, or on a yield-curve based on market conditions existing at the balance sheet date.
The fair value of borrowings and interest rate swaps is calculated based on the present value of the estimated future cash flows based on the yield-curve applicable at the balance sheet date. If the financial instrument contains a floating interest rate, the future expected interest rates are determined based on forward rates. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date. Gas price option and gas swap contracts are valued using applicable market yield curves.
All inputs for the fair value calculations represent observable market data that are obtained from external sources that are deemed to be independent and reliable. The net carrying amount of trade receivables and trade payables is assumed to approximate the fair value due to the short-term nature. The fair value of financial instruments with no observable market prices (financial instruments in the fair value hierarchy level 3) is based on assumptions that market participants would use when pricing these assets or liability, including assumptions about risk. Assumptions about risk include the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and the risk inherent in the inputs to the valuation technique, including a risk adjustment when there is significant measurement uncertainty.
The fair value of non-current financial liabilities is estimated by discounting the future cash flows using original effective yield-curves. Unlisted equity securities in the financial assets at fair value through other comprehensive income category (financial instruments in the fair value hierarchy level 3) are measured at cost less impairments. A significant and prolonged decline in the fair value of a financial asset at fair value through other comprehensive income below its acquisition cost is considered as an indicator that the financial asset at fair value through other comprehensive income is impaired.
If any such evidence exists for a financial asset at fair value through other comprehensive income, the cumulative losses previously recognized in other comprehensive income is recognized in the profit or loss \u2013 measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss \u2013 is removed from other comprehensive income and recognized in profit or loss.
Objective evidence may exist in circumstances in which a counterparty has been placed in bankruptcy, or has failed on the repayments of principal and interest. In other circumstances OCI uses judgment to determine whether financial assets may be impaired. OCI uses judgment to determine whether an impairment can be reversed, an assumption in doing so might be an improvement in the debtor\u2019s credit rating or receipt of payments due. For listed equity securities in the financial assets at fair value through other comprehensive income category, the Group uses the assumption that if the market value declined by more than 25 percent and more than 6 months, the asset is assumed to be impaired.
For unlisted equity securities in the financial assets at fair value through other comprehensive income category, an impairment test is performed if objective evidence becomes available to the Group that the asset might be impaired. For debt-securities, an impairment trigger exists when the counterpart fails to meet its contractual payment obligations or there is evidence that the counterpart has encountered financial difficulties. The impairment is determined based on the carrying amount and the recoverable amount. The recoverable amount is determined as the present value of estimated future cash flows using the original effective interest rate.
In determining the net realizable value of inventories, OCI estimates the selling prices in the ordinary course of business, cost of completion and cost to sell. In doing so, OCI makes estimates and assumptions based on current market prices, historical usage of various product categories versus current inventory levels and specific identified obsolescence risks (e.g. end of life of specific goods and spare parts and the impact of new environmental legislation).
Recognition of provisions include significant estimates, assumptions and judgments. IFRS requires only those provisions to be recognized if there is an expected outflow of resources and if the cost of these outflows can be estimated reliably.
Accordingly, management exercises considerable judgment in determining whether it is more likely than not that there is a present obligation as a result of a past event at the end of the reporting period, whether it is probable that such a proceeding will result in an outflow of resources and whether the amount of the obligation can be reliably estimated. These judgments are subject to change as new information becomes available.
The required amount of a provision may change in the future due to new developments in the matter. Revisions to estimates may significantly impact future profit or loss. Upon resolution, the Group may incur charges in excess of the recorded provisions for such matters.
Provisions for asset retirement obligations, represent estimated costs of decommissioning. Due to the long time period over which future cash outflows are expected to occur, including the respective interest accretion, assumptions are required to be made. Amongst others, the estimated cash outflows could alter significantly if, and when, political developments affect future laws and regulation with respect to asset retirements. The Group has not recognized any asset retirement obligations because a reliable estimate of the amount of the obligations cannot be made.
With respect to legal cases, the Group has to estimate the outcome. Regulatory and legal proceedings as well as government investigations often involve complex legal issues and are subject to substantial uncertainties. The Company periodically reviews the status of these proceedings with both the internal and external legal counsels.
OCI is subject to income taxes in several jurisdictions. Estimates are required in determining the groupwide provision for income taxes. There are some transactions and calculations for which the ultimate tax position is uncertain during the ordinary course of business. The Group recognizes provisions for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from amounts that were initially recorded, such differences will impact the current income tax and deferred tax provisions in the period in which such determination is made. OCI recognizes deferred tax assets to the extent that it is probable that future taxable profits will be available for the deferred tax asset to be recovered.
This is based on estimates of taxable future income by jurisdiction in which OCI operates and the period over which deferred tax assets are expected to be recoverable. In the event that actual results or new estimates differ from previous estimates and depending on the possible tax strategies that may be implemented, changes to the recognition of deferred tax assets could be required, which could impact the financial position and profit or loss.
The assessment of whether a contract is or contains a lease requires judgment with respect to whether the lessor has substantive substitution rights, who obtains economic benefits from use of the asset and who takes the \u2018how and for what purpose\u2019 decisions during the period of use. Judgment is also applied in order to assess whether the entity will exercise any extension or cancelation options of a lease. The group applies judgments in order to determine the incremental borrowing rate in order to calculate the lease liabilities.
Subsidiaries that OCI controls are fully consolidated from the date that control commences until the date that control ceases. To determine whether OCI has control over its subsidiaries, an assessment of control is required. This assessment is based on the requirements of IFRS 10 and evaluates whether OCI is exposed or has rights to variable returns from its involvement with the investee and whether OCI has the ability to affect those returns through its control over the investee, generally accompanying a shareholding of more than half of the shares issued and related voting power. In certain circumstances, the control assessment may require OCI to evaluate the effect of ownership structures, determination of relevant activities and other arrangements including the rights of other shareholders that could have an impact on the assessment of control, this specifically relates to control assessment of Fertiglobe and Sorfert. The significance of this evaluation is inversely correlated with OCI\u2019s shareholding in the subsidiary as shown in note 17 Non-controlling interests.
In determining whether OCI shall consolidate certain investments in joint arrangements, OCI makes assumptions about whether certain decision rights are substantive or protective in nature. In doing so, OCI applies judgment regarding shareholder agreements it has with those other investees. If OCI determines it holds the majority of the substantive decision rights, it assumes that it holds power over the investee. OCI also makes assumptions whether it is exposed to variable returns and whether these are linked to the power OCI holds. The linkage is tested by making assumptions whether OCI might be acting as a principal rather than an agent. If OCI meets all three criteria, OCI assumes it controls the investee.
As part of the preparation of the financial statements, the Company has assessed its liquidity risk and going concern. Liquidity risk is the risk that the Group may encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company has made a number of assumptions in assessing its ability to meet its covenant requirements and satisfy obligations as they become due. Determining these assumptions requires significant judgment about future results and cash flows. Key assumptions include product pricing, gas pricing, utilization rates and the ability to arrange financing and obtain waivers for potential covenant breaches.
The Company periodically reviews its obligations with respect to CO2 emission under the ETS program. The estimation of CO2 emissions is primarily based on the expected utilization of the production capacity for the remaining part of the compliance period. The estimation of the utilization of the production capacity is dependent on a number of assumptions with inherent uncertainty making it a critical accounting estimate. The identification of the number of excess EUAs is dependent on this estimate.
OCI faces significant risks and opportunities as a result of climate change and governmental actions to reduce greenhouse gas (GHG) emissions and create low-carbon and climate-resilient economies. Refer to section 5 Climate change risks and opportunities and Strategic risks for a description of these risks and opportunities. These risks and opportunities are integrated in the Group\u2019s risk management and strategy development processes, resulting in a decarbonization strategy. Accordingly this is also embedded in OCI\u2019s governance structure e.g. by way of the mandate of the HSE & Sustainability Committee. OCI\u2019s decarbonization strategy includes a commitment to 20% greenhouse gas intensity reduction by 2030 compared to 2019 and carbon neutrality by 2050.
In 2022 OCI has continued to assess global climate related risks and opportunities relevant for its business and continues to embed climate risks and opportunities into all relevant key business processes such as business planning, business performance reviews and capital value processes. Risk mitigating actions and new business opportunities are being targeted and developed. The risks of climate change for OCI\u2019s financial performance can be classified as physical risks or transition risks.
Physical risks caused by rising global temperatures include extreme weather events (hurricanes, floods), changing weather patterns, increased water stress, and rising sea levels. These events and changes can impact our supply chain, disrupt planting cycles and growing conditions, and impede farmers\u2019 ability to apply crop nutrients. Transition risks associated with transitioning to a lower-carbon economy are primarily related to (i) changes in carbon-linked regulations and policies, such as the ETS system, the proposed European carbon border adjustment mechanism, and other potential carbon taxation mechanisms, (ii) costs associated with transitioning to lower emissions technology and resource efficiency, and (iii) dietary shifts to more plant-based nutrition. Both types of risks can affect OCI in a multitude of ways.
As of year end 2022, the main key transitional risks identified in the time frame before 2030 relates to proposed climate change related regulations at both the international and national levels, such as the European Union\u2019s proposed carbon dioxide reduction targets, the proposed carbon border adjustment mechanism and the potential EU restrictions on nitrogen fertilizer application. The main physical risks identified refer to the impact to operations and the value chain by climate change in terms of more extreme weather conditions and natural disasters. Climate risks may result in material adjustments to the carrying amounts of assets and liabilities as a result of, among other things, future re-assessment of useful lives of tangible or intangible assets, changed assumptions used as basis for impairment testing of such assets, changes to environmental and decommission provisions, and changes to cost of capital. Significant judgment may be needed to estimate such adjustments.
As of year end 2022, any current and future financial impact to OCI of climate risks and opportunities are highly uncertain. OCI expects potential effects on margins due to higher emission costs as well as higher capital expenditure to reduce the impact of climate change. These factors have been taken into account in the impairment testing of major tangible assets (plants) and intangible assets, including goodwill. However, such effects are currently assessed as limited due to replacement of assets with greener alternatives mostly after the useful lives ended and has not led to impairments in 2022 nor to significant adjustment to useful lives of such assets. Consequently, OCI has not identified significant assets which may be of reduced or no value as of year end 2022 as a result of climate risk (\u201cstranded assets\u201d). Information on decommission provisions are provided in note 28 Contingencies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-428": { "value": " 6 Financial risk and capital management The Group has exposure to credit, liquidity and market risks from financial instruments. These risks arise from exposures that occur in the normal course of business and are managed on a consolidated company basis. This note presents information about the Group\u2019s exposure to each of the above risks, the Group\u2019s objectives, policies and processes for measuring and managing these risks, additionally it also includes the Group\u2019s management of capital. Risk management framework The Board of Directors has oversight responsibility on the establishment and monitoring of the Group\u2019s risk management framework. Senior (local) management is responsible for the effective operation of the internal risk management and control systems. The Audit and Risk department is responsible for the facilitation and supervision of the Risk Management function, compliance with OCI Internal Control Framework and supports the Board of Directors in the exercise of their aforementioned risk management duties. The Group\u2019s risk management policies and practices are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group\u2019s business activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and responsibilities. The Audit Committee oversees how management monitors compliance with the Group\u2019s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by the Audit and Risk Department. The Audit and Risk Department undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. 6.1 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers and investments in debt securities. The Company mitigates the exposure to credit risk on outstanding cash balances by placing funds at multiple financial institutions with a sufficient credit rating. The Group\u2019s exposure to customer credit risk is monitored and mitigated by performing credit checks before selling any goods. No collateral is received. The Group establishes an allowance, if needed, for impairment that represents its estimate of expected losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that are expected based on historical performance. IFRS 9 establishes a three-stage impairment model, based on whether there has been a significant increase in the credit risk of a financial asset since its initial recognition. As at 31 December 2022, management assessed any significant increase in credit risk based on internal and external factors related to the financial instruments and concluded no such significant credit risk was present. Hence, no allowance related to credit risk has been recognized. As of September 2018, the Group entered into a securitization agreement to sell certain trade receivables to an external financial institution. The agreement permits securitization of trade receivables up to EUR 400.0 million (USD 428.4 million). As per 31 December 2022 an amount of EUR 257.1 million (USD 270.0 million) of trade receivables were transferred. With respect to transactions with financial institutions, the Group sets a minimum credit rating for the counterparties. The maximum exposure to credit risk is the carrying amount of financial instruments, for an overview reference is made to the tables financial instruments by category. There is no significant concentration by counterparty of credit risk in trade and other receivables or financial assets at fair value through other comprehensive income. Concentrations of receivables by region can be seen in the table below. The maximum exposure to credit risk at the reporting date is as follows: $ millions Note 2022 2021 Trade and other receivables (9) 881.9 885.2 Financial assets at fair value through other comprehensive income (11) 18.8 19.2 Cash and cash equivalents (14) 1,717.0 1,580.3 Total \u00a02,617.7 2,484.7 The maximum exposure to credit risk for trade and other receivables by geographic region is as follows: $ millions 2022 2021 Middle East and Africa 138.4 175.0 Asia and Oceania 171.5 216.4 Europe 382.0 301.4 Americas 190.0 192.4 Total 881.9 885.2 The maximum exposure to credit risk for cash and cash equivalents by geographic region is as follows: $ millions 2022 2021 Middle East and Africa 1,442.0 899.1 Europe 193.1 462.2 Americas 81.9 219.0 Total 1,717.0 1,580.3 6.2 Liquidity risk 6.2.1 General Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: 31 December 2022 $ millions Note Carrying amount Contractual cash flow Less than 1 year Between 1 and 5 years More than 5 years Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 2,875.7 3,863.7 371.1 2,010.0 1,482.6 Lease obligations (19) 276.1 515.2 50.0 101.0 364.2 Trade and other payables (20) 1,257.0 1,257.0 1,167.0 87.2 2.8 Derivatives (20) 141.4 142.1 82.4 59.7 - Total \u00a04,550.2 5,778.0 1,670.5 2,257.9 1,849.6 31 December 2021 $ millions Note Carrying amount Contractual cash flow Less than 1 year Between 1 and 5 years More than 5 years Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 3,800.8 4,311.1 597.6 3,112.6 600.9 Lease obligations (19) 277.2 484.9 35.7 86.0 363.2 Trade and other payables (20) 1,368.4 1,368.4 1,345.5 22.5 0.4 Derivatives (20) 12.8 12.8 12.0 0.8 - Total \u00a05,459.2 6,177.2 1,990.8 3,221.9 964.5 The interest on floating rate loans and borrowings is based on forward interest rates at period-end. This interest rate may change as the market interest rate changes. The future obligations will be managed by the future incoming cash from operations, currently available non-restricted cash and cash equivalents of USD 1,692.2 million (2021: USD 1,439.5 million) and unused amounts on credit facility agreements in the amount of USD 1,750.0 million (2021: USD 800.0 million), reference is made to note ' Undrawn bank facilities'. The Group\u2019s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group\u2019s reputation. This is also safeguarded by using multiple financial institutions in order to mitigate any concentration of liquidity risk. The Group\u2019s financing strategy is to secure external financing primarily at OCI N.V. and Fertiglobe plc with debt at an operating company level only if there is a compelling economic rationale. OCI N.V. acts as the financing company thus limiting the number of cross relationships within the Group and maximizing flexibility to divest operating companies. The liquidity risk is monitored internally at Group level. On an ongoing basis the Group prepares liquidity forecasts to verify whether the Group is able to meet its future debt obligations. The Company has also carefully evaluated the funding of its Business Plan for at least the next 12 months from the date of issuance of the financial statements, taking into account the measures mentioned below and has applied sensitivities to the forecast level of liquidity headroom available. Key assumptions include product pricing, natural gas pricing and utilization rates. Management has applied these assumptions to the forecasts, which would leave sufficient liquidity headroom. 6.2.2 Refinancing activity The following refinancing activities were completed during 2022 to optimize the Group\u2019s finance cost and enhance its cashflow up-streaming to OCI N.V.: On 8 April 2022, OCI N.V. announced that it has closed a new unsecured multicurrency Revolving Credit Facility (\"RCF\") for a total of USD 1.1 billion, which replaced a facility of USD 850 million, which was undrawn at the time of refinancing and originally entered into in 2018. The new facility carried an interest margin at inception of 1.10% and has a tenor of 60 months. On 18 May 2022, OCI N.V. announced that its wholly-owned subsidiary IFCo has refinanced in full its outstanding capital markets debt. The refinancing involves the issuance by the Iowa Finance Authority of USD 838.8 million Midwestern Disaster Area Revenue Refunding Bonds (Iowa Fertilizer Company Project), Series 2022. The Series 2022 Bonds bear interest at a weighted average cost of capital of 4.60% per annum, payable semi-annually, and an average life of 22 years, and include: USD 150.0 million 10-year par bond with 4.00% coupon; USD 344.375 million 20-year premium bond with 5.0% coupon yielding 4.65%; and USD 344.370 million 28-year premium bond with 5.0% coupon yielding 4.80%. On 23 December 2022, Fertiglobe announced that it has refinanced its outstanding USD 900 million bridge facility, originally due in 2024, with new 3-year (USD 300 million) and 5-year (USD 600 million) term facilities with interest rates of SOFR + 150bps and SOFR + 175bps respectively. It further announced that it has increased its revolving credit facility from USD 300 million to USD 600 million and extended the facility's maturity from December 2026 to 2027. The margin on the RCF has been reduced from 175bps to 140bps over SOFR. The new term facilities were drawn on 4 January 2023 and the bridge facility repaid on the same date. For an overview of all loans and borrowings, reference is made to note 18. 6.3 Market risk 6.3.1 General Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity prices that will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. 6.3.2 Foreign currency risk The Group is exposed to foreign currency risk arising in separate ways: Foreign exchange transaction risk The Group entities predominantly execute their activities in their respective functional currencies. The Group is however exposed to foreign exchange transaction risk when Group entities enter into foreign currency denominated transactions. The Group monitors the exposure to foreign currency risk arising from operating activities and enters selectively into foreign exchange contracts to hedge foreign currency exposures. The nominal amount of the foreign currency derivatives outstanding used to hedge transaction risk as per 31 December 2022 was USD 62.3 million (2021: USD 142.6 million) and relates to the USD exposure of the Group (on Euro currencies). The functional currencies of the Group entities are primarily the US dollar, the Algerian dinar and the Euro. EFC and EBIC have exposure to fluctuations in the USD / EGP exchange rates and Fertil has exposure to fluctuations in the USD / AED echange rates. Foreign exchange translation risk The Group is exposed to the translation of foreign currency denominated monetary assets and liabilities. These exposures are managed by the Group's treasury function, which may hedge a portion of the foreign currency exposures estimated to arise in the foreseeable future. For the unhedged portion the Group seeks to mitigate translation risk by matching the remaining currency of debt with available cashflows in the respective currency. As per 31 December 2022 there were no foreign currency derivatives outstanding (2021: nil) related to the exposure of foreign currency denominated monetary assets and liabilities. The summary of balances of the Group\u2019s exposure to foreign exchange translations, where there is exposure for monetary items denominated in foreign currencies which differ from their functional currencies, including intercompany balances, is as follows: 31 December 2022 $ millions USD EUR EGP Trade and other receivables 72.7 20.0 72.9 Trade and other receivables - Intercompany 183.5 285.8 40.7 Trade and other payables (124.3) (3.4) (7.4) Trade and other payables - Intercompany (88.5) (247.7) (0.4) Loans and borrowings - - - Loans and borrowings - Intercompany (475.1) (109.3) - Provisions - - (76.8) Cash and cash equivalents 890.0 22.8 16.5 31 December 2021 $ millions USD EUR EGP Trade and other receivables 20.6 6.3 93.1 Trade and other receivables - Intercompany 1,980.6 67.6 0.3 Trade and other payables (10.5) (11.4) (8.0) Trade and other payables - Intercompany (161.2) (20.0) (0.5) Loans and borrowings (1,107.0) - - Loans and borrowings - Intercompany (1,212.6) (123.1) - Provisions - - (120.8) Cash and cash equivalents 411.6 13.9 24.0 The Algerian dinar is not included in the above table of foreign exchange translation exposure, since there are no entities in the Group which have monetary items denominated in Algerian dinar, except for Sorfert, which has the Algerian dinar as its functional currency. Significant exchange rates The following significant exchange rates applied during the year against the US dollar: \u00a0Average 2022 Average 2021 Closing 2022 Closing 2021 Euro 1.0533 1.1828 1.0711 1.1370 Egyptian pound 0.0530 0.0637 0.0404 0.0636 Algerian dinar 0.0070 0.0074 0.0073 0.0072 The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate to increase or (decrease) against the EUR, EGP and DZD, with all other variables held constant. The Group\u2019s exposure to foreign currency changes for all other currencies is not material. 31 December 2022 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 10 percent (49.0) (34.7) \u00a0(10) percent 49.0 34.7 EGP - USD 10 percent 4.5 - \u00a0(10) percent (4.5) - DZD - USD 4 percent 36.7 - \u00a0(4) percent (36.7) - 31 December 2021 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 5 percent 1.9 31.0 \u00a0(5) percent (1.9) (31.0) EGP - USD 3 percent (0.4) - \u00a0(3) percent 0.4 - DZD - USD 3 percent 21.9 - \u00a0(3) percent (21.9) - The figures in the above overview are determined based on the currency volatility of the respective years. A significant part of the Group\u2019s exposure to foreign currency transaction risk relates to intercompany balances. 6.3.3 Interest rate risk The Group\u2019s cash flow interest rate risks arise from the exposure to variability in future cash flows of floating rate financial instruments and refinancing fixed rate borrowings. The Group regularly reviews its exposure to the global interest rate environment. As per 31 December 2022 there were no interest rate derivatives outstanding. The interest rate derivatives were settled in 2022 due to a change in refinancing planning. In 2021, the Group had entered into interest rate derivatives with a notional amount of USD 125.0 million to manage the interest rate risk on floating rate instruments and the refinancing of fixed rate borrowings. The Group analyses its interest rate exposure on a dynamic basis. The Group calculates the impact on profit or loss of a defined interest rate shift. The same interest rate shift is used for all currencies. The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market data, showing a higher volatility compared to prior years. The interest rate sensitivity calculation is based on the interest-bearing liabilities. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Group\u2019s profit before tax is affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as follows: $ millions In basis points 2022 2021 Effect on profit before tax for the coming year + 200 bps (26.9) (35.9) - 200 bps 26.9 35.9 Interest rate benchmark reform A fundamental reform of major interest rate benchmarks has been undertaken globally, including the replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group\u2019s main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for LIBOR is the Secured Overnight Financing Rate (SOFR). The USD LIBOR will cease as per 30 June 2023. The Group has finished the process of amending contractual terms in response to IBOR reform during 2022. All financial instruments that are subject to the interest rate benchmark reform have contractual provisions in place to seamlessly transition to a new reference rate when publication of USD LIBOR ceases. All instruments subject to the reform are non-derivative financial liabilities. 6.3.4 Commodity price risk Natural gas is one of the primary raw materials used in the Group\u2019s production processes. The Group is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices. Management monitors the development of gas prices and products\u2019 selling prices on a daily basis using external historical and forecast market data provided by several data vendors. Management analyzes the potential profit margin per product based on this data in order to make operational and hedging decisions. For the entities that are impacted by changes in natural gas prices during FY 2023, a change in the average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD 81.0 million (2021: USD 91.6 million). The Group enters into gas hedges in order to hedge future gas price levels over a certain period of time (reference is made to note 20). The Group uses derivatives (Basis swaps, Index swaps and options) in order to do so and does not apply hedge accounting on these instruments, therefore all fair value changes related to these financial instruments are recognized in profit or loss. Where there is no past practice of being net cash-settled, fixed price gas contracts and month-ahead swaps are accounted for under the \u2018own use\u2019 exemption. The fiscal year 2023 gas price risk is reduced by the Group to an extent of 81% (including both physical pricings and financial hedges). The outstanding gas hedges in MMBtu as per 31 December 2022 for the years 2023-2025 are: Flat priced contracts 181.0 million (2021: 15.8 million); Options (delta equivalent) 7.3 million (2021: 14.6 million); Basis Swaps 0.9 million (2021: 0.1 million) The flat priced contracts in MMBtu as per 31 December 2022 for the years 2026 and beyond are 136.6 million. The Group has a cash collateral obligation for the outstanding gas hedges with one counterparty for any mark-to-market liability that exceeds USD 25 million. These hedges in MMBtu approximate 40% of the outstanding volume of gas hedges. As at 31 December 2022, no margin calls have taken place under this obligation. European Emission Allowance During the year, the Group has generated additional liquidity by selling EUAs to the market. This generated total net proceeds of USD 94.6 million (2021: USD 116.5 million) resulting from the sale and repurchase of EUAs. Included in the net proceeds received, a gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs. When EUAs are sold for cash management purposes, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. This liability is subsequently measured at fair value. The total liability recorded as per 31 December 2022 amounts to USD 36.7 million (2021: USD 116.2 million). To manage the fair value risk of the EUA liability, the Group entered into financial hedges to purchase 0.9 million (2021: 1.3 million) EUAs. As per 31 December 2022, the fair value of these forward contracts amounts to USD (5.2) million (2021: USD 42.7 million). The group does not apply hedge accounting to these contracts. Financial instruments The following table presents the various categories of financial instruments: 31 December 2022 $ millions Note Loans and receivables / payables at amortized cost Derivatives at fair value Financial assets at fair value through other comprehensive income Assets \u00a0\u00a0\u00a0\u00a0Trade and other receivables (9) 859.0 22.9 - Financial assets at fair value through other comprehensive income (11) - - 18.8 Cash and cash equivalents (14) 1,717.0 - - Total \u00a02,576.0 22.9 18.8 Liabilities \u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 2,875.7 - - Trade and other payables (20) 1,220.3 178.1 - Total \u00a04,096.0 178.1 - 31 December 2021 $ millions Note Loans and receivables / payables at amortized cost Derivatives at fair value Financial assets at fair value through other comprehensive income Assets \u00a0\u00a0\u00a0\u00a0Trade and other receivables (9) 831.8 53.4 - Financial assets at fair value through other comprehensive income (11) - - 19.2 Cash and cash equivalents (14) 1,580.3 - - Total \u00a02,412.1 53.4 19.2 Liabilities \u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 3,800.8 - - Trade and other payables (20) 1,252.2 129.0 - Total \u00a05,053.0 129.0 - The Group has limited financial instruments carried at fair value. For derivative financial instruments, the fair value is calculated within hierarchy category level 2. Financial assets at fair value through other comprehensive income recognized as level 1 is USD 2.2 million (2021: USD 2.8 million), the investment in the Infrastructure and Growth Capital Fund of USD 1.5 million (2021: USD 2.8 million) was recognized as level 2 as the valuation is partially derived from listed shares. The investment in Notore Chemical of USD 15.1 million (2021: USD 13.6 million) is recognized as level 3, reference is made to note 11. Notore is listed on the Nigerian Stock Exchange since 2018, however due to the lack in trading volumes the investment is still valued within the hierarchy category level 3 based on audited financial statements. In 2022 and 2021, there were no transfers between the fair value hierarchy categories. The fair value of loans and borrowings and receivables are disclosed in notes 18 and 9, respectively. 6.4 Capital management The Board\u2019s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interests of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group is required by external financial institutions to maintain certain capital requirements compared to its debt. Reference is made to note 18 for a description of financial covenants. The Group\u2019s net debt to equity ratio at the reporting date was as follows: $ millions Note 2022 2021 Loans and borrowings (18) 2,875.7 3,800.8 Less: cash and cash equivalents (14) 1,717.0 1,580.3 Net debt \u00a01,158.7 2,220.5 Total equity \u00a04,339.7 3,508.2 Net debt to equity ratio at 31 December \u00a00.27 0.63 In 2021, loans and borrowings included an amount of USD 383.1 million (2022: nil) related to the bank overdraft facility of OCI N.V. The amount drawn on this facility was also included in cash and cash equivalents and held by other entities within the Group. These amounts were not offset as they did not comply with the offsetting requirements for financial instruments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-429": { "value": " 6.1 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers and investments in debt securities. The Company mitigates the exposure to credit risk on outstanding cash balances by placing funds at multiple financial institutions with a sufficient credit rating. The Group\u2019s exposure to customer credit risk is monitored and mitigated by performing credit checks before selling any goods. No collateral is received. The Group establishes an allowance, if needed, for impairment that represents its estimate of expected losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that are expected based on historical performance. IFRS 9 establishes a three-stage impairment model, based on whether there has been a significant increase in the credit risk of a financial asset since its initial recognition. As at 31 December 2022, management assessed any significant increase in credit risk based on internal and external factors related to the financial instruments and concluded no such significant credit risk was present. Hence, no allowance related to credit risk has been recognized. As of September 2018, the Group entered into a securitization agreement to sell certain trade receivables to an external financial institution. The agreement permits securitization of trade receivables up to EUR 400.0 million (USD 428.4 million). As per 31 December 2022 an amount of EUR 257.1 million (USD 270.0 million) of trade receivables were transferred. With respect to transactions with financial institutions, the Group sets a minimum credit rating for the counterparties. The maximum exposure to credit risk is the carrying amount of financial instruments, for an overview reference is made to the tables financial instruments by category. There is no significant concentration by counterparty of credit risk in trade and other receivables or financial assets at fair value through other comprehensive income. Concentrations of receivables by region can be seen in the table below. The maximum exposure to credit risk at the reporting date is as follows: $ millions Note 2022 2021 Trade and other receivables (9) 881.9 885.2 Financial assets at fair value through other comprehensive income (11) 18.8 19.2 Cash and cash equivalents (14) 1,717.0 1,580.3 Total \u00a02,617.7 2,484.7 The maximum exposure to credit risk for trade and other receivables by geographic region is as follows: $ millions 2022 2021 Middle East and Africa 138.4 175.0 Asia and Oceania 171.5 216.4 Europe 382.0 301.4 Americas 190.0 192.4 Total 881.9 885.2 The maximum exposure to credit risk for cash and cash equivalents by geographic region is as follows: $ millions 2022 2021 Middle East and Africa 1,442.0 899.1 Europe 193.1 462.2 Americas 81.9 219.0 Total 1,717.0 1,580.3 ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-430": { "value": " 6.2 Liquidity risk 6.2.1 General Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: 31 December 2022 $ millions Note Carrying amount Contractual cash flow Less than 1 year Between 1 and 5 years More than 5 years Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 2,875.7 3,863.7 371.1 2,010.0 1,482.6 Lease obligations (19) 276.1 515.2 50.0 101.0 364.2 Trade and other payables (20) 1,257.0 1,257.0 1,167.0 87.2 2.8 Derivatives (20) 141.4 142.1 82.4 59.7 - Total \u00a04,550.2 5,778.0 1,670.5 2,257.9 1,849.6 31 December 2021 $ millions Note Carrying amount Contractual cash flow Less than 1 year Between 1 and 5 years More than 5 years Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 3,800.8 4,311.1 597.6 3,112.6 600.9 Lease obligations (19) 277.2 484.9 35.7 86.0 363.2 Trade and other payables (20) 1,368.4 1,368.4 1,345.5 22.5 0.4 Derivatives (20) 12.8 12.8 12.0 0.8 - Total \u00a05,459.2 6,177.2 1,990.8 3,221.9 964.5 The interest on floating rate loans and borrowings is based on forward interest rates at period-end. This interest rate may change as the market interest rate changes. The future obligations will be managed by the future incoming cash from operations, currently available non-restricted cash and cash equivalents of USD 1,692.2 million (2021: USD 1,439.5 million) and unused amounts on credit facility agreements in the amount of USD 1,750.0 million (2021: USD 800.0 million), reference is made to note ' Undrawn bank facilities'. The Group\u2019s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group\u2019s reputation. This is also safeguarded by using multiple financial institutions in order to mitigate any concentration of liquidity risk. The Group\u2019s financing strategy is to secure external financing primarily at OCI N.V. and Fertiglobe plc with debt at an operating company level only if there is a compelling economic rationale. OCI N.V. acts as the financing company thus limiting the number of cross relationships within the Group and maximizing flexibility to divest operating companies. The liquidity risk is monitored internally at Group level. On an ongoing basis the Group prepares liquidity forecasts to verify whether the Group is able to meet its future debt obligations. The Company has also carefully evaluated the funding of its Business Plan for at least the next 12 months from the date of issuance of the financial statements, taking into account the measures mentioned below and has applied sensitivities to the forecast level of liquidity headroom available. Key assumptions include product pricing, natural gas pricing and utilization rates. Management has applied these assumptions to the forecasts, which would leave sufficient liquidity headroom. 6.2.2 Refinancing activity The following refinancing activities were completed during 2022 to optimize the Group\u2019s finance cost and enhance its cashflow up-streaming to OCI N.V.: On 8 April 2022, OCI N.V. announced that it has closed a new unsecured multicurrency Revolving Credit Facility (\"RCF\") for a total of USD 1.1 billion, which replaced a facility of USD 850 million, which was undrawn at the time of refinancing and originally entered into in 2018. The new facility carried an interest margin at inception of 1.10% and has a tenor of 60 months. On 18 May 2022, OCI N.V. announced that its wholly-owned subsidiary IFCo has refinanced in full its outstanding capital markets debt. The refinancing involves the issuance by the Iowa Finance Authority of USD 838.8 million Midwestern Disaster Area Revenue Refunding Bonds (Iowa Fertilizer Company Project), Series 2022. The Series 2022 Bonds bear interest at a weighted average cost of capital of 4.60% per annum, payable semi-annually, and an average life of 22 years, and include: USD 150.0 million 10-year par bond with 4.00% coupon; USD 344.375 million 20-year premium bond with 5.0% coupon yielding 4.65%; and USD 344.370 million 28-year premium bond with 5.0% coupon yielding 4.80%. On 23 December 2022, Fertiglobe announced that it has refinanced its outstanding USD 900 million bridge facility, originally due in 2024, with new 3-year (USD 300 million) and 5-year (USD 600 million) term facilities with interest rates of SOFR + 150bps and SOFR + 175bps respectively. It further announced that it has increased its revolving credit facility from USD 300 million to USD 600 million and extended the facility's maturity from December 2026 to 2027. The margin on the RCF has been reduced from 175bps to 140bps over SOFR. The new term facilities were drawn on 4 January 2023 and the bridge facility repaid on the same date. For an overview of all loans and borrowings, reference is made to note 18. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-431": { "value": " 6.3 Market risk 6.3.1 General Market risk is the risk of changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity prices that will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. 6.3.2 Foreign currency risk The Group is exposed to foreign currency risk arising in separate ways: Foreign exchange transaction risk The Group entities predominantly execute their activities in their respective functional currencies. The Group is however exposed to foreign exchange transaction risk when Group entities enter into foreign currency denominated transactions. The Group monitors the exposure to foreign currency risk arising from operating activities and enters selectively into foreign exchange contracts to hedge foreign currency exposures. The nominal amount of the foreign currency derivatives outstanding used to hedge transaction risk as per 31 December 2022 was USD 62.3 million (2021: USD 142.6 million) and relates to the USD exposure of the Group (on Euro currencies). The functional currencies of the Group entities are primarily the US dollar, the Algerian dinar and the Euro. EFC and EBIC have exposure to fluctuations in the USD / EGP exchange rates and Fertil has exposure to fluctuations in the USD / AED echange rates. Foreign exchange translation risk The Group is exposed to the translation of foreign currency denominated monetary assets and liabilities. These exposures are managed by the Group's treasury function, which may hedge a portion of the foreign currency exposures estimated to arise in the foreseeable future. For the unhedged portion the Group seeks to mitigate translation risk by matching the remaining currency of debt with available cashflows in the respective currency. As per 31 December 2022 there were no foreign currency derivatives outstanding (2021: nil) related to the exposure of foreign currency denominated monetary assets and liabilities. The summary of balances of the Group\u2019s exposure to foreign exchange translations, where there is exposure for monetary items denominated in foreign currencies which differ from their functional currencies, including intercompany balances, is as follows: 31 December 2022 $ millions USD EUR EGP Trade and other receivables 72.7 20.0 72.9 Trade and other receivables - Intercompany 183.5 285.8 40.7 Trade and other payables (124.3) (3.4) (7.4) Trade and other payables - Intercompany (88.5) (247.7) (0.4) Loans and borrowings - - - Loans and borrowings - Intercompany (475.1) (109.3) - Provisions - - (76.8) Cash and cash equivalents 890.0 22.8 16.5 31 December 2021 $ millions USD EUR EGP Trade and other receivables 20.6 6.3 93.1 Trade and other receivables - Intercompany 1,980.6 67.6 0.3 Trade and other payables (10.5) (11.4) (8.0) Trade and other payables - Intercompany (161.2) (20.0) (0.5) Loans and borrowings (1,107.0) - - Loans and borrowings - Intercompany (1,212.6) (123.1) - Provisions - - (120.8) Cash and cash equivalents 411.6 13.9 24.0 The Algerian dinar is not included in the above table of foreign exchange translation exposure, since there are no entities in the Group which have monetary items denominated in Algerian dinar, except for Sorfert, which has the Algerian dinar as its functional currency. Significant exchange rates The following significant exchange rates applied during the year against the US dollar: \u00a0Average 2022 Average 2021 Closing 2022 Closing 2021 Euro 1.0533 1.1828 1.0711 1.1370 Egyptian pound 0.0530 0.0637 0.0404 0.0636 Algerian dinar 0.0070 0.0074 0.0073 0.0072 The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate to increase or (decrease) against the EUR, EGP and DZD, with all other variables held constant. The Group\u2019s exposure to foreign currency changes for all other currencies is not material. 31 December 2022 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 10 percent (49.0) (34.7) \u00a0(10) percent 49.0 34.7 EGP - USD 10 percent 4.5 - \u00a0(10) percent (4.5) - DZD - USD 4 percent 36.7 - \u00a0(4) percent (36.7) - 31 December 2021 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 5 percent 1.9 31.0 \u00a0(5) percent (1.9) (31.0) EGP - USD 3 percent (0.4) - \u00a0(3) percent 0.4 - DZD - USD 3 percent 21.9 - \u00a0(3) percent (21.9) - The figures in the above overview are determined based on the currency volatility of the respective years. A significant part of the Group\u2019s exposure to foreign currency transaction risk relates to intercompany balances. 6.3.3 Interest rate risk The Group\u2019s cash flow interest rate risks arise from the exposure to variability in future cash flows of floating rate financial instruments and refinancing fixed rate borrowings. The Group regularly reviews its exposure to the global interest rate environment. As per 31 December 2022 there were no interest rate derivatives outstanding. The interest rate derivatives were settled in 2022 due to a change in refinancing planning. In 2021, the Group had entered into interest rate derivatives with a notional amount of USD 125.0 million to manage the interest rate risk on floating rate instruments and the refinancing of fixed rate borrowings. The Group analyses its interest rate exposure on a dynamic basis. The Group calculates the impact on profit or loss of a defined interest rate shift. The same interest rate shift is used for all currencies. The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market data, showing a higher volatility compared to prior years. The interest rate sensitivity calculation is based on the interest-bearing liabilities. The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Group\u2019s profit before tax is affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as follows: $ millions In basis points 2022 2021 Effect on profit before tax for the coming year + 200 bps (26.9) (35.9) - 200 bps 26.9 35.9 Interest rate benchmark reform A fundamental reform of major interest rate benchmarks has been undertaken globally, including the replacement of some interbank offered rates (IBOR), with alternative nearly risk-free rates. The Group\u2019s main IBOR exposure at the reporting date is USD LIBOR on its loans. The alternative reference rate for LIBOR is the Secured Overnight Financing Rate (SOFR). The USD LIBOR will cease as per 30 June 2023. The Group has finished the process of amending contractual terms in response to IBOR reform during 2022. All financial instruments that are subject to the interest rate benchmark reform have contractual provisions in place to seamlessly transition to a new reference rate when publication of USD LIBOR ceases. All instruments subject to the reform are non-derivative financial liabilities. 6.3.4 Commodity price risk Natural gas is one of the primary raw materials used in the Group\u2019s production processes. The Group is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices. Management monitors the development of gas prices and products\u2019 selling prices on a daily basis using external historical and forecast market data provided by several data vendors. Management analyzes the potential profit margin per product based on this data in order to make operational and hedging decisions. For the entities that are impacted by changes in natural gas prices during FY 2023, a change in the average natural gas prices by USD 1 per MMBtu would impact the total annual cost of sales by USD 81.0 million (2021: USD 91.6 million). The Group enters into gas hedges in order to hedge future gas price levels over a certain period of time (reference is made to note 20). The Group uses derivatives (Basis swaps, Index swaps and options) in order to do so and does not apply hedge accounting on these instruments, therefore all fair value changes related to these financial instruments are recognized in profit or loss. Where there is no past practice of being net cash-settled, fixed price gas contracts and month-ahead swaps are accounted for under the \u2018own use\u2019 exemption. The fiscal year 2023 gas price risk is reduced by the Group to an extent of 81% (including both physical pricings and financial hedges). The outstanding gas hedges in MMBtu as per 31 December 2022 for the years 2023-2025 are: Flat priced contracts 181.0 million (2021: 15.8 million); Options (delta equivalent) 7.3 million (2021: 14.6 million); Basis Swaps 0.9 million (2021: 0.1 million) The flat priced contracts in MMBtu as per 31 December 2022 for the years 2026 and beyond are 136.6 million. The Group has a cash collateral obligation for the outstanding gas hedges with one counterparty for any mark-to-market liability that exceeds USD 25 million. These hedges in MMBtu approximate 40% of the outstanding volume of gas hedges. As at 31 December 2022, no margin calls have taken place under this obligation. European Emission Allowance During the year, the Group has generated additional liquidity by selling EUAs to the market. This generated total net proceeds of USD 94.6 million (2021: USD 116.5 million) resulting from the sale and repurchase of EUAs. Included in the net proceeds received, a gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs. When EUAs are sold for cash management purposes, a liability is recognized for the obligation to refund the allowances for CO2 emissions during the compliance period. This liability is subsequently measured at fair value. The total liability recorded as per 31 December 2022 amounts to USD 36.7 million (2021: USD 116.2 million). To manage the fair value risk of the EUA liability, the Group entered into financial hedges to purchase 0.9 million (2021: 1.3 million) EUAs. As per 31 December 2022, the fair value of these forward contracts amounts to USD (5.2) million (2021: USD 42.7 million). The group does not apply hedge accounting to these contracts. Financial instruments The following table presents the various categories of financial instruments: 31 December 2022 $ millions Note Loans and receivables / payables at amortized cost Derivatives at fair value Financial assets at fair value through other comprehensive income Assets \u00a0\u00a0\u00a0\u00a0Trade and other receivables (9) 859.0 22.9 - Financial assets at fair value through other comprehensive income (11) - - 18.8 Cash and cash equivalents (14) 1,717.0 - - Total \u00a02,576.0 22.9 18.8 Liabilities \u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 2,875.7 - - Trade and other payables (20) 1,220.3 178.1 - Total \u00a04,096.0 178.1 - 31 December 2021 $ millions Note Loans and receivables / payables at amortized cost Derivatives at fair value Financial assets at fair value through other comprehensive income Assets \u00a0\u00a0\u00a0\u00a0Trade and other receivables (9) 831.8 53.4 - Financial assets at fair value through other comprehensive income (11) - - 19.2 Cash and cash equivalents (14) 1,580.3 - - Total \u00a02,412.1 53.4 19.2 Liabilities \u00a0\u00a0\u00a0\u00a0Loans and borrowings (18) 3,800.8 - - Trade and other payables (20) 1,252.2 129.0 - Total \u00a05,053.0 129.0 - The Group has limited financial instruments carried at fair value. For derivative financial instruments, the fair value is calculated within hierarchy category level 2. Financial assets at fair value through other comprehensive income recognized as level 1 is USD 2.2 million (2021: USD 2.8 million), the investment in the Infrastructure and Growth Capital Fund of USD 1.5 million (2021: USD 2.8 million) was recognized as level 2 as the valuation is partially derived from listed shares. The investment in Notore Chemical of USD 15.1 million (2021: USD 13.6 million) is recognized as level 3, reference is made to note 11. Notore is listed on the Nigerian Stock Exchange since 2018, however due to the lack in trading volumes the investment is still valued within the hierarchy category level 3 based on audited financial statements. In 2022 and 2021, there were no transfers between the fair value hierarchy categories. The fair value of loans and borrowings and receivables are disclosed in notes 18 and 9, respectively. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-432": { "value": " 6.3.2 Foreign currency risk The Group is exposed to foreign currency risk arising in separate ways: Foreign exchange transaction risk The Group entities predominantly execute their activities in their respective functional currencies. The Group is however exposed to foreign exchange transaction risk when Group entities enter into foreign currency denominated transactions. The Group monitors the exposure to foreign currency risk arising from operating activities and enters selectively into foreign exchange contracts to hedge foreign currency exposures. The nominal amount of the foreign currency derivatives outstanding used to hedge transaction risk as per 31 December 2022 was USD 62.3 million (2021: USD 142.6 million) and relates to the USD exposure of the Group (on Euro currencies). The functional currencies of the Group entities are primarily the US dollar, the Algerian dinar and the Euro. EFC and EBIC have exposure to fluctuations in the USD / EGP exchange rates and Fertil has exposure to fluctuations in the USD / AED echange rates. Foreign exchange translation risk The Group is exposed to the translation of foreign currency denominated monetary assets and liabilities. These exposures are managed by the Group's treasury function, which may hedge a portion of the foreign currency exposures estimated to arise in the foreseeable future. For the unhedged portion the Group seeks to mitigate translation risk by matching the remaining currency of debt with available cashflows in the respective currency. As per 31 December 2022 there were no foreign currency derivatives outstanding (2021: nil) related to the exposure of foreign currency denominated monetary assets and liabilities. The summary of balances of the Group\u2019s exposure to foreign exchange translations, where there is exposure for monetary items denominated in foreign currencies which differ from their functional currencies, including intercompany balances, is as follows: 31 December 2022 $ millions USD EUR EGP Trade and other receivables 72.7 20.0 72.9 Trade and other receivables - Intercompany 183.5 285.8 40.7 Trade and other payables (124.3) (3.4) (7.4) Trade and other payables - Intercompany (88.5) (247.7) (0.4) Loans and borrowings - - - Loans and borrowings - Intercompany (475.1) (109.3) - Provisions - - (76.8) Cash and cash equivalents 890.0 22.8 16.5 31 December 2021 $ millions USD EUR EGP Trade and other receivables 20.6 6.3 93.1 Trade and other receivables - Intercompany 1,980.6 67.6 0.3 Trade and other payables (10.5) (11.4) (8.0) Trade and other payables - Intercompany (161.2) (20.0) (0.5) Loans and borrowings (1,107.0) - - Loans and borrowings - Intercompany (1,212.6) (123.1) - Provisions - - (120.8) Cash and cash equivalents 411.6 13.9 24.0 The Algerian dinar is not included in the above table of foreign exchange translation exposure, since there are no entities in the Group which have monetary items denominated in Algerian dinar, except for Sorfert, which has the Algerian dinar as its functional currency. Significant exchange rates The following significant exchange rates applied during the year against the US dollar: \u00a0Average 2022 Average 2021 Closing 2022 Closing 2021 Euro 1.0533 1.1828 1.0711 1.1370 Egyptian pound 0.0530 0.0637 0.0404 0.0636 Algerian dinar 0.0070 0.0074 0.0073 0.0072 The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rate to increase or (decrease) against the EUR, EGP and DZD, with all other variables held constant. The Group\u2019s exposure to foreign currency changes for all other currencies is not material. 31 December 2022 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 10 percent (49.0) (34.7) \u00a0(10) percent 49.0 34.7 EGP - USD 10 percent 4.5 - \u00a0(10) percent (4.5) - DZD - USD 4 percent 36.7 - \u00a0(4) percent (36.7) - 31 December 2021 $ millions Change in FX rate Effect on profit before tax Effect on equity EUR - USD 5 percent 1.9 31.0 \u00a0(5) percent (1.9) (31.0) EGP - USD 3 percent (0.4) - \u00a0(3) percent 0.4 - DZD - USD 3 percent 21.9 - \u00a0(3) percent (21.9) - The figures in the above overview are determined based on the currency volatility of the respective years. A significant part of the Group\u2019s exposure to foreign currency transaction risk relates to intercompany balances. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-434": { "value": " 6.4 Capital management The Board\u2019s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interests of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group is required by external financial institutions to maintain certain capital requirements compared to its debt. Reference is made to note 18 for a description of financial covenants. The Group\u2019s net debt to equity ratio at the reporting date was as follows: $ millions Note 2022 2021 Loans and borrowings (18) 2,875.7 3,800.8 Less: cash and cash equivalents (14) 1,717.0 1,580.3 Net debt \u00a01,158.7 2,220.5 Total equity \u00a04,339.7 3,508.2 Net debt to equity ratio at 31 December \u00a00.27 0.63 In 2021, loans and borrowings included an amount of USD 383.1 million (2022: nil) related to the bank overdraft facility of OCI N.V. The amount drawn on this facility was also included in cash and cash equivalents and held by other entities within the Group. These amounts were not offset as they did not comply with the offsetting requirements for financial instruments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-435": { "value": " 7 Property, plant and equipment and right-of-use assets $ millions Land and buildings Plant and equipment Fixtures and fittings Under construction Total Cost 751.9 9,328.1 60.4 146.2 10,286.6 Accumulated depreciation (185.7) (3,813.7) (42.9) - (4,042.3) At 1 January 2021 566.2 5,514.4 17.5 146.2 6,244.3 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions 2.0 25.1 4.8 203.3 235.2 Disposals - (2.4) - - (2.4) Depreciation (24.8) (531.8) (3.5) - (560.1) Impairment (1.3) (244.7) (0.3) (30.0) (276.3) Transfers 0.6 163.0 1.2 (164.8) - Reclassification to inventory - (19.0) - - (19.0) Asset retirement obligation - - 8.7 - 8.7 Movement in exchange rates (3.2) (76.1) (0.7) (6.9) (86.9) At 31 December 2021 539.5 4,828.5 27.7 147.8 5,543.5 Cost 748.6 9,208.8 73.8 147.8 10,179.0 Accumulated depreciation (209.1) (4,380.3) (46.1) - (4,635.5) At 31 December 2021 539.5 4,828.5 27.7 147.8 5,543.5 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions 38.9 42.2 2.6 310.4 394.1 Disposals (1.7) (1.1) 0.1 (2.2) (4.9) Depreciation (29.0) (495.0) (5.9) - (529.9) Impairment - (22.3) - - (22.3) Transfers 0.4 193.8 1.0 (195.2) - Reclassification - 32.5 - (1.1) 31.4 Asset retirement obligation - - (6.3) - (6.3) Movement in exchange rates 0.4 (10.7) (1.1) (3.1) (14.5) At 31 December 2022 548.5 4,567.9 18.1 256.6 5,391.1 Cost 778.6 9,371.6 67.8 256.6 10,474.6 Accumulated depreciation (230.1) (4,803.7) (49.7) - (5,083.5) At 31 December 2022 548.5 4,567.9 18.1 256.6 5,391.1 As at 31 December 2022, the Group has land with a carrying amount of USD 69.7 million (2021: USD 35.3 million). The transfers of USD 195.2 million (2021: USD 164.8 million) are assets under construction that were put into use during the year. Transfers mainly relate to OCIB for USD 72.6 million, OCIN for USD 42.0 million, Fertil for USD 41.0 million and EBIC for USD 30.6 million. The additions of USD 394.1 million (2021: USD 235.2 million) mainly relate to OCIN for USD 96.6 million, OCIB for USD 68.1 million, Fertil for USD 47.7 million and IFCo for USD 36.3 million. The effect of movement in exchange rates in 2022 mainly relates to Sorfert, BioMCN and OCIN, which have different functional currencies (Algerian dinar and Euro respectively) compared to the Group\u2019s presentation currency. The Algerian dinar increased by 1.4% and the Euro decreased by 5.8% against the US dollar in 2022. The capitalized borrowing costs during the year ended 31 December 2022 amounts to USD 1.0 million (2021: nil). The difference between the additions in the above schedule and the investments in property, plant and equipment mentioned in the consolidated statement of cash flows is mainly caused by changes in capital expenditure creditors not yet paid and capitalized borrowing costs, which are presented as part of interest expenses under cash flows from operating activities in the consolidated statement of cash flows. For capital commitments reference is made to note 29. In 2022, no property, plant and equipment (2021: USD 1,835.9 million) has been pledged as security for external loans and borrowings of IFCo. Reference is made to note 18. Impairment BioMCN During 2022 an impairment loss of USD 12.8 million (2021: USD 264.5 million) and USD 5.2 million (2021: 13.8 million) was recognized in cost of sales on the property, plant and equipment and right of use assets, respectively, of BioMCN. Over the course of the year 2021, European gas prices reached historically high price levels, which has a significant negative impact on the financial performance of BioMCN. In response to the high gas price environment, management decided to temporarily shut down the production facilities at BioMCN from June 2021 onwards. The carrying amount of these asset is nil as of December 31, 2022. The shutdown of the production facilities was initiated to avoid significant contribution losses caused by the historically high gas prices. The impairment loss on BioMCN property, plant and equipment recognized 2022 pertains to investments made to maintain the ability to quickly respond to changes in market prices. These investments are subsequently impaired as the recoverable amount for the cash generating unit is deemed zero. The impairment recognized for right-of-use assets relates to a lease modification that was subsequently impaired due to the aforementioned. Right-of-use assets $ millions Land and buildings Plant and equipment Fixtures and fittings Total At 1 January 2021 147.8 81.8 49.8 279.4 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0Additions 18.7 12.9 1.7 33.3 Modifications 1.0 3.3 - 4.3 Disposals (2.4) (2.7) - (5.1) Depreciation (9.2) (22.4) (9.8) (41.4) Impairment (3.9) (9.9) - (13.8) Movement in exchange rates (6.2) (2.3) - (8.5) At 31 December 2021 145.8 60.7 41.7 248.2 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0Additions 12.6 27.8 2.4 42.8 Modifications 0.4 2.9 - 3.3 Disposals - (0.3) - (0.3) Depreciation (10.3) (22.0) (9.6) (41.9) Impairment (0.5) (4.7) - (5.2) Movement in exchange rates (5.5) (1.2) - (6.7) At 31 December 2022 142.5 63.2 34.5 240.2 The additions of USD 42.8 million (2021: USD 33.3 million) mainly relate to N-7 for USD 12.5 million, OMM US for USD 7.7 million and OCIN for USD 6.4 million. The effect of movement in exchange rates of USD 6.7 million (2021: USD 8.5 million) mainly relates to OCIN and OCI UK, which have a different functional currency (Euro) compared to the Group\u2019s presentation currency. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-436": { "value": " 8 Goodwill and other intangible assets $ millions Goodwill Licences and trademarks Other intangible assets Under construction Total Cost 1,808.8 74.0 5.4 - 1,888.2 Accumulated amortization and impairment (1,322.9) (74.0) (4.8) - (1,401.7) At 1 January 2021 485.9 - 0.6 - 486.5 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - 1.1 - 1.1 Amortization - - (0.2) - (0.2) Movement in exchange rates (1.7) - - - (1.7) At 31 December 2021 484.2 - 1.5 - 485.7 Cost 1,807.1 74.0 6.5 - 1,887.6 Accumulated amortization and impairment (1,322.9) (74.0) (5.0) - (1,401.9) At 31 December 2021 484.2 - 1.5 - 485.7 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - - 6.4 6.4 Reclassification - - - 1.1 1.1 Amortization - - (0.3) - (0.3) Movement in exchange rates (1.2) - (0.2) - (1.4) At 31 December 2022 483.0 - 1.0 7.5 491.5 Cost 1,805.9 70.7 6.3 7.5 1,890.4 Accumulated amortization and impairment (1,322.9) (70.7) (5.3) - (1,398.9) At 31 December 2022 483.0 - 1.0 7.5 491.5 Goodwill Goodwill has been allocated to the cash generating units as follows: Cash generating units $ millions Reporting segment 2022 2021 Egyptian Fertilizers Company ('EFC') Fertiglobe 440.0 440.0 OCI Beaumont ('OCIB') Methanol US 23.0 23.0 OCI Nitrogen ('OCIN') Nitrogen Europe 20.0 21.2 Total \u00a0483.0 484.2 Goodwill impairment testing The determination of the recoverable amounts for the cash generating units requires significant judgments and estimates, including projections of future cash flows from the businesses. The recoverable amounts have been estimated based on value in use. The tests were carried out by discounting future cash flows to be generated from the continuing use of the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value growth rate, selling price outlook per product, natural gas prices and the number of expected operating days per plant. The terminal growth rate was determined based on the long term US Treasury constant maturity yield. The discount rate is a post-tax measure estimated based on the capital asset pricing model. Selling price and natural gas price assumptions are based on a published independent price outlook prepared by global experts. The other assumptions used are based on past experiences and external sources, but that are unpredictable and inherently uncertain. The impairment tests are based on specific estimates for cash flow projections for the years 2023 to 2027 (this period captures the cyclical nature of the industry). For the subsequent years, the residual values were calculated based on the average EBITDA margin of the last two years of the projection period and whereby a perpetual growth rate of 4.08% was used. The estimated cash flows are discounted using a present value technique. The following rates were applied in performing the impairment test: Percentage 2022 2021 Pre-tax discount rate 19.85% 12.62% Perpetual growth rate 4.08% 2.02% Result of the impairment test For all cash generating units the recoverable values significantly exceed their carrying amounts. No reasonably possible change in a key assumption would cause the cash generating unit\u2019s carrying amount to exceed the recoverable amount. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-437": { "value": " 8 Goodwill and other intangible assets $ millions Goodwill Licences and trademarks Other intangible assets Under construction Total Cost 1,808.8 74.0 5.4 - 1,888.2 Accumulated amortization and impairment (1,322.9) (74.0) (4.8) - (1,401.7) At 1 January 2021 485.9 - 0.6 - 486.5 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - 1.1 - 1.1 Amortization - - (0.2) - (0.2) Movement in exchange rates (1.7) - - - (1.7) At 31 December 2021 484.2 - 1.5 - 485.7 Cost 1,807.1 74.0 6.5 - 1,887.6 Accumulated amortization and impairment (1,322.9) (74.0) (5.0) - (1,401.9) At 31 December 2021 484.2 - 1.5 - 485.7 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - - 6.4 6.4 Reclassification - - - 1.1 1.1 Amortization - - (0.3) - (0.3) Movement in exchange rates (1.2) - (0.2) - (1.4) At 31 December 2022 483.0 - 1.0 7.5 491.5 Cost 1,805.9 70.7 6.3 7.5 1,890.4 Accumulated amortization and impairment (1,322.9) (70.7) (5.3) - (1,398.9) At 31 December 2022 483.0 - 1.0 7.5 491.5 Goodwill Goodwill has been allocated to the cash generating units as follows: Cash generating units $ millions Reporting segment 2022 2021 Egyptian Fertilizers Company ('EFC') Fertiglobe 440.0 440.0 OCI Beaumont ('OCIB') Methanol US 23.0 23.0 OCI Nitrogen ('OCIN') Nitrogen Europe 20.0 21.2 Total \u00a0483.0 484.2 Goodwill impairment testing The determination of the recoverable amounts for the cash generating units requires significant judgments and estimates, including projections of future cash flows from the businesses. The recoverable amounts have been estimated based on value in use. The tests were carried out by discounting future cash flows to be generated from the continuing use of the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value growth rate, selling price outlook per product, natural gas prices and the number of expected operating days per plant. The terminal growth rate was determined based on the long term US Treasury constant maturity yield. The discount rate is a post-tax measure estimated based on the capital asset pricing model. Selling price and natural gas price assumptions are based on a published independent price outlook prepared by global experts. The other assumptions used are based on past experiences and external sources, but that are unpredictable and inherently uncertain. The impairment tests are based on specific estimates for cash flow projections for the years 2023 to 2027 (this period captures the cyclical nature of the industry). For the subsequent years, the residual values were calculated based on the average EBITDA margin of the last two years of the projection period and whereby a perpetual growth rate of 4.08% was used. The estimated cash flows are discounted using a present value technique. The following rates were applied in performing the impairment test: Percentage 2022 2021 Pre-tax discount rate 19.85% 12.62% Perpetual growth rate 4.08% 2.02% Result of the impairment test For all cash generating units the recoverable values significantly exceed their carrying amounts. No reasonably possible change in a key assumption would cause the cash generating unit\u2019s carrying amount to exceed the recoverable amount. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-438": { "value": " 8 Goodwill and other intangible assets $ millions Goodwill Licences and trademarks Other intangible assets Under construction Total Cost 1,808.8 74.0 5.4 - 1,888.2 Accumulated amortization and impairment (1,322.9) (74.0) (4.8) - (1,401.7) At 1 January 2021 485.9 - 0.6 - 486.5 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - 1.1 - 1.1 Amortization - - (0.2) - (0.2) Movement in exchange rates (1.7) - - - (1.7) At 31 December 2021 484.2 - 1.5 - 485.7 Cost 1,807.1 74.0 6.5 - 1,887.6 Accumulated amortization and impairment (1,322.9) (74.0) (5.0) - (1,401.9) At 31 December 2021 484.2 - 1.5 - 485.7 Movements in carrying amount: \u00a0\u00a0\u00a0\u00a0\u00a0Additions - - - 6.4 6.4 Reclassification - - - 1.1 1.1 Amortization - - (0.3) - (0.3) Movement in exchange rates (1.2) - (0.2) - (1.4) At 31 December 2022 483.0 - 1.0 7.5 491.5 Cost 1,805.9 70.7 6.3 7.5 1,890.4 Accumulated amortization and impairment (1,322.9) (70.7) (5.3) - (1,398.9) At 31 December 2022 483.0 - 1.0 7.5 491.5 Goodwill Goodwill has been allocated to the cash generating units as follows: Cash generating units $ millions Reporting segment 2022 2021 Egyptian Fertilizers Company ('EFC') Fertiglobe 440.0 440.0 OCI Beaumont ('OCIB') Methanol US 23.0 23.0 OCI Nitrogen ('OCIN') Nitrogen Europe 20.0 21.2 Total \u00a0483.0 484.2 Goodwill impairment testing The determination of the recoverable amounts for the cash generating units requires significant judgments and estimates, including projections of future cash flows from the businesses. The recoverable amounts have been estimated based on value in use. The tests were carried out by discounting future cash flows to be generated from the continuing use of the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value growth rate, selling price outlook per product, natural gas prices and the number of expected operating days per plant. The terminal growth rate was determined based on the long term US Treasury constant maturity yield. The discount rate is a post-tax measure estimated based on the capital asset pricing model. Selling price and natural gas price assumptions are based on a published independent price outlook prepared by global experts. The other assumptions used are based on past experiences and external sources, but that are unpredictable and inherently uncertain. The impairment tests are based on specific estimates for cash flow projections for the years 2023 to 2027 (this period captures the cyclical nature of the industry). For the subsequent years, the residual values were calculated based on the average EBITDA margin of the last two years of the projection period and whereby a perpetual growth rate of 4.08% was used. The estimated cash flows are discounted using a present value technique. The following rates were applied in performing the impairment test: Percentage 2022 2021 Pre-tax discount rate 19.85% 12.62% Perpetual growth rate 4.08% 2.02% Result of the impairment test For all cash generating units the recoverable values significantly exceed their carrying amounts. No reasonably possible change in a key assumption would cause the cash generating unit\u2019s carrying amount to exceed the recoverable amount. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-439": { "value": " Goodwill impairment testing The determination of the recoverable amounts for the cash generating units requires significant judgments and estimates, including projections of future cash flows from the businesses. The recoverable amounts have been estimated based on value in use. The tests were carried out by discounting future cash flows to be generated from the continuing use of the cash-generating units to which the goodwill applies and on the assumption of an indefinite life. Key assumptions used in the calculation of recoverable amounts are the discount rate, the terminal value growth rate, selling price outlook per product, natural gas prices and the number of expected operating days per plant. The terminal growth rate was determined based on the long term US Treasury constant maturity yield. The discount rate is a post-tax measure estimated based on the capital asset pricing model. Selling price and natural gas price assumptions are based on a published independent price outlook prepared by global experts. The other assumptions used are based on past experiences and external sources, but that are unpredictable and inherently uncertain. The impairment tests are based on specific estimates for cash flow projections for the years 2023 to 2027 (this period captures the cyclical nature of the industry). For the subsequent years, the residual values were calculated based on the average EBITDA margin of the last two years of the projection period and whereby a perpetual growth rate of 4.08% was used. The estimated cash flows are discounted using a present value technique. The following rates were applied in performing the impairment test: Percentage 2022 2021 Pre-tax discount rate 19.85% 12.62% Perpetual growth rate 4.08% 2.02% Result of the impairment test For all cash generating units the recoverable values significantly exceed their carrying amounts. No reasonably possible change in a key assumption would cause the cash generating unit\u2019s carrying amount to exceed the recoverable amount. ", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-441": { "value": " 9 Trade and other receivables $ millions 2022 2021 Trade receivables (net) 500.7 577.2 Loans and trade receivables due from related parties 25.8 5.0 Prepayments 135.0 57.6 Other tax receivables 102.4 116.9 Supplier advance payments 39.0 31.2 Commodity and natural gas derivatives 18.7 10.7 EUA derivatives 0.4 42.7 Foreign currency derivatives 3.8 - Other derivatives - - Other receivables 56.1 43.9 Total 881.9 885.2 Non-current 61.7 33.6 Current 820.2 851.6 Total 881.9 885.2 In 2018, the Group entered into a securitization agreement to sell certain trade receivables to an external financial institution. By doing so, the Group is able to receive cash flows from selected debtors sooner than would normally be the case. Upon transfer of the balances, OCI derecognizes the trade receivables, since substantially all risks and rewards of ownership are transferred. The agreement permits securitization of trade receivables up to EUR 400.0 million (USD 428.4 million) (2021: EUR 200.0 million). As per 31 December 2022 an amount of EUR 257.1 million (2021: EUR 200.0 million) of trade receivables had been transferred. The transferred trade receivables are pledged as security under the securitization program. The other tax receivable contains an amount of EGP 900 million (USD 36.4 million) relating to a payment made to the Egyptian Tax Authorities as part of the tax claim which will be refunded upon settlement of the tax claim. Reference is made to note OCI S.A.E. tax dispute. USD 61.4 million (2021: USD 53.1 million) is related to paid VAT to be collected in various jurisdictions. The carrying amount of \u2018Trade and other receivables\u2019 as at 31 December 2022 approximates its fair value. The aging of current trade receivables at the reporting date were as follows: $ millions 2022 2021 Neither past due nor impaired 480.9 559.7 Past due 1 - 30 days 16.3 14.2 Past due 31 - 90 days 1.7 1.8 Past due 91 - 360 days 1.5 1.2 More than 360 days 0.3 0.3 Total 500.7 577.2 Management believes that the unimpaired amounts that are past due by more than 30 days (USD 3.5 million) are collectible in full, based on historic payment behavior and extensive analysis of customer credit risk, including underlying customers\u2019 credit ratings if they are available. The Group has not recognized any allowance for trade receivables. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-442": { "value": " 10 Equity-accounted investees The following table shows the movements in the carrying amount of the Group\u2019s associates and joint ventures: $ millions 2022 2021 At 1 January 494.9 468.7 Share in income 21.7 7.3 Investment in Rainbow Holdco - 23.6 Dividends (1.8) (2.5) Other comprehensive income 9.7 - Effect of movement in exchange rates (2.2) (2.2) At 31 December 522.3 494.9 Joint ventures 1.2 1.1 Associates 521.1 493.8 Total 522.3 494.9 The Group has interests in the following associates and joint ventures: Name Type Participation via Country Participation Firewater LLC (Natgasoline) Associate Firewater B.V. United States 50.0% White Rock Insurance PCC Ltd. Associate OCI N.V. The Netherlands 5.0% Sitech Manufacturing Services C.V. Associate OCI Nitrogen B.V. The Netherlands 35.0% Sitech Services B.V. Associate OCI Nitrogen B.V. The Netherlands 23.0% Rainbow Holdco B.V. Associate OCI Nitrogen B.V. The Netherlands 43.0% Egypt Green Hydrogen SAE Associate Fertiglobe Green Investments LLC UAE 20.0% Nitrogen Iberian Company SL. Joint venture OCI Nitrogen B.V. Spain 50.0% Shanxi Fenghe Melamine Company Ltd. Joint venture OCI Nitrogen B.V. China 49.0% The following table summarizes the financial information of the Group\u2019s associates and joint ventures (on a 100% basis): \u00a02022 2021 $ millions Associates Joint ventures Total Associates Joint ventures Total Non-current assets 2,041.4 - 2,041.4 2,161.8 - 2,161.8 Current assets 457.1 33.7 490.8 315.0 15.5 330.5 Non-current liabilities (1,115.1) (5.5) (1,120.6) (1,121.4) (8.7) (1,130.1) Current liabilities (294.1) (25.7) (319.8) (323.1) (4.5) (327.6) Net assets 1,089.3 2.5 1,091.8 1,032.3 2.3 1,034.6 Income 1,109.6 43.4 1,153.0 867.3 27.2 894.5 Expenses (1,060.8) (43.1) (1,103.9) (844.7) (27.0) (871.7) Net profit 48.8 0.3 49.1 22.6 0.2 22.8 The following chart summarizes the financial information of significant associates (on a 100% basis): \u00a0Firewater LLC (Natgasoline) Sitech Services B.V. $ millions 2022 2021 2022 2021 Non-current assets 1,846.4 1,973.8 121.2 124.4 Current assets (excluding cash and cash equivalents) 190.4 108.7 26.5 30.0 Cash and cash equivalents 60.5 52.3 21.4 20.3 Non-current liabilities (1,051.6) (1,050.8) (63.4) (70.6) Current liabilities (95.7) (178.4) (43.9) (44.6) Net assets 950.0 905.6 61.8 59.5 Group's share of net assets 475.0 452.8 14.2 13.7 \u00a0\u00a0\u00a0\u00a0\u00a0Revenues 518.2 319.5 220.9 222.3 Depreciation (153.9) (157.4) (11.9) (13.8) Interest income 0.8 - - - Interest expense (61.5) (56.1) (1.3) (1.3) Profit / (loss) before taxes 32.0 (0.4) 15.1 17.4 Tax expense (8.5) - (3.5) (5.0) Profit / (loss) after taxes 23.5 (0.4) 11.6 12.4 Other comprehensive income 19.4 - - - Total comprehensive income 42.9 (0.4) 11.6 12.4 Group's share in total comprehensive income 22.8 (0.2) 2.7 2.8 Dividends - - 5.9 11.0 Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is a methanol plant in Texas USA, and Sitech, which operates at the Chemelot site in Geleen, the Netherlands, where the factory of OCIN is based. The Chemelot site is also used by other companies. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-443": { "value": " 10 Equity-accounted investees The following table shows the movements in the carrying amount of the Group\u2019s associates and joint ventures: $ millions 2022 2021 At 1 January 494.9 468.7 Share in income 21.7 7.3 Investment in Rainbow Holdco - 23.6 Dividends (1.8) (2.5) Other comprehensive income 9.7 - Effect of movement in exchange rates (2.2) (2.2) At 31 December 522.3 494.9 Joint ventures 1.2 1.1 Associates 521.1 493.8 Total 522.3 494.9 The Group has interests in the following associates and joint ventures: Name Type Participation via Country Participation Firewater LLC (Natgasoline) Associate Firewater B.V. United States 50.0% White Rock Insurance PCC Ltd. Associate OCI N.V. The Netherlands 5.0% Sitech Manufacturing Services C.V. Associate OCI Nitrogen B.V. The Netherlands 35.0% Sitech Services B.V. Associate OCI Nitrogen B.V. The Netherlands 23.0% Rainbow Holdco B.V. Associate OCI Nitrogen B.V. The Netherlands 43.0% Egypt Green Hydrogen SAE Associate Fertiglobe Green Investments LLC UAE 20.0% Nitrogen Iberian Company SL. Joint venture OCI Nitrogen B.V. Spain 50.0% Shanxi Fenghe Melamine Company Ltd. Joint venture OCI Nitrogen B.V. China 49.0% The following table summarizes the financial information of the Group\u2019s associates and joint ventures (on a 100% basis): \u00a02022 2021 $ millions Associates Joint ventures Total Associates Joint ventures Total Non-current assets 2,041.4 - 2,041.4 2,161.8 - 2,161.8 Current assets 457.1 33.7 490.8 315.0 15.5 330.5 Non-current liabilities (1,115.1) (5.5) (1,120.6) (1,121.4) (8.7) (1,130.1) Current liabilities (294.1) (25.7) (319.8) (323.1) (4.5) (327.6) Net assets 1,089.3 2.5 1,091.8 1,032.3 2.3 1,034.6 Income 1,109.6 43.4 1,153.0 867.3 27.2 894.5 Expenses (1,060.8) (43.1) (1,103.9) (844.7) (27.0) (871.7) Net profit 48.8 0.3 49.1 22.6 0.2 22.8 The following chart summarizes the financial information of significant associates (on a 100% basis): \u00a0Firewater LLC (Natgasoline) Sitech Services B.V. $ millions 2022 2021 2022 2021 Non-current assets 1,846.4 1,973.8 121.2 124.4 Current assets (excluding cash and cash equivalents) 190.4 108.7 26.5 30.0 Cash and cash equivalents 60.5 52.3 21.4 20.3 Non-current liabilities (1,051.6) (1,050.8) (63.4) (70.6) Current liabilities (95.7) (178.4) (43.9) (44.6) Net assets 950.0 905.6 61.8 59.5 Group's share of net assets 475.0 452.8 14.2 13.7 \u00a0\u00a0\u00a0\u00a0\u00a0Revenues 518.2 319.5 220.9 222.3 Depreciation (153.9) (157.4) (11.9) (13.8) Interest income 0.8 - - - Interest expense (61.5) (56.1) (1.3) (1.3) Profit / (loss) before taxes 32.0 (0.4) 15.1 17.4 Tax expense (8.5) - (3.5) (5.0) Profit / (loss) after taxes 23.5 (0.4) 11.6 12.4 Other comprehensive income 19.4 - - - Total comprehensive income 42.9 (0.4) 11.6 12.4 Group's share in total comprehensive income 22.8 (0.2) 2.7 2.8 Dividends - - 5.9 11.0 Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is a methanol plant in Texas USA, and Sitech, which operates at the Chemelot site in Geleen, the Netherlands, where the factory of OCIN is based. The Chemelot site is also used by other companies. ", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-444": { "value": " 10 Equity-accounted investees The following table shows the movements in the carrying amount of the Group\u2019s associates and joint ventures: $ millions 2022 2021 At 1 January 494.9 468.7 Share in income 21.7 7.3 Investment in Rainbow Holdco - 23.6 Dividends (1.8) (2.5) Other comprehensive income 9.7 - Effect of movement in exchange rates (2.2) (2.2) At 31 December 522.3 494.9 Joint ventures 1.2 1.1 Associates 521.1 493.8 Total 522.3 494.9 The Group has interests in the following associates and joint ventures: Name Type Participation via Country Participation Firewater LLC (Natgasoline) Associate Firewater B.V. United States 50.0% White Rock Insurance PCC Ltd. Associate OCI N.V. The Netherlands 5.0% Sitech Manufacturing Services C.V. Associate OCI Nitrogen B.V. The Netherlands 35.0% Sitech Services B.V. Associate OCI Nitrogen B.V. The Netherlands 23.0% Rainbow Holdco B.V. Associate OCI Nitrogen B.V. The Netherlands 43.0% Egypt Green Hydrogen SAE Associate Fertiglobe Green Investments LLC UAE 20.0% Nitrogen Iberian Company SL. Joint venture OCI Nitrogen B.V. Spain 50.0% Shanxi Fenghe Melamine Company Ltd. Joint venture OCI Nitrogen B.V. China 49.0% The following table summarizes the financial information of the Group\u2019s associates and joint ventures (on a 100% basis): \u00a02022 2021 $ millions Associates Joint ventures Total Associates Joint ventures Total Non-current assets 2,041.4 - 2,041.4 2,161.8 - 2,161.8 Current assets 457.1 33.7 490.8 315.0 15.5 330.5 Non-current liabilities (1,115.1) (5.5) (1,120.6) (1,121.4) (8.7) (1,130.1) Current liabilities (294.1) (25.7) (319.8) (323.1) (4.5) (327.6) Net assets 1,089.3 2.5 1,091.8 1,032.3 2.3 1,034.6 Income 1,109.6 43.4 1,153.0 867.3 27.2 894.5 Expenses (1,060.8) (43.1) (1,103.9) (844.7) (27.0) (871.7) Net profit 48.8 0.3 49.1 22.6 0.2 22.8 The following chart summarizes the financial information of significant associates (on a 100% basis): \u00a0Firewater LLC (Natgasoline) Sitech Services B.V. $ millions 2022 2021 2022 2021 Non-current assets 1,846.4 1,973.8 121.2 124.4 Current assets (excluding cash and cash equivalents) 190.4 108.7 26.5 30.0 Cash and cash equivalents 60.5 52.3 21.4 20.3 Non-current liabilities (1,051.6) (1,050.8) (63.4) (70.6) Current liabilities (95.7) (178.4) (43.9) (44.6) Net assets 950.0 905.6 61.8 59.5 Group's share of net assets 475.0 452.8 14.2 13.7 \u00a0\u00a0\u00a0\u00a0\u00a0Revenues 518.2 319.5 220.9 222.3 Depreciation (153.9) (157.4) (11.9) (13.8) Interest income 0.8 - - - Interest expense (61.5) (56.1) (1.3) (1.3) Profit / (loss) before taxes 32.0 (0.4) 15.1 17.4 Tax expense (8.5) - (3.5) (5.0) Profit / (loss) after taxes 23.5 (0.4) 11.6 12.4 Other comprehensive income 19.4 - - - Total comprehensive income 42.9 (0.4) 11.6 12.4 Group's share in total comprehensive income 22.8 (0.2) 2.7 2.8 Dividends - - 5.9 11.0 Included in the associates is Firewater LLC, the holding company of Natgasoline LLC, which is a methanol plant in Texas USA, and Sitech, which operates at the Chemelot site in Geleen, the Netherlands, where the factory of OCIN is based. The Chemelot site is also used by other companies. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-445": { "value": " 12 Income taxes 12.1 Income tax in the statement of profit or loss $ millions 2022 2021 Current tax (241.5) (242.5) Deferred tax (172.3) 105.4 Total income tax reported in profit or loss (413.8) (137.1) Current tax expense $ millions 2022 2021 Current year (223.6) (222.5) Minimum tax requirements (2.0) (9.6) Dividend withholding tax (18.0) (10.6) Changes in estimates relating to prior years 2.1 0.2 Income tax expense reported in profit or loss (241.5) (242.5) The main contributor to the current year tax expense is Fertil. Deferred tax expense $ millions 2022 2021 Origination and reversal of temporary differences (246.3) (60.5) Movement in uncertain tax positions 48.9 (92.7) Changes in tax rates (0.4) - Recognition of previously unrecognized tax assets 39.6 264.7 Unrecognized tax assets (14.1) (0.1) Dividend withholding tax - (6.0) Income tax benefit / (expense) reported in profit or loss (172.3) 105.4 12.2 Other comprehensive income $ millions 2022 2021 Cash flow hedges, effective portion of changes in fair value 2.5 4.8 Income tax benefit reported in OCI 2.5 4.8 12.3 Reconciliation of effective tax rate OCI\u2019s operations are subject to income taxes in various foreign jurisdictions. The statutory income tax rates vary from 0.0% to 25.8%, which results in a difference between the effective income tax rate and the Netherlands\u2019 statutory income tax rate of 25.8%. Reconciliation of the statutory income tax rate in the Netherlands with the effective income tax rate can be summarized as follows: $ millions 2022 % 2021 % Profit before income tax 2,840.1 \u00a01,295.9 \u00a0Enacted income tax rate in the Netherlands 25.8% \u00a025.0% \u00a0Income tax expense calculated at the enacted Dutch tax rate (732.7) (25.8) (324.0) (25.0) Effect of tax rates in foreign jurisdictions 98.2 3.5 40.1 3.1 Expenses non-deductible (44.1) (1.6) (58.5) (4.5) Income not subject to tax 208.6 7.3 123.2 9.5 Adjustments prior years 2.1 0.1 0.2 - Change in tax rates (0.4) - - - Recognition of previously unrecognized tax assets 39.6 1.4 264.7 20.4 Unrecognized tax losses (14.1) (0.5) - - Unrecognized temporary differences - - (65.6) (5.1) Dividend withholding tax (18.0) (0.6) (16.6) (1.3) Minimum tax requirements (2.0) (0.1) (9.6) (0.7) Uncertain tax positions 1.4 - (92.7) (7.1) Foreign exchange effects 47.5 1.7 - - Other 0.1 - 1.7 0.1 Total income tax in profit or loss (413.8) (14.6) (137.1) (10.6) The Group\u2019s consolidated effective tax rate in respect of continuing operations for the period ended 31 December 2022 was 14.6% (2021: 10.6%). Compared to the statutory tax rate applicable in the Netherlands (25.8%) the following elements are the main drivers for the lower effective tax rate of 14.6%: The main driver for the lower effective tax rate are the export activities of Sorfert and the status of EBIC as a free zone company. The profits generated by these activities are tax exempt and therefore result in a significant reduction of the effective tax rate for the group. OCI's activities in foreign jurisdictions also contributed favorably to the effective tax rate. The blended statutory rate based on the 2022 profitability was 22.3% (2021: 21.9%). The effective tax rate was also favorably impacted by currency devaluations on uncertain tax positions and lower non-deductible costs. Recognition of previously unrecognized tax losses During 2022, a portion of BioMCN's property plant and equipment was impaired for tax purposes, thereby reversing a deductible temporary difference related to these assets. This tax benefit was offset against current year taxable income of BioMCN. During 2021, a deferred tax asset related to net operating losses was recognized at IFCo. The recognition resulted in a net deferred tax asset of USD 200.3 million and therefore was a significant component of the 2021 tax expense. All available net operating losses and tax credits available for IFCo were recognized in 2021. In addition to the losses recognized for IFCo, the BioMCN tax group was able to utilize all available tax losses in 2021 due to strong financial performance of OCI Fuels and the sale of excess EUAs of BioMCN. Pillar Two global minimum tax On 20 December 2021, the jurisdictions of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (\u2018OECD BEPS\u2019) released the so-called Pillar Two Model Rules (also referred to as the \u201cAnti Global Base Erosion\u201d or \u201cGloBE\u201d Rules) which are designed to ensure that large multinational enterprises (MNEs) pay a minimum level of tax of 15% on the aggregated qualifying income arising in each jurisdiction where they operate (\u2018Pillar Two\u2019). On 15 December 2022, the EU Member States unanimously adopted an EU directive ensuring a global minimum level of taxation and agreed to apply these rules for fiscal years starting on or after 31 December 2023. A taxpayer will fall within the scope of Pillar Two if it has foreign presence, more than EUR 750 million in consolidated revenues and is not listed as an out-of-scope entity. A qualifying taxpayer calculates its effective tax rate for the aggregated activities in each jurisdiction where it operates and pays top-up tax for the difference between its effective tax rate per jurisdiction and the global minimum tax rate of 15%. Any resulting top-up tax is generally charged in the jurisdiction of the ultimate parent of the MNE (OCI N.V.). The OCI group is at risk of a top-up tax for the activities held by the Fertiglobe group due to respective source jurisdictions having a potential effective tax rate below 15% as determined under the Pillar Two rules. As the Pillar Two rules allow for a levy by the source jurisdiction under the so-called Qualifying Domestic Minimum Top-up Tax as well as by an intermediate holding jurisdiction under the Partially Owned Parent Entity rules, it remains uncertain in which jurisdiction the top-up tax will need to be remitted as well as based on which ownership percentage. It is expected that in the course of 2023 other relevant jurisdictions will announce further guidance on the implementation of the Pillar Two rules in their respective jurisdictions. 12.4 Deferred income tax assets and liabilities Changes in deferred tax asset and liabilities (net): $ millions 2022 2021 At 1 January (406.7) (514.7) Profit or loss (172.3) 105.4 Reclassification to current income tax payable 183.0 - Effect of movement in exchange rates (recognized in equity) (8.0) 2.6 At 31 December (404.0) (406.7) Recognized deferred tax assets and liabilities: \u00a0Assets Liabilities Net $ millions 2022 2021 2022 2021 2022 2021 Intangible assets 63.8 82.9 (63.0) (62.9) 0.8 20.0 Property, plant and equipment - - (650.8) (587.1) (650.8) (587.1) Inventory 13.2 0.4 (16.8) (14.9) (3.6) (14.5) Investment in partnership - - - (75.2) - (75.2) Trade and other receivables 0.5 0.2 (0.4) (0.3) 0.1 (0.1) Loans and borrowings 47.9 31.3 6.4 (0.6) 54.3 30.7 Trade and other payables 23.4 12.9 (13.9) - 9.5 12.9 Provisions - - - (3.0) - (3.0) Uncertain tax positions - - (14.3) (148.6) (14.3) (148.6) Undistributed earnings - - (24.5) (21.7) (24.5) (21.7) Operating losses carry forward and tax credits 224.5 379.9 - - 224.5 379.9 At 31 December 373.3 507.6 (777.3) (914.3) (404.0) (406.7) Netting of fiscal positions (292.0) (299.9) 292.0 299.9 - - Amounts recognized in the Statement of Financial Position 81.3 207.7 (485.3) (614.4) (404.0) (406.7) The deferred tax asset relating to intangible assets mainly related to capitalized start-up costs for IFCo for USD 51.3 million. These costs are capitalized and amortized for tax purposes and were expensed for book purposes. Deferred tax liabilities relating to intangible assets mainly relates to goodwill of EFC for USD 62.6 million. This deferred tax liability will be reversed in case the asset is impaired. Deferred tax liabilities recognized in relation to property, plant and equipment will be realized over the depreciation period of the related asset, and mainly relate to IFCo (USD 252.8 million), Fertil (USD 232.4 million), OCIB (USD 81.2 million), EFC (USD 56.7 million) and OCIN (USD 22.8 million). The deferred tax liability for investments in partnership has been reclassed to other categories, following a change in the partnership structure for OCIB. The majority of the deferred tax liability was attributed to the property, plant and equipment category as presented in the table above. The uncertain tax position of USD 14.3 million is disclosed below. The deferred tax liability \u2018undistributed earnings\u2019 relates to income tax consequences of undistributed earnings of subsidiaries and associates that will reverse in the foreseeable future. The Company does not anticipate any other income tax consequences resulting from the undistributed earnings of subsidiaries and associates. Deferred tax assets relate to temporary differences, tax credits and tax losses carry forward. The Company has net tax losses carry forward and tax credits totalling USD 332.3 million, for which an amount of USD 184.0 million has not been recognized. The losses carry forward mainly relate to the US and Egyptian operations. Tax credits are available amounting to USD 76.2 million mainly relating to the US operations. Uncertain tax positions The group is subject to the application of complex tax laws in multiple jurisdictions. Application of these complex tax laws may lead to uncertainties in determining tax positions. We aim to resolve these uncertainties in discussions with the tax authorities. The financial effect of the existing uncertainties per balance sheet date are determined in accordance with IAS 12 and IFRIC 23, which requires us to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any uncertain tax position is judgmental. As of 31 December 2022, the Group recorded uncertain tax positions to an amount of USD 14.3 million related to taxable profits, which is classified as a deferred tax liability. These uncertain tax positions are classified as deferred tax since settlement is not expected within 12 months after the reporting period. An uncertain tax position amounting to USD 183.0 million was reclassified from deferred tax liabilities to current tax liabilities as settlement is expected within twelve months after the reporting period. In total, the Group recorded USD 220.0 million of current uncertain tax positions. Expected interest and penalties related to uncertain income tax liabilities have been accrued for and are included in the uncertain tax positions and in the income tax expense. In addition to the uncertain tax liability, the Group also has a contingent tax asset that currently does not meet the recognition criteria of IFRIC 23. For more information we refer to note 28. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. Sorfert reinvestment case On 29 December 2020 the Large Multinationals Directorate of the Algerian Tax Authorities (\u201cDGE\u201d) issued a letter to Sorfert in which its initial claim of DZD 7,296 million (USD 53.3 million) was maintained relating to the alleged non-compliance with the reinvestment obligations under a tax exemption as granted in 2014 by the Agency Nationale de Developpement de l\u2019Investissement (\u201cANDI\u201d). The DGE is of the opinion that Sorfert did not timely carry out the reinvestment obligations as required under ANDI exemption. As a result, the DGE required Sorfert to repay the full assumed tax benefit it enjoyed in relation herewith. On 1 February 2021, Sorfert appealed to this decision and as part of the appeal process made an initial payment of DZD 2,189 million, representing 30% of the total tax claim. On 31 October 2021, the appeal of Sorfert to the initial claim was rejected by the Internal Appeals Committee of the DGE (and the total exposure was increased with a 25% penalty) and it had to pay DZD 1,824 million (20% of the initial claim and penalties added with penalties on the amount already paid in February 2021). Although Sorfert is of the opinion that it has complied with its reinvestment\u00a0 obligations, the DGE applied a different interpretation of the reinvestment law. Since there is no detailed guidance on the interpretation, the ability to firmly assess the technical merits of this case is limited. Due to this lack of detailed guidance and negative outcome of the first appeal, management is currently of the opinion that when weighing all the current facts and circumstances and application of interpretive guidance of IFRIC 23, it has become probable that Sorfert will be required to settle the remainder of the disputed tax amount. On 24 February 2022 Sorfert pursued, supported by its external advisors, the next instance of appeal to the Central Appeals Commission as Sorfert management continues to have the view that Sorfert has satisfied the reinvestment obligations under the ANDI regime and therefore the grounds of the claim should be ruled as unfounded. As a result, the Company recorded the full impact of the reinvestment case as an income tax expense amounting to USD 65.8 million in 2021. The remaining position as per 31 December 2022 is an uncertain tax position of USD 37.3 million, included in income tax payables. Unrecognized tax assets Expiration scheme of gross unrecognized carry forward tax losses, tax credits and deductible temporary differences: 2022 $ millions Less than 1 year Between 1 and 5 years Between 5 and 10 years Between 10 and 15 years Between 15 and 20 years Unlimited Total Temporary differences 15.5 61.9 74.7 - - - 152.1 Tax losses and credit carry forwards 45.2 176.0 7.8 - - 852.6 1,081.6 Tax assets - unrecognized 60.7 237.9 82.5 - - 852.6 1,233.7 2021 $ millions Less than 1 year Between 1 and 5 years Between 5 and 10 years Between 10 and 15 years Between 15 and 20 years Unlimited Total Temporary differences 28.5 113.7 137.1 - - - 279.3 Tax losses and credit carry forwards 46.8 204.5 7.3 - - 803.5 1,062.1 Tax assets - unrecognized 75.3 318.2 144.4 - - 803.5 1,341.4 The above unrecognized temporary differences, tax losses and tax credit carry forwards relate to tax jurisdictions in which OCI has suffered a tax loss in the current or a preceding period. Significant judgment is required in determining whether deferred tax assets can be utilized. OCI determines this based on expected taxable profits arising from the reversal of recognized deferred tax liabilities and based on budget, cash flow forecasts and impairment models and the recent history of taxable results. Where utilization is not considered probable, deferred tax assets are not recognized. The above unrecognized temporary differences, tax losses and credit carry forwards mainly stem from our Dutch, Egyptian and US operations. Changes in income tax receivables and payables: $ millions 2022 2021 At 1 January (68.9) (7.5) Profit or loss (241.5) (242.5) Changes in estimates relating to prior years 2.1 0.2 Other comprehensive income 2.5 4.8 Payments 241.9 171.6 Reversal of uncertain tax positions 3.3 1.1 Reclassification from deferred tax liabilities (note 12.4) (183.0) - Effect of movement in exchange rates (2.5) 3.4 At 31 December (246.1) (68.9) Income tax receivable 5.6 3.4 Income tax payable (251.7) (72.3) Total (246.1) (68.9) ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-446": { "value": " Deferred tax expense $ millions 2022 2021 Origination and reversal of temporary differences (246.3) (60.5) Movement in uncertain tax positions 48.9 (92.7) Changes in tax rates (0.4) - Recognition of previously unrecognized tax assets 39.6 264.7 Unrecognized tax assets (14.1) (0.1) Dividend withholding tax - (6.0) Income tax benefit / (expense) reported in profit or loss (172.3) 105.4 12.4 Deferred income tax assets and liabilities Changes in deferred tax asset and liabilities (net): $ millions 2022 2021 At 1 January (406.7) (514.7) Profit or loss (172.3) 105.4 Reclassification to current income tax payable 183.0 - Effect of movement in exchange rates (recognized in equity) (8.0) 2.6 At 31 December (404.0) (406.7) Recognized deferred tax assets and liabilities: \u00a0Assets Liabilities Net $ millions 2022 2021 2022 2021 2022 2021 Intangible assets 63.8 82.9 (63.0) (62.9) 0.8 20.0 Property, plant and equipment - - (650.8) (587.1) (650.8) (587.1) Inventory 13.2 0.4 (16.8) (14.9) (3.6) (14.5) Investment in partnership - - - (75.2) - (75.2) Trade and other receivables 0.5 0.2 (0.4) (0.3) 0.1 (0.1) Loans and borrowings 47.9 31.3 6.4 (0.6) 54.3 30.7 Trade and other payables 23.4 12.9 (13.9) - 9.5 12.9 Provisions - - - (3.0) - (3.0) Uncertain tax positions - - (14.3) (148.6) (14.3) (148.6) Undistributed earnings - - (24.5) (21.7) (24.5) (21.7) Operating losses carry forward and tax credits 224.5 379.9 - - 224.5 379.9 At 31 December 373.3 507.6 (777.3) (914.3) (404.0) (406.7) Netting of fiscal positions (292.0) (299.9) 292.0 299.9 - - Amounts recognized in the Statement of Financial Position 81.3 207.7 (485.3) (614.4) (404.0) (406.7) The deferred tax asset relating to intangible assets mainly related to capitalized start-up costs for IFCo for USD 51.3 million. These costs are capitalized and amortized for tax purposes and were expensed for book purposes. Deferred tax liabilities relating to intangible assets mainly relates to goodwill of EFC for USD 62.6 million. This deferred tax liability will be reversed in case the asset is impaired. Deferred tax liabilities recognized in relation to property, plant and equipment will be realized over the depreciation period of the related asset, and mainly relate to IFCo (USD 252.8 million), Fertil (USD 232.4 million), OCIB (USD 81.2 million), EFC (USD 56.7 million) and OCIN (USD 22.8 million). The deferred tax liability for investments in partnership has been reclassed to other categories, following a change in the partnership structure for OCIB. The majority of the deferred tax liability was attributed to the property, plant and equipment category as presented in the table above. The uncertain tax position of USD 14.3 million is disclosed below. The deferred tax liability \u2018undistributed earnings\u2019 relates to income tax consequences of undistributed earnings of subsidiaries and associates that will reverse in the foreseeable future. The Company does not anticipate any other income tax consequences resulting from the undistributed earnings of subsidiaries and associates. Deferred tax assets relate to temporary differences, tax credits and tax losses carry forward. The Company has net tax losses carry forward and tax credits totalling USD 332.3 million, for which an amount of USD 184.0 million has not been recognized. The losses carry forward mainly relate to the US and Egyptian operations. Tax credits are available amounting to USD 76.2 million mainly relating to the US operations. Uncertain tax positions The group is subject to the application of complex tax laws in multiple jurisdictions. Application of these complex tax laws may lead to uncertainties in determining tax positions. We aim to resolve these uncertainties in discussions with the tax authorities. The financial effect of the existing uncertainties per balance sheet date are determined in accordance with IAS 12 and IFRIC 23, which requires us to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any uncertain tax position is judgmental. As of 31 December 2022, the Group recorded uncertain tax positions to an amount of USD 14.3 million related to taxable profits, which is classified as a deferred tax liability. These uncertain tax positions are classified as deferred tax since settlement is not expected within 12 months after the reporting period. An uncertain tax position amounting to USD 183.0 million was reclassified from deferred tax liabilities to current tax liabilities as settlement is expected within twelve months after the reporting period. In total, the Group recorded USD 220.0 million of current uncertain tax positions. Expected interest and penalties related to uncertain income tax liabilities have been accrued for and are included in the uncertain tax positions and in the income tax expense. In addition to the uncertain tax liability, the Group also has a contingent tax asset that currently does not meet the recognition criteria of IFRIC 23. For more information we refer to note 28. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. Sorfert reinvestment case On 29 December 2020 the Large Multinationals Directorate of the Algerian Tax Authorities (\u201cDGE\u201d) issued a letter to Sorfert in which its initial claim of DZD 7,296 million (USD 53.3 million) was maintained relating to the alleged non-compliance with the reinvestment obligations under a tax exemption as granted in 2014 by the Agency Nationale de Developpement de l\u2019Investissement (\u201cANDI\u201d). The DGE is of the opinion that Sorfert did not timely carry out the reinvestment obligations as required under ANDI exemption. As a result, the DGE required Sorfert to repay the full assumed tax benefit it enjoyed in relation herewith. On 1 February 2021, Sorfert appealed to this decision and as part of the appeal process made an initial payment of DZD 2,189 million, representing 30% of the total tax claim. On 31 October 2021, the appeal of Sorfert to the initial claim was rejected by the Internal Appeals Committee of the DGE (and the total exposure was increased with a 25% penalty) and it had to pay DZD 1,824 million (20% of the initial claim and penalties added with penalties on the amount already paid in February 2021). Although Sorfert is of the opinion that it has complied with its reinvestment\u00a0 obligations, the DGE applied a different interpretation of the reinvestment law. Since there is no detailed guidance on the interpretation, the ability to firmly assess the technical merits of this case is limited. Due to this lack of detailed guidance and negative outcome of the first appeal, management is currently of the opinion that when weighing all the current facts and circumstances and application of interpretive guidance of IFRIC 23, it has become probable that Sorfert will be required to settle the remainder of the disputed tax amount. On 24 February 2022 Sorfert pursued, supported by its external advisors, the next instance of appeal to the Central Appeals Commission as Sorfert management continues to have the view that Sorfert has satisfied the reinvestment obligations under the ANDI regime and therefore the grounds of the claim should be ruled as unfounded. As a result, the Company recorded the full impact of the reinvestment case as an income tax expense amounting to USD 65.8 million in 2021. The remaining position as per 31 December 2022 is an uncertain tax position of USD 37.3 million, included in income tax payables. Unrecognized tax assets Expiration scheme of gross unrecognized carry forward tax losses, tax credits and deductible temporary differences: 2022 $ millions Less than 1 year Between 1 and 5 years Between 5 and 10 years Between 10 and 15 years Between 15 and 20 years Unlimited Total Temporary differences 15.5 61.9 74.7 - - - 152.1 Tax losses and credit carry forwards 45.2 176.0 7.8 - - 852.6 1,081.6 Tax assets - unrecognized 60.7 237.9 82.5 - - 852.6 1,233.7 2021 $ millions Less than 1 year Between 1 and 5 years Between 5 and 10 years Between 10 and 15 years Between 15 and 20 years Unlimited Total Temporary differences 28.5 113.7 137.1 - - - 279.3 Tax losses and credit carry forwards 46.8 204.5 7.3 - - 803.5 1,062.1 Tax assets - unrecognized 75.3 318.2 144.4 - - 803.5 1,341.4 The above unrecognized temporary differences, tax losses and tax credit carry forwards relate to tax jurisdictions in which OCI has suffered a tax loss in the current or a preceding period. Significant judgment is required in determining whether deferred tax assets can be utilized. OCI determines this based on expected taxable profits arising from the reversal of recognized deferred tax liabilities and based on budget, cash flow forecasts and impairment models and the recent history of taxable results. Where utilization is not considered probable, deferred tax assets are not recognized. The above unrecognized temporary differences, tax losses and credit carry forwards mainly stem from our Dutch, Egyptian and US operations. Changes in income tax receivables and payables: $ millions 2022 2021 At 1 January (68.9) (7.5) Profit or loss (241.5) (242.5) Changes in estimates relating to prior years 2.1 0.2 Other comprehensive income 2.5 4.8 Payments 241.9 171.6 Reversal of uncertain tax positions 3.3 1.1 Reclassification from deferred tax liabilities (note 12.4) (183.0) - Effect of movement in exchange rates (2.5) 3.4 At 31 December (246.1) (68.9) Income tax receivable 5.6 3.4 Income tax payable (251.7) (72.3) Total (246.1) (68.9) ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-448": { "value": " 13 Inventories $ millions 2022 2021 Finished goods 280.6 185.2 Raw materials and consumables 25.3 21.3 Spare parts, fuels and others 115.5 137.0 Total 421.4 343.5 During 2022, the total write-downs amount to USD 22.8 million (2021: USD 19.2 million) of which USD 15.1 million (2021: USD 17.6 million) relates to spare parts. During 2022 there were no reversals of write downs (2021: nil). As a result of the IFCo refinancing in 2022, no inventory has been pledged as security for external loans of IFCo 2021: USD 36.7 million). Reference is made to note 18. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-449": { "value": " 14 Cash and cash equivalents $ millions 2022 2021 Cash on hand 0.1 0.2 Bank balances 1,692.1 1,439.3 Restricted cash 24.8 140.8 Total 1,717.0 1,580.3 Restricted cash Restricted cash in 2022 decreased as result of the refinancing at IFCo. In 2021, restricted cash of USD 128.4 million (2022: nil) was held as part of IFCo\u2019s debt service requirements for the outstanding bonds, of which USD 43.4 million was held as a required deposit in a major maintenance reserve account and is to be used to fund capital expenditure, and USD 80.0 million was held as required deposit in a project operating reserve account which is to be used to fund operating expenses in three month increments. The remaining restricted balances are held as collateral against letters of credit and letters of guarantees issued. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-450": { "value": " Restricted cash Restricted cash in 2022 decreased as result of the refinancing at IFCo. In 2021, restricted cash of USD 128.4 million (2022: nil) was held as part of IFCo\u2019s debt service requirements for the outstanding bonds, of which USD 43.4 million was held as a required deposit in a major maintenance reserve account and is to be used to fund capital expenditure, and USD 80.0 million was held as required deposit in a project operating reserve account which is to be used to fund operating expenses in three month increments. The remaining restricted balances are held as collateral against letters of credit and letters of guarantees issued. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-451": { "value": " 15 Equity attributable to owners of the Company The movements in the number of shares can be summarized as follows: \u00a02022 2021 Number of shares at 1 January 210,306,101 210,306,101 Number of issued shares 405,903 - On issue at 31 December - fully paid 210,712,004 210,306,101 Par value per share (in EUR) 0.02 0.02 At 31 December (in millions of USD) 5.6 5.6 The authorized capital of the Company amounts to EUR 12.0 million. The authorized capital is divided into 600 million shares, with a nominal value of EUR 0.02 each. Movements in equity attributable to owners of the Company in 2022: The share capital movements relate to the increase and subsequent decrease in the nominal value of the ordinary shares, to facilitate a capital repayment in relation to the distribution. The distribution to shareholders that elected to receive a capital repayment (USD 1,069.1 million) was debited from share capital. The remaining distribution of USD 14.4 million was debited to retained earnings as a dividend distribution to owners of the Company. The sale of shares in the OCI Methanol Group resulted in an increase in retained earnings of USD 221.4 million and an increase in non-controlling interests of USD 7.8 million. Reference is made to note OCI Methanol Group. An amount of USD 9.2 million related to share-based compensation expense was recognized in retained earnings. Movements in equity attributable to owners of the Company in 2021: The acquisition of additional shares in EBIC resulted in an increase in retained earnings of USD 6.0 million and a decrease in non-controlling interests of USD 44.4 million. Reference is made to note 17. The IPO of Fertiglobe resulted in an increase in retained earnings of USD 332.7 million and an increase in non-controlling interests of USD 141.0 million. Reference is made to note 17. An amount of USD 8.5 million related to share-based compensation expense was recognized in retained earnings. ", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-452": { "value": " 16 Reserves $ millions Hedge reserve Financial assets at fair value through other comprehensive income Currency translation Treasury shares Total At 1 January 2021 5.7 (7.0) (322.4) (14.7) (338.4) Movement in hedge reserve (16.9) - - - (16.9) Currency translation differences - - (21.7) - (21.7) Financial assets at fair value through other comprehensive income - (10.8) - - (10.8) Other comprehensive income (16.9) (10.8) (21.7) - (49.4) Treasury shares sold / delivered - - - 4.8 4.8 Treasury shares acquired - - - (1.0) (1.0) At 31 December 2021 (11.2) (17.8) (344.1) (10.9) (384.0) Movement in hedge reserve 19.4 - - - 19.4 Currency translation differences - - (78.0) 0.8 (77.2) Financial assets at fair value through other comprehensive income - - - - - Other comprehensive income 19.4 - (78.0) 0.8 (57.8) Treasury shares sold / delivered - - - 15.6 15.6 Treasury shares acquired - - - (2.0) (2.0) Issuing shares - - - (14.5) (14.5) At 31 December 2022 8.2 (17.8) (422.1) (11.0) (442.7) OCI is a company incorporated under Dutch law. In accordance with the Dutch Civil Code, legal reserves have to be established in certain circumstances. The hedging reserve, the financial assets at fair value through other comprehensive income reserve, the currency translation reserve and other legal reserves are legal reserves that limit distributions to shareholders to the extent that these reserves individually have a credit balance. Treasury shares During the financial year ended 31 December 2022 the company acquired 54,935 shares (2021: 40,583) and sold and delivered out of share-based payment plans 155,586 shares (2021: 195,512). \u00a02022 2021 Number of shares 306,346 406,997 Average carrying value per share (USD) 35.95 23.43 Total (in millions USD) 11.0 9.5 Foreign exchange effect - 1.4 Total carrying value of treasury shares (in millions of USD) 11.0 10.9 ", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-453": { "value": " Treasury shares During the financial year ended 31 December 2022 the company acquired 54,935 shares (2021: 40,583) and sold and delivered out of share-based payment plans 155,586 shares (2021: 195,512). \u00a02022 2021 Number of shares 306,346 406,997 Average carrying value per share (USD) 35.95 23.43 Total (in millions USD) 11.0 9.5 Foreign exchange effect - 1.4 Total carrying value of treasury shares (in millions of USD) 11.0 10.9 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-454": { "value": " 17 Non-controlling interests The non-controlling interests in the respective entities can be summarized as follows: 2022 $ millions Fertil EFC EBIC Sorfert OCI Methanol Group Other1 Total Non-controlling interests 50.00% 50.06% 62.50% 74.51% 15.00% - - Non-current assets 808.7 818.8 174.6 670.9 169.2 1,028.3 3,670.5 Current assets 141.6 209.8 66.3 827.4 189.8 1,935.2 3,370.1 Non-current liabilities (149.1) (60.1) (4.2) (143.1) (94.3) (1,891.9) (2,342.7) Current liabilities (56.3) (145.9) (37.2) (125.9) (305.7) (2,010.9) (2,681.9) Net assets 744.9 822.6 199.5 1,229.3 (41.0) (939.3) 2,016.0 Revenues 593.5 439.4 326.9 973.5 239.7 3,502.1 6,075.1 Profit 249.9 153.0 155.2 617.6 15.3 (2.1) 1,188.9 Other comprehensive income - - - 46.7 1.4 - 48.1 Total comprehensive income 249.9 153.0 155.2 664.3 16.7 (2.1) 1,237.0 Dividend cash flows - - (87.4) (374.8) (105.0) (545.0) (1,112.2) Other consists of N-7 and all remaining Fertiglobe entities. 2021 $ millions Fertil1 EFC1 EBIC1 Sorfert1 Other2 Total Non-controlling interests 50.00% 50.06% 62.50% 74.51% - - Non-current assets 843.8 820.0 176.2 516.7 19.9 2,376.6 Current assets 213.9 75.1 122.5 451.4 2,124.0 2,986.9 Non-current liabilities (159.9) (128.4) (4.4) (193.7) (981.0) (1,467.4) Current liabilities (112.8) (97.2) (40.9) (60.0) (2,076.0) (2,386.9) Net assets 785.0 669.5 253.4 714.4 (913.1) 1,509.2 Revenues 466.3 307.3 195.9 614.6 1,916.0 3,500.1 Profit 151.6 83.9 84.4 280.4 (12.0) 588.3 Other comprehensive income - - - (33.0) 0.7 (32.3) Total comprehensive income 151.6 83.9 84.4 247.4 (11.3) 556.0 Dividend cash flows - - (3.9) (189.5) (606.3) (799.7) Non-controlling interests in all Fertiglobe entities increased due to the sale of shares by OCI as part of the Fertiglobe IPO. OCI has sold 8% of the total shares in Fertiglobe plc. Other consists of N-7 and all remaining Fertiglobe entities. Movements in equity attributable to non-controlling interests: The sale of shares in the OCI Methanol Group resulted in an increase in non-controlling interests of USD 7.8 million. Total dividends declared to non-controlling interests amounted to USD 1,056.4 million (2021: USD 788.1 million). Impact difference in profit sharing non-controlling interests: In the partnership agreement of Sorfert between OCI and the partner, a profit-sharing arrangement is agreed, where the other investor will receive a relatively higher portion of dividends in compensation for lower natural gas prices arranged for by the partner, which is recognized in cost of sales. As a result of this agreement the non-controlling interests increased by USD 318.4 million (2021: USD 104.6 million). The effect of the profit sharing agreement represents the gross amount allocated to the partner. This amount is subsequently diluted by other non-controlling interests in Fertiglobe. In 2021, the Fertiglobe IPO resulted in an increase in non-controlling interests of USD 141.0 million. In 2021, the acquisition of additional shares in EBIC resulted in a decrease in non-controlling interests of USD 44.4 million. OCI Methanol Group On 18 February 2022, a 15% stake of the OCI Methanol Group was sold for a total consideration of USD 375.0\u00a0million. As a result of this transaction OCI's share in the OCI Methanol Group decreased from 100% to 85%. The following table summarises the effect of the transaction on the Company's equity attributable to owners of the Company: $ millions \u00a0Proceeds from sale of shares 375.0 Fees related to the sale of shares (1.3) Fair value of earn-out consideration (17.1) Net proceeds from the sale of shares 356.6 Non-controlling interests 135.2 Effect on equity attributable to owners of the Company 221.4 Acquisition of additional shares in EBIC In August 2021, Fertiglobe acquired an additional 25% stake in OCI MEPCO Cayman Limited from KBR. As a result of this transaction OCI's share in Egypt Basic Industries Corporation (EBIC) increased from 34.8% to 43.5% (prior to the Fertiglobe IPO). The consideration of USD 43.0 million includes a transfer of KBR's receivable related to unpaid dividends of USD 4.6 million, resulting in a net consideration of USD 38.4 million. The following table summarises the effect of the transaction on the Company's equity attributable to shareholders: $ millions \u00a0Carrying amount of non-controlling interests acquired 44.4 Consideration paid to non-controlling interests in cash (38.4) Effect on equity attributable to owners of the Company 6.0 Fertiglobe IPO On 27 October 2021, Fertiglobe listed on the Abu Dhabi Securities Exchange (\"ADX\") under the ticker \u201cFERTIGLB\u201d and the International Securities Identification Numbering (Isin) code \u201cAEF000901015\u201d. OCI sold 8% of the total shares in Fertiglobe, in total 13.8% of the Fertiglobe\u2019s share capital was listed. Following the IPO, OCI\u2019s shareholding percentage in Fertiglobe is 50% plus one share (and OCI retains control over Fertiglobe). OCI\u2019s proceeds from the sale of its shares amount to USD 461.1 million and fees related to Fertiglobe IPO amount to USD 14.1 million, resulting in net proceeds of USD 447.0 million. As part of the equity offering indemnifications were agreed between shareholders. In 2021, this resulted in a change of the indemnifications previously recorded as part of the Fertiglobe PPA. Reference is made to note 21. The following table summarises the effect of the transaction on the Company's equity attributable to shareholders: $ millions \u00a0Proceeds from sale of shares 461.1 Fees related to the sale of shares (14.1) Net proceeds from the sale of shares 447.0 Indemnities 26.7 Effect on total equity 473.7 Non-controlling interests 141.0 Effect on equity attributable to owners of the Company 332.7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-455": { "value": " 18 Loans and borrowings $ millions 2022 2021 At 1 January 3,800.8 4,416.6 Proceeds from loans 1,073.0 2,248.3 Repayment / proceeds from bank overdraft facility (354.8) 398.4 Repayment and redemption of loans and borrowings (1,587.8) (3,186.1) Newly incurred transaction costs / (bond) premiums (2.5) (10.0) Amortization of transaction costs / (bond) premiums 28.1 39.3 Effect of movement in exchange rates (81.1) (105.7) At 31 December 2,875.7 3,800.8 Non-current 2,572.3 3,290.2 Current 303.4 510.6 Total 2,875.7 3,800.8 The effect of movement in exchange rate mainly relates to EUR and DZD denominated loans, which are different from the Group\u2019s presentation currency. Information about the Group\u2019s exposure to interest rate, foreign currency and liquidity risk is disclosed in the financial risk and capital management paragraph in note 6. Borrowing company Type of loan Principal amount ($ millions) Interest rate Date of maturity Carrying amount ($ millions)1 Long-term portion ($ millions) Short-term portion ($ millions) Fair value ($ millions) Collateral / guarantee Sorfert Secured loan facility USD 961.3 (DZD 114,440.0) Algerian bank interest rate plus rate of 1.95% June 2026 231.9 165.6 66.3 N/a 2 IFCo Unsecured senior notes USD 150.0 Fixed 4.00% December 2032 148.1 148.1 - 143.7 3 \u00a0\u00a0USD 344.4 Fixed 5.00% December 2042 349.6 349.6 - 323.6 \u00a0\u00a0\u00a0USD 344.4 Fixed 5.00% December 2050 345.4 345.4 - 322.7 \u00a0Fertiglobe plc Unsecured loan facility USD 1,100.0 LIBOR + 1.05% February 2023 (extendable) 900.0 900.0 - 900.0 4 \u00a0\u00a0USD 300.0 SOFR +1.50% January 2026 - - - - \u00a0\u00a0\u00a0USD 600.0 SOFR +1.75% January 2028 - - - - \u00a0Fertiglobe plc Unsecured loan facility USD 600.0 SOFR +1.4% December 2027 - - - - N/a OCI N.V. Unsecured senior notes USD 324.0 Fixed 4.625% October 2025 285.8 285.8 - 273.9 5 \u00a0\u00a0EUR 360.0 (USD 385.6) Fixed 3.625% October 2025 384.0 384.0 - 380.9 \u00a0OCI N.V. Unsecured loan facility USD 1,100.0 Libor + 0.85% April 2027 (6.2) (6.2) - - 6 OCIN Inventory financing USD 213.7 (EUR 199.6) EURIBOR +0.85% No defined maturity 213.8 - 213.8 213.8 7 FD, FFT Trade finance facility USD 95.0 SOFR + 1.00% Renewed annually 23.3 - 23.3 23.3 N/a FD, FFT, Fertil Working capital facility USD 50.0 LIBOR/EIBOR/SOFR + 1.50% April 2023 (extendable) - - - - 8 Total 31 December 2022 \u00a0\u00a0\u00a0\u00a02,875.7 2,572.3 303.4 N/a \u00a0 As at 31 December 2022 the carrying amount of loans and borrowings excludes interest of USD 12.6 million. Debt service reserve account, ban for any disposal or decrease of the Company share and assets. The Notes are guaranteed, jointly and severally, by IFCo and OCI N.V. The loan is guaranteed, jointly and severally, by Fertiglobe plc, EFC, Fertil, FFT, FD and OFTS. The Notes are guaranteed, jointly and severally, by BioMCN, BioMCN Holding II B.V., OCIN, OCI Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International B.V., OCI Intermediate B.V., OCI Chem 4 B.V., OCI Partners LP and OCI Beaumont LLC. Guaranteed, jointly and severally, by OCI Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International B.V. and OCI Intermediate B.V. Guaranteed, jointly and severally, by OCIN and OCI N.V. Guaranteed, jointly and severally, by FD, Fertil and FFT. Borrowing company Type of loan Principal amount ($ millions) Interest rate Date of maturity Carrying amount ($ millions)1 Long-term portion ($ millions) Short-term portion ($ millions) Fair value ($ millions) Collateral / guarantee Sorfert Secured loan facility USD 961.3 (DZD 114,440.0) Algerian bank interest rate plus rate of 1.95% June 2026 294.0 228.6 65.4 N/a 2 IFCo Secured senior notes USD 429.0 Fixed 5.25% December 2025 427.0 427.0 - 559.0 3 \u00a0\u00a0USD 425.4 Fixed 5.25% December 2050 413.0 413.0 - 423.5 \u00a0Fertiglobe plc Secured loan facility USD 1,100.0 LIBOR + 1.05% February 2023 (extendable) 1,091.8 1,097.6 (5.8) 1,100.0 4 Fertiglobe plc Secured loan facility USD 300.0 LIBOR + 1.75% August 2026 - - - - N/a OCI N.V. Secured senior notes USD 324.0 Fixed 4.625% October 2025 321.3 321.3 - 336.6 5 \u00a0\u00a0EUR 360.0 (USD 409.3) Fixed 3.625% October 2025 405.7 405.7 - 423.4 \u00a0OCI N.V. Secured loan facility USD 850.0 LIBOR + 1.50% April 2023 397.0 397.0 - 397.0 6 OCI N.V. Bank overdraft N/a N/a No defined maturity date 383.0 - 383.0 N/a N/a OCIN Inventory financing USD 70.2 (EUR 57.4) 1.25% No defined maturity, facility is uncommitted with monthly roll overs 68.0 - 68.0 68.0 7 Total 31 December 2021 \u00a0\u00a0\u00a0\u00a03,800.8 3,290.2 510.6 N/a \u00a0 As at 31 December 2021 the carrying amount of loans and borrowings excludes interest of USD 10.9 million. Debt service reserve account, ban for any disposal or decrease of the Company share and assets. Certain bank accounts, property of IFCo, inventories, all funds, including equity contributions of USD 1,555.4 million by OCI. The loan is guaranteed, jointly and severally, by Fertiglobe plc, EFC, Fertil, FFT (previously OCI Fertilizer Trading Ltd), FD and OFTS. The Notes are guaranteed, jointly and severally, by BioMCN, BioMCN Holding II B.V., OCIN, OCI Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International B.V., OCI Intermediate B.V., OCI Chem 4 B.V., OCI Partners LP and OCI Beaumont LLC. Guaranteed, jointly and severally, by BioMCN, BioMCN Holding II B.V., OCI Chemicals B.V., OCI Fertilizers B.V., OCI Fertilizer International B.V. and OCI Intermediate B.V. Stand by letter of credit of EUR 6.0 million (USD 6.8 million) and OCI N.V. guarantee of EUR 60 million (USD 68.2 million). Covenants Certain loan agreements include financial covenants. The definitions for calculating the financial covenants applicable to the facilities within the Group can be summarized as follows: Debt Service Coverage Ratio: Income Available (revenue earned less operating expenses) to Debt Service (net finance charges including the capital element of finance leases) or gross profit less change in working capital to interest and principal payments. Debt to Equity Ratio: Gross Debt (current and long-term debt obligations) to total Equity (the sole capital of the borrower). Net Leverage Ratio: the Group\u2019s Net Debt (meaning the aggregate amount of all obligations of the Group, excluding intergroup loans and cash and cash equivalents, but including finance leases) to adjusted EBITDA. Interest Coverage Ratio: EBITDA, EBIT or Distribution Receipts (cash received by the borrower by way of dividends or repayments of loans) to Finance Charges (meaning finance payments in respect of borrowings including the interest element of finance leases). As per 31 December 2022 all financial covenants were met. In the event the respective borrowing companies would not comply with the covenant requirements, in total an amount of USD 1,132.1 million (2021: USD 2,648.6 million) of the loans would become immediately due. Refer to note 6.2 for additional discussion of the Company\u2019s liquidity risk. The external borrowings include change in control clauses that enable the lenders to call the financing provided. Fair value measurement loans and borrowings Except for the IFCo bonds, the senior secured notes of OCI N.V. and the loan of Sorfert, the fair value of all other loans and facilities is calculated within hierarchy category level 2. The bonds of IFCo and OCI N.V. are measured following hierarchy category 1. The fair value of the loan of Sorfert cannot be determined as no observable market data is available. New and amended financing arrangements in 2022 Reference is made to note 6.2.2 Refinancing activity. Proceeds from borrowings Proceeds from borrowings in 2022 totaled an amount of USD 1,073.0 million (2021: USD 2,248.3) million, which consisted of net proceeds of the IFCo bonds, changes in OCIN's inventory financing and proceeds of the trade finance facility of FD and FFT. Redemptions Redemptions of borrowings in 2022 totaled an amount of USD 1,587.8 million (2021: USD 3,186.1 million), which consisted of the partial repayment of the USD bond at OCI N.V., full repayment of the IFCo bonds, partial repayment of the Fertiglobe bridge loan, regular installments for borrowings and changes in the outstanding amounts of the revolving credit and trade finance facilities within the Group. Undrawn bank facilities As of 31 December 2022, the Group had not drawn external bank facilities in the amount of USD 1,750.0 million (2021: USD 800.0 million). This relates to an external bank facility at OCI N.V. of USD 1,100.0 million, Fertiglobe revolving credit facility of USD 600.0 million and a working capital facility of USD 50.0 million. The Fertiglobe term loan of USD 900.0 million, which is undrawn at 31 December 2022, will replace the Fertiglobe bridge loan in January 2023. Bank overdraft As of 31 December 2022, the bank overdraft facility of OCI N.V. amounts to zero (2021: USD 383.0 million). Reference is made to note 6.4. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-456": { "value": " 19 Lease obligations The Group leases a number of office spaces, warehouses, land, employee accommodation, computers, machinery and vehicles. Lease terms vary from 1 year to indefinite renewal options. Calculations of the lease obligation for leases with indefinite renewal options are done using a lease term based on the expected renewal periods and can be more than 100 years. $ millions Non-current lease obligations Current lease obligations Total At 1 January 2021 248.6 43.6 292.2 Movements in carrying amount: \u00a0\u00a0\u00a0Payments - (47.3) (47.3) Accretion of interest 8.1 0.4 8.5 Additions 30.5 2.3 32.8 Disposals (4.8) - (4.8) Transfers (40.6) 40.6 - Modifications 3.3 1.0 4.3 Effect of movement in exchange rates (7.6) (0.9) (8.5) At 31 December 2021 237.5 39.7 277.2 Movements in carrying amount: \u00a0\u00a0\u00a0Payments - (47.4) (47.4) Accretion of interest 7.6 0.6 8.2 Additions 33.2 9.8 43.0 Disposals (0.4) 0.1 (0.3) Transfers (46.7) 46.7 - Modifications 3.3 - 3.3 Effect of movement in exchange rates (7.0) (0.9) (7.9) At 31 December 2022 227.5 48.6 276.1 ", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-457": { "value": " 20 Trade and other payables $ millions Note 2022 2021 Trade payables \u00a0273.7 425.3 Trade payables due to related parties (30) 142.4 87.9 Amounts payable under the securitization agreement \u00a0177.4 149.7 Accrued dividend to non-controlling interests \u00a0102.8 4.1 Other payables \u00a077.8 66.9 EUA liabilities (6.3) 36.7 116.2 Employee benefit liabilities \u00a014.1 14.5 Accrued expenses \u00a0345.9 264.9 Accrued interest \u00a012.6 10.9 Customer advance payment / deferred revenue \u00a069.1 222.7 Other tax payable \u00a04.5 5.3 Derivative financial instruments \u00a0141.4 12.8 Total \u00a01,398.4 1,381.2 Non-current \u00a0114.1 23.7 Current \u00a01,284.3 1,357.5 Total \u00a01,398.4 1,381.2 Information about the Group\u2019s exposure to currency and liquidity risk is included in note 6. The carrying amount of \u2018Trade and other payables\u2019 approximates its fair value. Derivative financial instruments Derivative financial instruments consist of commodity gas hedges contracts in order to hedge future gas price levels. The fair value of these contracts amounts to USD 141.4 million as per 31 December 2022 (2021: USD 12.8 million). All derivatives included in trade and other payables are classified in the fair value hierarchy level 2. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-458": { "value": " Derivative financial instruments Derivative financial instruments consist of commodity gas hedges contracts in order to hedge future gas price levels. The fair value of these contracts amounts to USD 141.4 million as per 31 December 2022 (2021: USD 12.8 million). All derivatives included in trade and other payables are classified in the fair value hierarchy level 2. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-459": { "value": " 21 Provisions $ millions Claims and other provisions, onerous contracts Donation provision Total At 1 January 2022 36.4 121.1 157.5 Recorded during the year 51.2 - 51.2 Used during the year (9.1) - (9.1) Reversed (9.9) - (9.9) Effect of the movement in exchange rates (1.3) (44.2) (45.5) At 31 December 2022 67.3 76.9 144.2 Non-current 13.9 - 13.9 Current 53.4 76.9 130.3 Total 67.3 76.9 144.2 Provision for indemnifications As a consequence of the Fertiglobe IPO, all other shareholders of Fertiglobe plc will be indemnified for the outcome of certain legacy legal exposures. An indemnification asset of USD 28.2 million (2021: USD 26.7 million) was recognized in other receivables as the offsetting criteria are not met. Reference is made to note 17. Claims and other provisions The Group is involved in various litigations, arbitrations and commercial disputes. In cases where it is probable that the outcome of the legal proceedings and commercial disputes will be unfavorable, and the financial outcome can be measured reliably, a provision has been recognized. Reference is made to note 28 for detailed information with respect to major ongoing litigations and claims for which no provision has been recognized. Egypt training fund Articles 133 and 134 of the Egyptian Labor Law No. 12 of 2003 requires all businesses in Egypt with more than 10 employees to contribute 1% of their net profit into a National Training Fund (\u2018Fund\u2019). No application guidance was issued and its constitutionality was being challenged on multiple grounds including duplication of financial burden and contradiction to advantages under other laws. As such, this Law was not applied in general by businesses in the region. Following a supreme court ruling which found the article to be constitutional in March 2022, the General Secretary of the National Training Fund issued a circular on 18 May 2022 which re-triggered the obligation on employers to pay such contribution of 1% of their annual net profit to the Fund in accordance with Article 134 of the Egyptian Labor Law. External legal counsel assisted in analysing the key aspects in preparing a best estimate for such contribution. Key assumptions included i) the treatment of such contribution as tax, fee or other, ii) the statute of limitation and iii) how to consider forex translation. Other considerations included the applications for tax free zone entities (relevant for EBIC) and potential waiver or reduction as result of an internal training program (EFC) and impact of interest and penalties. The maximum exposure is estimated to be around USD 167.0 million. When taking a statute of limitation of five years into consideration the maximum exposure is limited to USD 31.9 million (excluding interest or penalties). Based on the most likely scenario according to external legal counsel, OCI has recognized a total provision of USD 17.7 million (USD 14.5 million for OCI SAE, USD 3.2 million for EFC and none for EBIC) considering the treatment as a fee, a statute of limitations of five years and translation at the respective year exchange rate. Considering the current limited application guidance and as this is impacting majority of business in Egypt, there is an expectation that further application guidance will be issued by the regulator in due course. Donation provision On 13 November 2014, the Company announced that it had decided to transfer the rights to the amounts receivable from the first installment already paid to the Egyptian Tax Authority in 2013 of EGP 2,500 million (approximately USD 360.0 million at the 2014 exchange rate) to a Egyptian development fund (reference is made to note 28 for the claim in relation to the OCI S.A.E. tax dispute). No formal agreement has been drafted with the fund yet and no payments have been made to the fund. The transfer of rights has been approved by OCI\u2019s Board of Directors on 12 November 2014. Following the guidance under IAS 37 (constructive obligations), the Company has presented the transfer of rights to the fund as a donation provision. In March 2015, the Company received a cheque of EGP 1,904 million (approximately USD 266.2 million at the 2015 exchange rate) from the Egyptian Authorities. At year end 2022 the carrying amount in US dollars had been reduced to USD 76.9 million, due to the devaluation of the EGP since March 2015. ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-460": { "value": "$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Raw materials and consumables and finished goods | \u00a0 | 5,351.0 | 3,203.5 |
Maintenance and repair | \u00a0 | 163.0 | 150.2 |
Employee benefit expenses | (22.2) | 454.6 | 408.9 |
Depreciation, amortization and impairment | 599.9 | 891.6 | |
Consultancy expenses | \u00a0 | 43.2 | 34.0 |
Other | \u00a0 | 126.2 | 67.9 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
Cost of sales | \u00a0 | 6,365.4 | 4,489.7 |
Selling, general and administrative expenses | \u00a0 | 372.5 | 266.4 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
A gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs.
In February 2021, the extreme cold weather and spike in gas prices in the US resulted in temporary downtime at IFCo. Due to this downtime IFCo sold back its forward purchased gas to its supplier, which resulted in a gain from the resale of gas of USD 61.0 million. This figure does not include and is partly offset by the lost margin due to the lower production volumes and additional expenses associated with the downtime. The gain on the resale of gas is recorded as part of raw materials and consumables and finished goods.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Wages and salaries | \u00a0 | 293.8 | 263.0 |
Social securities | \u00a0 | 9.3 | 8.2 |
Employee incentive plans | \u00a0 | 54.5 | 51.2 |
Pension cost | \u00a0 | 26.7 | 24.3 |
Share-based compensation expenses | (22.3) | 9.2 | 8.5 |
Other employee expenses | \u00a0 | 61.1 | 53.7 |
Total | \u00a0 | 454.6 | 408.9 |
During the financial year ended 31 December 2022, the number of key executives was 4 (2021: 4 key executives), which represents the Executive Board members; Nassef Sawiris (Executive Chair), Hassan Badrawi (Chief Financial Officer) Maud de Vries (Chief Legal and Human Capital Officer) and Ahmed El-Hoshy (Chief Executive Officer). During the financial year ended 31 December 2022, the number of staff employed in the Group amounted to 4,059 employees (2021: 3,853 employees).
OCI has currently award agreements outstanding under four different share-based compensation plans. In 2022 share based compensation Awards were granted under the Performance Share Unit Plan for Executive Directors, the One Off Share Awards, the Restricted Stock Unit Plan and the Employee Performance Share Unit Plan.
In 2019, a Performance Share Unit plan was introduced for the Executive Board as replacement for the performance share plan. The Performance Share Unit plan comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts. Up to 2021, Total Shareholder Return (\u2018TSR\u2019) was the only performance measure. In 2021, the plan was amended and new performance measures were added. For each Award, starting with the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market.
Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the members of the Executive Board for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Performance Share Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 170,650 | 230,612 | 316,729 | 230,558 |
Fair value at grant date (EUR) | 4,075,463 | 4,065,690 | 4,336,020 | 4,486,659 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 | 13.69 | 19.46 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% | -0.660% | -0.659% |
Expected share price volatility | 44.3% | 44.2% | 34.5% | 34.7% |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 230,612 | 316,729 | 230,558 |
Vested in 2022 | - | - | - | - |
Expired in 2022 | - | - | - | (230,558) |
Dividend equivalent shares1 | 23,263 | 31,436 | 43,179 | - |
Outstanding 31 December 2022 | 193,913 | 262,048 | 359,908 | - |
To reward the exceptional performance of the Executive Directors in 2021, One Off Share Awards were granted to the CEO, CFO and CLHCO. The One Off Share Awards granted on May 25th, 2022 comprise of conditional stock units which each cover the value of one fully paid OCI share. For the purpose of this exceptional One Off Share Award, vesting of the conditional stock units shall not be subject to forward-looking performance conditions. Apart from this, the terms and conditions of the One Off Share Awards are in line with the terms and conditions as set out in the Executive Performance Stock Unit Plan 2019. The One Off Share Awards concern a grant of conditional stock units that will generally vest, subject to the Executive Directors\u2019 continued engagement as an Executive Director of the Company on the date which is the third anniversary of the Date of Grant, with Shares (to the extent applicable, net of tax or following sell-to-cover) being subject to a two-year holding period, in line with the Dutch Corporate Governance Code. The fair value of the One Off Share Awards is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of One Off Share Awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
One Off Share Award | 2022 Grant |
|---|---|
Conditional shares granted | 49,519 |
Fair value at grant date (EUR) | 1,736,136 |
Fair value at grant date (EUR per share) | 35.06 |
Vesting period at issuance (years) | 3 |
Dividend yield | 0.0% |
Outstanding 31 December 2021 | - |
Dividend equivalent shares1 | 6,749 |
Outstanding 31 December 2022 | 56,268 |
For the level below the Board, a Restricted Stock Units Plan was implemented to replace the Bonus Matching Plan. First award granted under this plan was made in 2019. Executive Directors are not eligible for RSU grants. The Restricted Stock Units Plan comprises the conditional granting of shares in OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan will be paid out partly in cash in accordance with the short-term incentive plan and partly in awards in accordance with this RSU plan. Shares will vest for one third of the restricted stock units comprising the award at the second anniversary of the date of grant and for two thirds of the restricted stock units comprising the award on the third anniversary of the date of grant subject to still being employed by OCI. The RSU entitles the participants to dividend equivalents.
The fair value of the RSUs awarded is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of RSU share awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
Restricted Stock Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 251,415 | 132,666 | 89,900 | 206,253 |
Fair value at grant date (EUR) | 7,130,129 | 2,409,215 | 945,748 | 5,455,392 |
Fair value at grant date (EUR per share) | 28.36 | 18.16 | 10.52 | 26.45 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 125,157 | 79,027 | 120,615 |
Forfeited in 2022 | - | (9,869) | (2,729) | (1,931) |
Vested in 2022 | - | (1,748) | (35,122) | (118,684) |
Initial awards (new joiners) | - | 13,652 | 10,925 | - |
Dividend equivalent shares1 | 33,426 | 16,797 | 7,728 | - |
Outstanding 31 December 2022 | 284,841 | 143,989 | 59,829 | - |
In 2021, the Employee Performance Share Units Plan was introduced for key Employees. The Employee Performance Share Units Plan is similar to the Executive Director Performance Share Units Plan. For the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market. Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the employees for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Employee Performance Share Units Plan | 2022 Grant | 2021 Grant |
|---|---|---|
Conditional shares granted | 12,234 | 14,006 |
Fair value at grant date (EUR) | 292,172 | 246,926 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 |
Vesting period at issuance (years) | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% |
Expected share price volatility | 44.3% | 44.2% |
Dividend yield | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 14,006 |
Vested in 2022 | - | - |
Dividend equivalent shares1 | 1,666 | 1,909 |
Outstanding 31 December 2022 | 13,900 | 15,915 |
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Raw materials and consumables and finished goods | \u00a0 | 5,351.0 | 3,203.5 |
Maintenance and repair | \u00a0 | 163.0 | 150.2 |
Employee benefit expenses | (22.2) | 454.6 | 408.9 |
Depreciation, amortization and impairment | 599.9 | 891.6 | |
Consultancy expenses | \u00a0 | 43.2 | 34.0 |
Other | \u00a0 | 126.2 | 67.9 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
Cost of sales | \u00a0 | 6,365.4 | 4,489.7 |
Selling, general and administrative expenses | \u00a0 | 372.5 | 266.4 |
Total | \u00a0 | 6,737.9 | 4,756.1 |
A gross amount of USD 132.2 million (2021: USD 133.8 million) was recognized in cost of sales related to the sale of excess EUAs.
In February 2021, the extreme cold weather and spike in gas prices in the US resulted in temporary downtime at IFCo. Due to this downtime IFCo sold back its forward purchased gas to its supplier, which resulted in a gain from the resale of gas of USD 61.0 million. This figure does not include and is partly offset by the lost margin due to the lower production volumes and additional expenses associated with the downtime. The gain on the resale of gas is recorded as part of raw materials and consumables and finished goods.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Wages and salaries | \u00a0 | 293.8 | 263.0 |
Social securities | \u00a0 | 9.3 | 8.2 |
Employee incentive plans | \u00a0 | 54.5 | 51.2 |
Pension cost | \u00a0 | 26.7 | 24.3 |
Share-based compensation expenses | (22.3) | 9.2 | 8.5 |
Other employee expenses | \u00a0 | 61.1 | 53.7 |
Total | \u00a0 | 454.6 | 408.9 |
During the financial year ended 31 December 2022, the number of key executives was 4 (2021: 4 key executives), which represents the Executive Board members; Nassef Sawiris (Executive Chair), Hassan Badrawi (Chief Financial Officer) Maud de Vries (Chief Legal and Human Capital Officer) and Ahmed El-Hoshy (Chief Executive Officer). During the financial year ended 31 December 2022, the number of staff employed in the Group amounted to 4,059 employees (2021: 3,853 employees).
OCI has currently award agreements outstanding under four different share-based compensation plans. In 2022 share based compensation Awards were granted under the Performance Share Unit Plan for Executive Directors, the One Off Share Awards, the Restricted Stock Unit Plan and the Employee Performance Share Unit Plan.
In 2019, a Performance Share Unit plan was introduced for the Executive Board as replacement for the performance share plan. The Performance Share Unit plan comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts. Up to 2021, Total Shareholder Return (\u2018TSR\u2019) was the only performance measure. In 2021, the plan was amended and new performance measures were added. For each Award, starting with the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market.
Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the members of the Executive Board for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Performance Share Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 170,650 | 230,612 | 316,729 | 230,558 |
Fair value at grant date (EUR) | 4,075,463 | 4,065,690 | 4,336,020 | 4,486,659 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 | 13.69 | 19.46 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% | -0.660% | -0.659% |
Expected share price volatility | 44.3% | 44.2% | 34.5% | 34.7% |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 230,612 | 316,729 | 230,558 |
Vested in 2022 | - | - | - | - |
Expired in 2022 | - | - | - | (230,558) |
Dividend equivalent shares1 | 23,263 | 31,436 | 43,179 | - |
Outstanding 31 December 2022 | 193,913 | 262,048 | 359,908 | - |
To reward the exceptional performance of the Executive Directors in 2021, One Off Share Awards were granted to the CEO, CFO and CLHCO. The One Off Share Awards granted on May 25th, 2022 comprise of conditional stock units which each cover the value of one fully paid OCI share. For the purpose of this exceptional One Off Share Award, vesting of the conditional stock units shall not be subject to forward-looking performance conditions. Apart from this, the terms and conditions of the One Off Share Awards are in line with the terms and conditions as set out in the Executive Performance Stock Unit Plan 2019. The One Off Share Awards concern a grant of conditional stock units that will generally vest, subject to the Executive Directors\u2019 continued engagement as an Executive Director of the Company on the date which is the third anniversary of the Date of Grant, with Shares (to the extent applicable, net of tax or following sell-to-cover) being subject to a two-year holding period, in line with the Dutch Corporate Governance Code. The fair value of the One Off Share Awards is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of One Off Share Awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
One Off Share Award | 2022 Grant |
|---|---|
Conditional shares granted | 49,519 |
Fair value at grant date (EUR) | 1,736,136 |
Fair value at grant date (EUR per share) | 35.06 |
Vesting period at issuance (years) | 3 |
Dividend yield | 0.0% |
Outstanding 31 December 2021 | - |
Dividend equivalent shares1 | 6,749 |
Outstanding 31 December 2022 | 56,268 |
For the level below the Board, a Restricted Stock Units Plan was implemented to replace the Bonus Matching Plan. First award granted under this plan was made in 2019. Executive Directors are not eligible for RSU grants. The Restricted Stock Units Plan comprises the conditional granting of shares in OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan will be paid out partly in cash in accordance with the short-term incentive plan and partly in awards in accordance with this RSU plan. Shares will vest for one third of the restricted stock units comprising the award at the second anniversary of the date of grant and for two thirds of the restricted stock units comprising the award on the third anniversary of the date of grant subject to still being employed by OCI. The RSU entitles the participants to dividend equivalents.
The fair value of the RSUs awarded is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of RSU share awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
Restricted Stock Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 251,415 | 132,666 | 89,900 | 206,253 |
Fair value at grant date (EUR) | 7,130,129 | 2,409,215 | 945,748 | 5,455,392 |
Fair value at grant date (EUR per share) | 28.36 | 18.16 | 10.52 | 26.45 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 125,157 | 79,027 | 120,615 |
Forfeited in 2022 | - | (9,869) | (2,729) | (1,931) |
Vested in 2022 | - | (1,748) | (35,122) | (118,684) |
Initial awards (new joiners) | - | 13,652 | 10,925 | - |
Dividend equivalent shares1 | 33,426 | 16,797 | 7,728 | - |
Outstanding 31 December 2022 | 284,841 | 143,989 | 59,829 | - |
In 2021, the Employee Performance Share Units Plan was introduced for key Employees. The Employee Performance Share Units Plan is similar to the Executive Director Performance Share Units Plan. For the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market. Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the employees for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Employee Performance Share Units Plan | 2022 Grant | 2021 Grant |
|---|---|---|
Conditional shares granted | 12,234 | 14,006 |
Fair value at grant date (EUR) | 292,172 | 246,926 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 |
Vesting period at issuance (years) | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% |
Expected share price volatility | 44.3% | 44.2% |
Dividend yield | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 14,006 |
Vested in 2022 | - | - |
Dividend equivalent shares1 | 1,666 | 1,909 |
Outstanding 31 December 2022 | 13,900 | 15,915 |
OCI has currently award agreements outstanding under four different share-based compensation plans. In 2022 share based compensation Awards were granted under the Performance Share Unit Plan for Executive Directors, the One Off Share Awards, the Restricted Stock Unit Plan and the Employee Performance Share Unit Plan.
In 2019, a Performance Share Unit plan was introduced for the Executive Board as replacement for the performance share plan. The Performance Share Unit plan comprises the conditional granting of shares in OCI. Each year a plan with a 3-year vesting period starts. Up to 2021, Total Shareholder Return (\u2018TSR\u2019) was the only performance measure. In 2021, the plan was amended and new performance measures were added. For each Award, starting with the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market.
Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the members of the Executive Board for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Performance Share Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 170,650 | 230,612 | 316,729 | 230,558 |
Fair value at grant date (EUR) | 4,075,463 | 4,065,690 | 4,336,020 | 4,486,659 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 | 13.69 | 19.46 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% | -0.660% | -0.659% |
Expected share price volatility | 44.3% | 44.2% | 34.5% | 34.7% |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 230,612 | 316,729 | 230,558 |
Vested in 2022 | - | - | - | - |
Expired in 2022 | - | - | - | (230,558) |
Dividend equivalent shares1 | 23,263 | 31,436 | 43,179 | - |
Outstanding 31 December 2022 | 193,913 | 262,048 | 359,908 | - |
To reward the exceptional performance of the Executive Directors in 2021, One Off Share Awards were granted to the CEO, CFO and CLHCO. The One Off Share Awards granted on May 25th, 2022 comprise of conditional stock units which each cover the value of one fully paid OCI share. For the purpose of this exceptional One Off Share Award, vesting of the conditional stock units shall not be subject to forward-looking performance conditions. Apart from this, the terms and conditions of the One Off Share Awards are in line with the terms and conditions as set out in the Executive Performance Stock Unit Plan 2019. The One Off Share Awards concern a grant of conditional stock units that will generally vest, subject to the Executive Directors\u2019 continued engagement as an Executive Director of the Company on the date which is the third anniversary of the Date of Grant, with Shares (to the extent applicable, net of tax or following sell-to-cover) being subject to a two-year holding period, in line with the Dutch Corporate Governance Code. The fair value of the One Off Share Awards is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of One Off Share Awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
One Off Share Award | 2022 Grant |
|---|---|
Conditional shares granted | 49,519 |
Fair value at grant date (EUR) | 1,736,136 |
Fair value at grant date (EUR per share) | 35.06 |
Vesting period at issuance (years) | 3 |
Dividend yield | 0.0% |
Outstanding 31 December 2021 | - |
Dividend equivalent shares1 | 6,749 |
Outstanding 31 December 2022 | 56,268 |
For the level below the Board, a Restricted Stock Units Plan was implemented to replace the Bonus Matching Plan. First award granted under this plan was made in 2019. Executive Directors are not eligible for RSU grants. The Restricted Stock Units Plan comprises the conditional granting of shares in OCI. The total gross entitlement of an eligible employee under the applicable short-term incentive plan will be paid out partly in cash in accordance with the short-term incentive plan and partly in awards in accordance with this RSU plan. Shares will vest for one third of the restricted stock units comprising the award at the second anniversary of the date of grant and for two thirds of the restricted stock units comprising the award on the third anniversary of the date of grant subject to still being employed by OCI. The RSU entitles the participants to dividend equivalents.
The fair value of the RSUs awarded is based on OCI\u2019s share price at the grant date. Furthermore, when measuring the fair value of RSU share awards, there may be an adjustment for any expected dividends. In this case, there will be no adjustment for dividends since the participants are entitled to dividend equivalents during the vesting period.
Restricted Stock Units Plan | 2022 Grant | 2021 Grant | 2020 Grant | 2019 Grant |
|---|---|---|---|---|
Conditional shares granted | 251,415 | 132,666 | 89,900 | 206,253 |
Fair value at grant date (EUR) | 7,130,129 | 2,409,215 | 945,748 | 5,455,392 |
Fair value at grant date (EUR per share) | 28.36 | 18.16 | 10.52 | 26.45 |
Vesting period at issuance (years) | 3 | 3 | 3 | 3 |
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 125,157 | 79,027 | 120,615 |
Forfeited in 2022 | - | (9,869) | (2,729) | (1,931) |
Vested in 2022 | - | (1,748) | (35,122) | (118,684) |
Initial awards (new joiners) | - | 13,652 | 10,925 | - |
Dividend equivalent shares1 | 33,426 | 16,797 | 7,728 | - |
Outstanding 31 December 2022 | 284,841 | 143,989 | 59,829 | - |
In 2021, the Employee Performance Share Units Plan was introduced for key Employees. The Employee Performance Share Units Plan is similar to the Executive Director Performance Share Units Plan. For the 2021 Award made on 8 February 2021 vesting will be dependent on relative TSR (60% weight) and additional performance measures (40% weight), being operational excellence, decarbonization and diversity & inclusion. The relative TSR performance is measured against a peer group of companies operating in a similar or the same market. Between 0% and 150% of this award will vest at the end of 3-year performance period based on the actual performance. The fair value of these awards has been calculated using a Monte-Carlo simulations model. The number of performance stock units comprising Shares has been calculated based on the average OCI N.V. closing sales price of the Shares as quoted in Euronext Amsterdam on the date of the grant.
The relative TSR ranking that OCI achieves in the peer group and the achievements on the other performance measures determines the definitive number of shares that are granted at the end of the vesting period. The remaining shares vested must be retained by the employees for a period of 2 years. The expected volatility is based on the annualised volatility of the historic daily share price return data prior to the grant date over a period equal to the remaining performance period.
Employee Performance Share Units Plan | 2022 Grant | 2021 Grant |
|---|---|---|
Conditional shares granted | 12,234 | 14,006 |
Fair value at grant date (EUR) | 292,172 | 246,926 |
Weighted average fair value at grant date (EUR per share) | 23.88 | 17.63 |
Vesting period at issuance (years) | 3 | 3 |
Risk free interest rate | -0.171% | -0.728% |
Expected share price volatility | 44.3% | 44.2% |
Dividend yield | 0.0% | 0.0% |
Outstanding 31 December 2021 | - | 14,006 |
Vested in 2022 | - | - |
Dividend equivalent shares1 | 1,666 | 1,909 |
Outstanding 31 December 2022 | 13,900 | 15,915 |
OCI\u2019s reportable segments are consistent with how the Chief Operating Decision Maker (\u2018CODM\u2018) manages the business operations and views the markets it serves. The reportable segments are: Methanol US, Methanol Europe, Nitrogen US, Nitrogen Europe and Fertiglobe. The organizational structure of the segments is based on a number of factors that the CODM uses to evaluate, view, and direct business operations.
The Company derives the results of the business segments directly from its internal management reporting system. All segments are managed separately because they require different operating strategies and use their own assets and employees. The entities grouped together in each segment have similar regulatory environments, macroeconomic conditions, banking, insurance and public utilities.
The Group has two revenue streams from contracts with customers that relate to the sale of goods, namely, Nitrogen and Methanol.
Segment revenues includes revenues from sales to external customers and intersegment revenues.
EBITDA, Adjusted EBITDA and profit / (loss) are the primary performance measure used by our CODM to evaluate operating results and allocate capital resources among segments. These are also the profitability measures used to set management and executive incentive compensation goals. \u2018Other\u2019 consists of share-based compensation and certain corporate general and administrative expenses that are not allocated to the segments. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be reasonably and consistently re-allocated.
A summary description of each reportable segment is as follows:
This segment consists of OCI Beaumont (OCIB), Natgasoline LLC, the trading entity OCI Methanol Marketing LLC (OMM US) and OCI USA Inc., an entity that serves as the US corporate income tax payer for OCI Beaumont and OMM LLC.
OCI Beaumont is an integrated methanol and ammonia production facility that is strategically located on the Texas Gulf Coast near Beaumont. Natgasoline LLC is a world scale methanol production complex in Beaumont, Texas. OCI and its partner, Consolidated Energy Limited (CEL)/G2X, each own 50% stakes.
Natgasoline LLC is an equity-accounted investee of the Group, reference is made to note 10. Natgasoline commenced production in 2018 and due to the similarities in regulatory environment, products and customer base, this equity-accounted investee has been included in the \u2018Methanol US\u2019 segment as of 2018 on a proportionally consolidated basis. The elimination column is used to eliminate the proportionally consolidated figures of Natgasoline that are included in the US Methanol segment and to include the investment in, and results from Natgasoline (associate) and thereby reconcile to the Group\u2019s reported figures.
OCIB and Natgasoline sell mainly domestically; primarily to industrial customers in and around the U.S. Gulf Coast through pipeline connections to adjacent customers, port access with dedicated methanol and ammonia import / export jetties, and truck loading facilities for both methanol and ammonia. OMM US is a trading entity that sells products produced by OCIB and Natgasoline. OCI USA Inc. is the US corporate taxpayer for OCIB and OMM US.
This segment consists of BioMCN, located at Delfzijl in the Netherlands, OCI Fuels Ltd, OCI Fuels B.V. and OCI Methanol Marketing B.V. (OMM EU). BioMCN is one of Europe\u2019s largest methanol producers. BioMCN produces two types of methanol: bio-methanol and regular (also known as grey) methanol. OCI Fuels is a trading entity that supplies biogas, which is processed into bio-methanol and bio-fuel, and sells the bio-methanol products produced by BioMCN. OMM EU is a trading entity that sells grey methanol products produced by BioMCN.
This segment consists of Iowa Fertilizer Company (IFCo), a wholly owned nitrogen fertilizer complex in Iowa, the trading entity, N-7 and Iowa Intermediate Fertilizer Holding, an entity that serves as the US corporate income tax payer for Iowa Fertilizer Company. IFCo products are sold via the trading entity.
This segment consists of OCI Nitrogen (OCIN). OCI Nitrogen is Europe\u2019s second largest integrated nitrates fertilizer producer and the world\u2019s largest melamine producer with production site in Geleen, the Netherlands.
The Fertiglobe segment consists of the following entities: Egyptian Fertilizers Company (EFC), Egypt Basic Industries Corporation (EBIC), Sorfert Algerie (Sorfert), Ruwais Fertilizer Industries LLC (Fertil), Fertiglobe Distribution (FD), Fertiglobe Fertilizer Trading (FFT, previously OCI Fertilizer Trading), OCI Fertilizer Trade and Supply (OFTS), Fertiglobe plc and OCI S.A.E. EFC is a granular urea producer in Egypt. EBIC is an ammonia plant in Egypt. Sorfert is a partnership with Algeria\u2019s state-owned oil and gas authority and is one of the largest nitrogen fertilizer producers in North Africa. Fertil is a producer of urea fertilizer in Abu Dhabi. FD, FFT and OFTS are trading entities based in Abu Dhabi, Dubai and the Netherlands.
This segment consists of all remaining entities of the Group, including OCI Clean Ammonia LLC. OCI Clean Ammonia LLC is identified as an operating segment, but due to the pre-operating phase aggregation criteria are not yet met.
2022 | Methanol US1 | Methanol Europe | Nitrogen US | Nitrogen Europe | Fertiglobe | Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
Total revenues | 908.9 | 498.9 | 1,936.5 | 2,382.8 | 5,027.5 | - | (1,041.5) | 9,713.1 |
EBITDA2 | 284.2 | 108.3 | 709.7 | 239.1 | 2,451.7 | (81.4) | (107.4) | 3,604.2 |
Adjusted EBITDA2 | 372.1 | 109.1 | 744.3 | 252.6 | 2,473.0 | (75.9) | 15.8 | 3,891.0 |
Income from equity-accounted investees | - | - | - | 8.8 | - | - | 13.0 | 21.8 |
Depreciation, amortization and impairment | (155.2) | (18.4) | (155.6) | (76.0) | (266.3) | (5.4) | 77.0 | (599.9) |
Finance income | 11.7 | 0.7 | 6.0 | 24.3 | 67.1 | 228.8 | (44.3) | 294.3 |
Finance expense | (45.0) | (1.9) | (142.7) | (30.3) | (192.9) | (142.1) | 74.6 | (480.3) |
Income tax (expense) / income | (23.6) | - | (126.8) | (41.3) | (239.2) | 13.0 | 4.1 | (413.8) |
Net profit | 72.1 | 88.7 | 290.6 | 124.6 | 1,820.4 | 12.9 | 17.0 | 2,426.3 |
Equity-accounted investees | - | - | - | 47.1 | - | 0.2 | 475.0 | 522.3 |
Capital expenditures non-current assets | 77.7 | 14.0 | 36.3 | 96.6 | 111.1 | 69.2 | (4.4) | 400.5 |
Total assets | 1,551.5 | 95.0 | 2,095.1 | 927.4 | 5,310.0 | 365.7 | (573.6) | 9,771.1 |
2021 | Methanol US1 | Methanol Europe | Nitrogen US | Nitrogen Europe | Fertiglobe | Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
Total revenues | 789.2 | 531.3 | 827.7 | 1,256.8 | 3,310.7 | - | (397.0) | 6,318.7 |
EBITDA2 | 393.0 | 148.5 | 344.3 | 209.3 | 1,571.7 | (75.1) | (137.3) | 2,454.4 |
Adjusted EBITDA2 | 370.8 | 151.4 | 344.3 | 207.6 | 1,550.5 | (67.5) | (30.6) | 2,526.5 |
Income from equity-accounted investees | - | - | - | 7.5 | - | - | (0.2) | 7.3 |
Depreciation, amortization and impairment | (151.0) | (303.7) | (152.4) | (92.1) | (267.1) | (4.0) | 78.7 | (891.6) |
Finance income | 58.0 | 1.1 | 0.4 | 6.9 | 19.6 | 76.9 | (128.3) | 34.6 |
Finance expense | (89.7) | (3.1) | (130.8) | (9.6) | (52.7) | (179.3) | 156.4 | (308.8) |
Income tax (expense) / income | (38.6) | 2.6 | 197.9 | (29.0) | (295.1) | 25.1 | - | (137.1) |
Net profit | 171.7 | (154.6) | 259.4 | 93.0 | 976.4 | (156.4) | (30.7) | 1,158.8 |
Equity-accounted investees | - | - | - | 42.0 | - | 0.2 | 452.7 | 494.9 |
Capital expenditures non-current assets | 89.7 | 21.7 | 44.7 | 62.9 | 84.6 | 4.5 | (72.9) | 235.2 |
Total assets | 1,882.2 | 87.8 | 2,417.9 | 801.8 | 4,921.1 | 318.2 | (617.4) | 9,811.6 |
The geographic information below analyses the Group\u2019s revenue (by destination of the goods) and noncurrent assets (by the Company where the activities are being operated). OCI has no single customer that represents 10 percent or more of revenues and therefore information about major customers is not provided.
| \u00a0 | Revenue | Non-current assets | ||
|---|---|---|---|---|
$ million | 2022 | 2021 | 2022 | 2021 |
Europe | 4,247.2 | 2,268.6 | 565.3 | 563.1 |
Americas | 2,823.7 | 2,371.8 | 2,841.5 | 2,963.1 |
Africa & Middle East | 1,092.1 | 362.5 | 3,384.2 | 3,492.3 |
Asia & Oceania | 1,550.1 | 1,315.8 | 15.9 | 14.3 |
Total | 9,713.1 | 6,318.7 | 6,806.9 | 7,032.8 |
The key performance obligation of the OCI group is always the supply of products as specified in the contracts with customers, possible additional performance obligations included are transportation and related cost of insurance, depending on the incoterms. The Group has two revenue streams from contracts with customers that relate to the supply of products i.e. Nitrogen and Methanol. No impairment losses on receivables have been recognized (reference is made to note 6.1 and note 9).
Based on the IFRS 15 accounting policies adopted, the following modifications to the contracts are allowed: discounts and rebates. They are all taken into account when presenting the segment revenues. Time value of money is not considered to be relevant for the amendment of the revenue amount, as the payment terms are short. Also, there are no non-cash considerations that would need to be disclosed separately. No information is provided about remaining performance obligations at current and comparative year end date that have an original expected duration of one year or less, as allowed by IFRS 15.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-474": { "value": " 28 Contingencies Letters of guarantee / letters of credit OCI has a committed guarantee facility with Rabobank for a maximum guarantee amount of EUR 300.0 million (USD 321.3 million). Under this guarantee facility, EUR 58.4 million (USD 62.6 million) has been utilized. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes. OCI has an uncommitted guarantee facility with Tokio Marine Europe SA, Z\u00fcrich Insurance plc and Huler Hermes SA for a maximum guarantee amount of EUR 150.0 million (USD 160.7 million). Under this guarantee facility, EUR 79.1 million (USD 84.7 million) has been drawn. The facility is used to issue a performance guarantee on behalf of OCIN. OCI has an uncommitted guarantee facility for the issuance of payment undertakings with BNP Paribas for an amount of USD 53.7 million. The facility is utilized for USD 5.5 million. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes. Litigations and claims In the normal course of business, the Group entities and joint ventures are involved in some arbitration, commercial disputes or court cases as defendants or claimants. These litigations and commercial disputes are carefully monitored by the entities\u2019 and Group management and legal counsels, and are regularly assessed with due consideration for possible insurance coverage and recourse rights on third parties. OCI does not expect these proceedings to result in liabilities that have a material effect on the Company\u2019s financial position. In cases where it is probable that the outcome of the proceedings will be unfavorable, and the financial outcome can be measured reliably, a provision has been recognized in the financial statements which is disclosed in note 21 Provisions. It should be understood that, in light of possible future developments, such as (a) potential additional lawsuits, (b) possible future settlements, and (c) rulings or judgments in pending lawsuits, certain cases may result in additional liabilities and related costs. At this point in time, OCI cannot estimate any additional amount of loss or range of loss in excess of the recorded amounts with sufficient certainty to allow such amount or range of amounts to be meaningful. Moreover, if and to the extent that the contingent liabilities materialize, they are typically paid over a number of years and the timing of such payments cannot be predicted with confidence. While the outcome of said cases, claims and disputes cannot be predicted with certainty, we believe, based upon legal advice and information received, that the final outcome will not materially affect our consolidated financial position but could be material to our results of operations or cash flows in any one accounting period. Sorfert legal case On 5 March 2018, the lower criminal court of Oran (Tribunal du p\u00f4le p\u00e9nal sp\u00e9cialis\u00e9 d\u2019Oran) issued a judgment against Sorfert regarding an alleged violation of exchange control regulations as well as the regulation of public markets and public service delegations. The lower court ordered Sorfert to pay a fine in the amount of 5.5 billion Algerian dinars (about USD 39.9 million) and an officer of the company received a fine of DZD 2.8 billion (about USD 20.0 million). On 7 March 2018, Sorfert lodged an appeal with the Court of Appeal of Oran, Algeria who upheld the verdict against Sorfert in its judgment rendered on 28 November 2018. In January 2019, Sorfert lodged an appeal against this judgment with the Supreme Court. Sorfert disputes the validity of the judgment and continues to vigorously defend its case. To date, no Supreme Court hearing has been scheduled and during the appeal period the enforcement of the judgment is suspended. Various renowned local and international law firms have examined OCI\u2019s legal position. No provision has been recorded by the Group related to this matter. OCI S.A.E. tax dispute In October 2012, the Egyptian Tax Authority (\u2018ETA\u2019) raised a tax evasion claim against our Egyptian subsidiary, OCI S.A.E. The tax dispute related to the sale of OCI S.A.E.\u2019s cement business to Lafarge SA in 2007. This was filed against OCI S.A.E. despite there being no official investigation. Although OCI S.A.E. and its legal and tax advisors believed that the aforementioned transaction was exempted of tax, management entered into a settlement agreement whereby EGP 7.1 billion would be paid over a 5-year period. The agreement was followed by payment of a first installment of EGP 2.5 billion in 2013. Following the change in government, the company was exonerated from the tax claim by the Egyptian Public Prosecutor on 18 February 2014 and subsequently by the ETA\u2019s Independent Appeals Committee on 4 November 2014. The ETA appealed this decision. On 13 November 2014 OCI S.A.E. announced that it would transfer its rights to EGP 1.9 billion undue paid tax amounts to a Egyptian development fund and recorded a provision for this amount, reference is made to note 21 Provisions. Despite the ETA Independent Appeals Committee ruling in favor of OCI S.A.E., OCI S.A.E. was still held to pay EGP 900 million. OCI S.A.E. has lodged a reimbursement claim for this amount. As this dispute occurred prior to the demerger of the Engineering and Construction Group that formed Orascom Construction PLC (\u2018OC\u2019) in 2015, any liabilities and any recoveries are shared on a 50:50 basis between OCI N.V. and OC. Should the ETA win their appeal, OCI N.V.\u2019s maximum share of the tax claim would be EGP 2.3 billion, which equates to approximately USD 92.9 million (2021: USD 146.3 million). In January 2023, a judgement was issued in favor of OCI S.A.E. rejecting the appeal of the ETA. The ETA has appealed the decision. Asset retirement obligations Sorfert has a contractual asset retirement obligation in connection with the lease of its land. This asset retirement obligation is being disclosed as a contingent liability because it is not possible to determine a reliable estimate in both timing and value of this obligation. OCIN entered into agreements with Royal DSM N.V. and associated company Sitech for respectively the lease of the sites (land) on which it operates its plant and site services/usage. These agreements have an indefinite term and include an asset dismantling obligation and the obligation to clean up environmental pollution occurred after zero measurement. These obligations have not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management. Fertil entered into an agreement with ADNOC for the lease of the land on which it operates its plant. The agreement has an indefinite term and includes an asset dismantling obligation and the obligation to clean up environmental pollution occurred after decommissioning. This obligation has not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management. Contingent assets A sequence of historical transactions resulted in (gross) deductible temporary tax differences of USD 1.4 billion. However, due to a difference in interpretation of local tax regulations, the deductible temporary differences do currently not yet meet the recognition criteria of IAS 12 / IFRIC 23. As such, at 31 December 2022, the Group has an uncertain tax liability of USD 182.9 million. The Group is currently under examination of the tax authorities in the respective jurisdiction. A conclusion on the treatment is expected within the next twelve months. As such, in 2022, the related uncertain tax liability of USD 182.9 million has been reclassified from a non-current uncertain tax position to a current uncertain tax position. 29 Commitments 29.1 Biogas purchase agreements OCI Fuels B.V. enters into biogas purchase agreements around the USA for the production of biomethanol in the methanol plant in Beaumont (Texas, USA) and for sale to the USA transportation market. Through these long-term agreements OCI purchases biogas for a fixed price. Per 31 December 2022, an expected 15.3 million mmbtu biogas will be purchased over the coming years (2023 - 2029). The total expected purchase commitment per 31 December 2022 amounts to USD 147.7 million (2021: USD 154.1 million). Total contract volume is 39.0 million mmbtu and the total contract value is USD 364.5 million (2021: USD 371.3 million). 29.2 Capital commitments Capital commitments relate to purchase commitments of property, plant and equipment. $ millions 2022 2021 OCI Beaumont - 0.1 Sorfert 6.7 19.1 Fertil 34.5 19.8 Fertiglobe plc 30.1 - BioMCN 0.2 5.5 OCIN 20.7 9.8 OCI Fuels USA - 0.9 EBIC 1.2 4.6 EFC 6.2 3.7 IFCo 48.3 2.4 OCI Clean Ammonia 202.4 - Total 350.3 65.9 Blue Hydrogen offtake agreement In November 2022, OCI Clean Ammonia LLC signed an offtake agreement for the offtake of blue hydrogen to supply our greenfield blue ammonia facility located on the Gulf Coast of the United States. The agreement involves the offtake of approximately 200,000 metric tonnes of blue hydrogen per annum. The pricing of blue hydrogen is largely derived from natural gas and power prices, supplemented by a fixed fee component. The commencement of the offtake agreement will be aligned with the commencement of production at our blue ammonia plant, which is planned for Q1 2025. OCI N.V. acts as a guarantor for any operational liabilities resulting from this offtake agreement. Iowa carbon capture project OCI has entered into long-term agreements for a project to capture and sequester CO2 produced on-site at IFCo. The project is expected to be completed by Q1 2025. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-475": { "value": " 28 Contingencies Letters of guarantee / letters of credit OCI has a committed guarantee facility with Rabobank for a maximum guarantee amount of EUR 300.0 million (USD 321.3 million). Under this guarantee facility, EUR 58.4 million (USD 62.6 million) has been utilized. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes. OCI has an uncommitted guarantee facility with Tokio Marine Europe SA, Z\u00fcrich Insurance plc and Huler Hermes SA for a maximum guarantee amount of EUR 150.0 million (USD 160.7 million). Under this guarantee facility, EUR 79.1 million (USD 84.7 million) has been drawn. The facility is used to issue a performance guarantee on behalf of OCIN. OCI has an uncommitted guarantee facility for the issuance of payment undertakings with BNP Paribas for an amount of USD 53.7 million. The facility is utilized for USD 5.5 million. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes. Litigations and claims In the normal course of business, the Group entities and joint ventures are involved in some arbitration, commercial disputes or court cases as defendants or claimants. These litigations and commercial disputes are carefully monitored by the entities\u2019 and Group management and legal counsels, and are regularly assessed with due consideration for possible insurance coverage and recourse rights on third parties. OCI does not expect these proceedings to result in liabilities that have a material effect on the Company\u2019s financial position. In cases where it is probable that the outcome of the proceedings will be unfavorable, and the financial outcome can be measured reliably, a provision has been recognized in the financial statements which is disclosed in note 21 Provisions. It should be understood that, in light of possible future developments, such as (a) potential additional lawsuits, (b) possible future settlements, and (c) rulings or judgments in pending lawsuits, certain cases may result in additional liabilities and related costs. At this point in time, OCI cannot estimate any additional amount of loss or range of loss in excess of the recorded amounts with sufficient certainty to allow such amount or range of amounts to be meaningful. Moreover, if and to the extent that the contingent liabilities materialize, they are typically paid over a number of years and the timing of such payments cannot be predicted with confidence. While the outcome of said cases, claims and disputes cannot be predicted with certainty, we believe, based upon legal advice and information received, that the final outcome will not materially affect our consolidated financial position but could be material to our results of operations or cash flows in any one accounting period. Sorfert legal case On 5 March 2018, the lower criminal court of Oran (Tribunal du p\u00f4le p\u00e9nal sp\u00e9cialis\u00e9 d\u2019Oran) issued a judgment against Sorfert regarding an alleged violation of exchange control regulations as well as the regulation of public markets and public service delegations. The lower court ordered Sorfert to pay a fine in the amount of 5.5 billion Algerian dinars (about USD 39.9 million) and an officer of the company received a fine of DZD 2.8 billion (about USD 20.0 million). On 7 March 2018, Sorfert lodged an appeal with the Court of Appeal of Oran, Algeria who upheld the verdict against Sorfert in its judgment rendered on 28 November 2018. In January 2019, Sorfert lodged an appeal against this judgment with the Supreme Court. Sorfert disputes the validity of the judgment and continues to vigorously defend its case. To date, no Supreme Court hearing has been scheduled and during the appeal period the enforcement of the judgment is suspended. Various renowned local and international law firms have examined OCI\u2019s legal position. No provision has been recorded by the Group related to this matter. OCI S.A.E. tax dispute In October 2012, the Egyptian Tax Authority (\u2018ETA\u2019) raised a tax evasion claim against our Egyptian subsidiary, OCI S.A.E. The tax dispute related to the sale of OCI S.A.E.\u2019s cement business to Lafarge SA in 2007. This was filed against OCI S.A.E. despite there being no official investigation. Although OCI S.A.E. and its legal and tax advisors believed that the aforementioned transaction was exempted of tax, management entered into a settlement agreement whereby EGP 7.1 billion would be paid over a 5-year period. The agreement was followed by payment of a first installment of EGP 2.5 billion in 2013. Following the change in government, the company was exonerated from the tax claim by the Egyptian Public Prosecutor on 18 February 2014 and subsequently by the ETA\u2019s Independent Appeals Committee on 4 November 2014. The ETA appealed this decision. On 13 November 2014 OCI S.A.E. announced that it would transfer its rights to EGP 1.9 billion undue paid tax amounts to a Egyptian development fund and recorded a provision for this amount, reference is made to note 21 Provisions. Despite the ETA Independent Appeals Committee ruling in favor of OCI S.A.E., OCI S.A.E. was still held to pay EGP 900 million. OCI S.A.E. has lodged a reimbursement claim for this amount. As this dispute occurred prior to the demerger of the Engineering and Construction Group that formed Orascom Construction PLC (\u2018OC\u2019) in 2015, any liabilities and any recoveries are shared on a 50:50 basis between OCI N.V. and OC. Should the ETA win their appeal, OCI N.V.\u2019s maximum share of the tax claim would be EGP 2.3 billion, which equates to approximately USD 92.9 million (2021: USD 146.3 million). In January 2023, a judgement was issued in favor of OCI S.A.E. rejecting the appeal of the ETA. The ETA has appealed the decision. Asset retirement obligations Sorfert has a contractual asset retirement obligation in connection with the lease of its land. This asset retirement obligation is being disclosed as a contingent liability because it is not possible to determine a reliable estimate in both timing and value of this obligation. OCIN entered into agreements with Royal DSM N.V. and associated company Sitech for respectively the lease of the sites (land) on which it operates its plant and site services/usage. These agreements have an indefinite term and include an asset dismantling obligation and the obligation to clean up environmental pollution occurred after zero measurement. These obligations have not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management. Fertil entered into an agreement with ADNOC for the lease of the land on which it operates its plant. The agreement has an indefinite term and includes an asset dismantling obligation and the obligation to clean up environmental pollution occurred after decommissioning. This obligation has not been accounted for, since the company has no plans to end its business activities in the foreseeable future as such the financial impact is assessed as not material by the company\u2019s management. Contingent assets A sequence of historical transactions resulted in (gross) deductible temporary tax differences of USD 1.4 billion. However, due to a difference in interpretation of local tax regulations, the deductible temporary differences do currently not yet meet the recognition criteria of IAS 12 / IFRIC 23. As such, at 31 December 2022, the Group has an uncertain tax liability of USD 182.9 million. The Group is currently under examination of the tax authorities in the respective jurisdiction. A conclusion on the treatment is expected within the next twelve months. As such, in 2022, the related uncertain tax liability of USD 182.9 million has been reclassified from a non-current uncertain tax position to a current uncertain tax position. ", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-477": { "value": " 29 Commitments 29.1 Biogas purchase agreements OCI Fuels B.V. enters into biogas purchase agreements around the USA for the production of biomethanol in the methanol plant in Beaumont (Texas, USA) and for sale to the USA transportation market. Through these long-term agreements OCI purchases biogas for a fixed price. Per 31 December 2022, an expected 15.3 million mmbtu biogas will be purchased over the coming years (2023 - 2029). The total expected purchase commitment per 31 December 2022 amounts to USD 147.7 million (2021: USD 154.1 million). Total contract volume is 39.0 million mmbtu and the total contract value is USD 364.5 million (2021: USD 371.3 million). 29.2 Capital commitments Capital commitments relate to purchase commitments of property, plant and equipment. $ millions 2022 2021 OCI Beaumont - 0.1 Sorfert 6.7 19.1 Fertil 34.5 19.8 Fertiglobe plc 30.1 - BioMCN 0.2 5.5 OCIN 20.7 9.8 OCI Fuels USA - 0.9 EBIC 1.2 4.6 EFC 6.2 3.7 IFCo 48.3 2.4 OCI Clean Ammonia 202.4 - Total 350.3 65.9 Blue Hydrogen offtake agreement In November 2022, OCI Clean Ammonia LLC signed an offtake agreement for the offtake of blue hydrogen to supply our greenfield blue ammonia facility located on the Gulf Coast of the United States. The agreement involves the offtake of approximately 200,000 metric tonnes of blue hydrogen per annum. The pricing of blue hydrogen is largely derived from natural gas and power prices, supplemented by a fixed fee component. The commencement of the offtake agreement will be aligned with the commencement of production at our blue ammonia plant, which is planned for Q1 2025. OCI N.V. acts as a guarantor for any operational liabilities resulting from this offtake agreement. Iowa carbon capture project OCI has entered into long-term agreements for a project to capture and sequester CO2 produced on-site at IFCo. The project is expected to be completed by Q1 2025. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-478": { "value": " 30 Related party transactions Transactions with related parties \u2013 normal course of business Transactions with related parties occur when a relationship exists between the Company and their directors and key management personnel. The Company engages in the following types of related party transactions: Those with NNS Luxembourg Sarl for occasional consultancy services and Residencia Europe Ltd for personnel recharges. The Executive Chair\u2019s travel as per his right to expense the use of a private aircraft for OCI-related business travel. The Company\u2019s former construction arm which was divested on 7 March 2015 and incorporated as a separate legal entity, \"Orascom Conctruction plc\" (OC) in the United Arab Emirates. The Sawiris family, the majority shareholders of OCI, also owns the majority of the outstanding shares of OC, which qualifies OC and its subsidiaries to be classified as related parties. The following is an overview of the transactions and outstanding amounts as at 31 December 2022: Related party Relation Recharges AR at year end Purchases AP at year end Interest expense Orascom Construction Egypt OC Group company - 1.1 0.1 0.1 - Orascom Construction Holding Cyprus OC Group company - - - 0.9 - Orascom Construction plc OC Group company - - - - 9.8 NNS Luxembourg Sarl Related via shareholder Sarl - 0.5 - - - Residencia Europe Ltd Related via shareholder 1.0 0.6 - - - Nassef Sawiris Executive chair - - 0.9 0.5 - Total \u00a01.0 2.2 1.0 1.5 9.8 The following is an overview of the transactions and outstanding amounts as at 31 December 2021: Related party Relation Recharges AR at year end Purchases AP at year end Interest expense Orascom Construction Egypt OC Group company - - 0.3 0.9 - Orascom Construction Holding Cyprus OC Group company - - - 0.8 - Orascom Construction plc OC Group company - - 0.2 - - NNS Luxembourg Sarl Related via shareholder Sarl 0.6 0.2 - - - Nassef Sawiris Executive chair - - 0.7 0.4 - Total \u00a00.6 0.2 1.2 2.1 - Transactions with associates and joint ventures OCI conducts transactions with its associates and joint ventures (as defined in note 3.2, together \u201cEquity-accounted investees\u201d) in the ordinary course of business by buying and selling goods and services from and to various equity-accounted investees within the group. For more information we refer to note 10. The following is an overview of the transactions and outstanding amounts as at 31 December 2022: Related party Relation Revenue AR at year end Purchases AP at year end Interest income Natgasoline LLC Related via associate 11.8 0.5 262.1 54.0 - Sitech Manufacturing Services C.V. Associate - - 145.2 73.8 - Utility Support Group B.V. Related via associate 69.7 1.8 253.4 10.2 - Sitech Services B.V. Associate - - 17.1 2.9 - Nitrogen Iberian Company SL Joint venture 39.0 19.6 - - - Shanxi Fenghe Melamine Co Ltd. Joint venture 0.3 - 24.0 - - Egypt Green Hydrogen SAE Associate - 1.7 - - - Total \u00a0120.8 23.6 701.8 140.9 - The following is an overview of the transactions and outstanding amounts as at 31 December 2021: Related party Relation Revenue AR at year end Purchases AP at year end Interest income Natgasoline LLC Related via associate 8.6 - 179.4 32.4 - Sitech Manufacturing Services C.V. Associate - - 124.5 36.0 - Utility Support Group B.V. Related via associate 31.5 3.7 114.8 14.5 1.0 Sitech Services B.V. Associate - 0.1 18.1 2.4 - Nitrogen Iberian Company SL Joint venture 24.3 - - 0.5 - Shanxi Fenghe Melamine Co Ltd. Joint venture 0.1 1.0 31.8 - - Total \u00a064.5 4.8 468.6 85.8 1.0 Transactions and balances with equity-accounted investees and related parties As these are transactions with equity-accounted investees and related parties, the terms and conditions may not necessarily be the same as transactions negotiated between third parties. Management believes that the terms and conditions of all transactions and outstanding balances with our equity-accounted investees and related parties are generally no less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar services. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-479": { "value": " 31 Remuneration of the Board of Directors (key management personnel) We considered the members of the Board of Directors (Executive and Non-executive) to be the key management personnel as defined in IAS 24 \u2018Related parties\u2019. For transactions with key management personnel reference is made to note 30. No other benefits or remuneration were provided to or have been entered into with above mentioned key management personnel except as disclosed below. Executive Directors remuneration During the financial year ended 31 December 2022, the total remuneration costs relating to the Executive Directors amounted to USD 13.3 million (2021: USD 13.1 million) consisting of the elements listed in the table below: 2022 Age Base salary1 Fertiglobe fees2 Annual bonus Share-based compensation Total remuneration N. Sawiris 61 1,000,000 150,000 - 1,415,114 2,565,114 H. Badrawi 46 1,150,000 150,000 1,298,546 1,345,970 3,944,516 M. de Vries 50 560,000 16,335 632,335 654,897 1,863,567 A. El-Hoshy 38 1,562,5003 150,000 1,764,328 1,469,509 4,946,337 Total \u00a04,272,500 466,335 3,695,209 4,885,490 13,319,534 These figures exclude employer\u2019s social security payments (USD 1.1 million). Fees for the Non-Executive roles held by OCI Executives are paid to OCI N.V. This table shows the amounts subsequently paid out by OCI to the Executives. This figure includes base salary for the additional position as Chief Executive Officer Fertiglobe for the full year 2022. 2021 Age Base salary1 Fertiglobe fees Annual bonus Share-based compensation Total remuneration N. Sawiris 60 1,000,000 - - 2,086,600 3,086,600 H. Badrawi 45 1,150,000 - 1,262,010 1,385,030 3,797,040 M. de Vries 49 560,000 - 614,544 509,197 1,683,741 A. El-Hoshy 37 1,307,6922 - 1,714,688 1,533,043 4,555,423 Total \u00a04,017,692 - 3,591,242 5,513,870 13,122,804 These figures exclude employer\u2019s social security payments (USD 1.0 million). This figure includes base salary for the additional position as Chief Executive Officer Fertiglobe since 27 October 2021. Performance shares At 31 December 2022, the Executive Directors held 815,869 conditional performance shares (2021: 777,899 including the conditional performance shares granted to A. El-Hoshy prior to his appointment to the Board). \u00a0Outstanding year end 2021 Granted conditional Granted Dividend Equivalent Shares Vested Expired Outstanding year end 2022 Vesting date N. Sawiris 116,002 - \u00a0- (116,002) - 07-02-2022 \u00a0135,354 - 18,453 - - 153,807 07-02-2023 \u00a058,235 - 7,938 - - 66,173 07-02-2024 \u00a0- 43,093 5,875 - - 48,968 07-02-2025 N. Sawiris total 309,591 43,093 32,266 - (116,002) 268,948 \u00a0H. Badrawi 66,701 - - - (66,701) - 07-02-2022 \u00a077,829 - 10,610 - - 88,439 07-02-2023 \u00a066,971 - 9,130 - - 76,101 07-02-2024 \u00a0- 49,558 6,756 - - 56,314 07-02-2025 H. Badrawi total 211,501 49,558 26,496 - (66,701) 220,854 \u00a0M. de Vries 32,485 - 4,428 - - 36,913 07-02-2023 \u00a032,612 - 4,445 - - 37,057 07-02-2024 \u00a0- 24,132 3,289 - - 27,421 07-02-2025 M. de Vries total 65,097 24,132 12,162 - - 101,391 \u00a0A. El-Hoshy 47,8551 - - - (47,855) - 07-02-2022 \u00a071,0611 - 9,688 - - 80,749 07-02-2023 \u00a072,794 - 9,923 - - 82,717 07-02-2024 \u00a0- 53,867 7,343 - - 61,210 07-02-2025 A. El-Hoshy total 191,710 53,867 26,954 - (47,855) 224,676 \u00a0 These conditional performance shares were granted prior to appointment to the Board. One Off Share Awards At 31 December 2022, the Executive Directors held 56,268 One Off Share Awards (2021: nil). \u00a0Outstanding year end 2021 Granted conditional Granted Dividend Equivalent Shares Vested Expired Outstanding year end 2022 Vesting date A. El-Hoshy - 18,737 2,554 - - 21,291 25-05-2025 A. El-Hoshy total - 18,737 2,554 - - 21,291 \u00a0H. Badrawi - 18,737 2,554 - - 21,291 25-05-2025 H. Badrawi total - 18,737 2,554 - - 21,291 \u00a0M. de Vries - 12,045 1,641 - - 13,686 25-05-2025 M. de Vries total - 12,045 1,641 - - 13,686 \u00a0 Restricted Stock Units shares At 31 December 2022, the Executive Directors held 14,750 RSU shares (2021: 47,212). \u00a0Outstanding year end 2021 Granted conditional Granted Dividend Equivalent Shares Vested Expired Outstanding year end 2022 Vesting date M. de Vries 9,509 - - (9,509) \u00a0- 17-04-2022 M. de Vries total 9,509 - \u00a0(9,509) - - \u00a0A. El-Hoshy 18,231 - - (18,231) - - 17-04-2022 \u00a06,491 - - (6,491) - - 07-02-2022 \u00a012,981 - 1,769 - - 14,750 07-02-2023 A. El-Hoshy total 37,703 - 1,769 (24,722) - 14,750 \u00a0 Non-Executive Directors remuneration In 2022, the total remuneration costs relating to the Non-Executive Directors amounted to USD 2.1 million (2021: USD 1.7 million) consisting of the elements in the table below: 2022 Annual fixed fee Audit committee membership Additional fee Nomination, governance and remuneration committee Health safety environment committee Total M. Bennett 300,000 - - 7,500 - 307,500 S. Schat 150,000 20,000 - 20,000 - 190,000 A. Montijn-Groenewoud 150,000 - - 7,500 20,000 177,500 R.J. van de Kraats 150,000 25,000 - 7,500 - 182,500 G. Heckman 150,000 - - - 7,500 157,500 J. Guiraud 150,000 20,000 - 7,500 - 177,500 D. Welch 150,000 - 449,6981 - 7,500 607,198 D. Fraser 150,000 20,000 - - - 170,000 H. van de Kerkhof 150,000 - - - 7,500 157,500 Total 1,500,000 85,000 449,698 50,000 42,500 2,127,198 The additional fee for Mr. Welch is for his services as Non-Executive Director of the Board of Fertiglobe plc. 2021 Annual fixed fee Audit committee membership Additional fee Nomination, governance and remuneration committee Health safety environment committee Total M. Bennett 300,000 - - 7,500 - 307,500 S. Schat 150,000 20,000 - 20,000 - 190,000 A. Montijn-Groenewoud 150,000 - - 7,500 15,833 173,333 R.J. van de Kraats 150,000 25,000 - 7,500 - 182,500 G. Heckman 150,000 - - - 7,500 157,500 J. Guiraud 150,000 20,000 - 7,500 - 177,500 D. Welch 150,000 - 73,8591 - 7,500 231,359 D. Fraser 150,000 20,000 - - - 170,000 H. van de Kerkhof 150,000 - - - 7,500 157,500 Total 1,500,000 85,000 73,859 50,000 38,333 1,747,192 The amount reported as extraordinary item for D. Welch is the fee for services on the Board of Fertiglobe plc for the period 1 January 2021 - 26 October 2021. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-480": { "value": " 32 Subsequent events OCI S.A.E. tax dispute On 23 January 2023, a judgement was issued in favor of OCI S.A.E. rejecting the appeal of the ETA. The ETA has appealed the decision. Fertiglobe refinancing On 23 December 2022, Fertiglobe announced that it has refinanced its outstanding USD 900 million bridge facility, originally due in 2024, with new 3-year (USD 300 million) and 5-year (USD 600 million) term facilities with interest rates of SOFR + 150bps and SOFR + 175bps respectively. It further announced that it has increased its revolving credit facility from USD 300 million to USD 600 million and extended the facility's maturity from December 2026 to 2027. The margin on the RCF has been reduced from 175bps to 140bps over SOFR. The execution of both refinancing took place on 4 January 2023. OCI semi-annual cash distribution On 5 January 2023, OCI N.V. announced it confirms a semi-annual cash distribution with respect to H2 2022 of EUR 3.50 per share (or c.USD 780 million at current exchange rates, consisting of a USD 200 million base return of capital and a variable element), in line with the company\u2019s guidance given during the Q3 2022 results publication. OCI N.V. is convening an extraordinary shareholders meeting (EGM) on 16 February 2023 to request for shareholder approval for the H2 2022 distribution of EUR 3.50 per share through a repayment of capital, resulting in a distribution to shareholders scheduled for April 2023. OCI bond issuance On 16 March 2023, OCI N.V. completed a bond offering consisting of USD 600.0 million senior unsecured fixed rate notes due 2033 as part of a USD 2.0 billion global medium term program. The notes bear interest at a rate of 6.7% per annum. The notes are senior unsecured obligations of the Company and are guaranteed by IFCo. Interest will be payable semi-annually. The proceeds from the offering will be used for general corporate purposes of the Group. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-481": { "value": " 33 External auditors\u2019 fee The service fees recognized in the financial statements 2022 for the service of KPMG amounted to USD 5.2 million (2021: USD 5.8 million). Other assurance services provided to the Group include services related to bond offerings, voluntary audit of other financial statements, agreed upon procedures related to covenant reporting and other statutory requirements. The amounts per service category are shown in the following table: \u00a0Total service fee of which KPMG Accountants N.V. (The Netherlands) $ millions 2022 2021 2022 2021 Audit of group financial statements 4.3 4.6 2.4 2.6 Other assurance services 0.8 1.1 0.7 0.3 Total assurance services 5.1 5.7 3.1 2.9 Tax services 0.1 0.1 - - Total 5.2 5.8 3.1 2.9 ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-482": { "value": " 34 List of principal subsidiaries as at 31 December 2022 Companies Country Percentage of interest Consolidation method Fertiglobe plc UAE 50.00 Full OCI Fuels B.V. The Netherlands 85.00 Full OCI Methanol Marketing B.V. The Netherlands 85.00 Full OCI Nitrogen B.V. The Netherlands 100.00 Full BioMCN B.V. The Netherlands 85.00 Full Iowa Fertilizer Company LLC United States 100.00 Full OCI USA Inc. United States 85.00 Full OCI Partners LP / OCI Beaumont LLC United States 85.00 Full N-7 LLC United States 50.00 Full OCI Methanol Marketing LLC United States 85.00 Full Key subsidiaries held via Fertiglobe plc \u00a0\u00a0\u00a0Ruwais Fertilizer Industries LLC (Fertil) UAE 100.00 Full Egypt Basic Industries Corporation S.A.E. Egypt 75.00 Full Egyptian Fertilizers Company S.A.E. Egypt 99.96 Full Sorfert Alg\u00e9rie Spa Algeria 50.99 Full Orascom Construction Industries S.A.E. Egypt 99.96 Full Fertiglobe Distribution Limited UAE 100.00 Full OCI Fertilizer Trade and Supply B.V. The Netherlands 100.00 Full Fertiglobe Fertilizer Trading Limited BVI 100.00 Full A full list of affiliated companies will be available for public inspection at the Commercial Registry in conformity with the provisions of Article 2:379 and 2:414 of the Dutch Civil Code. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300NCMRGIBJYUOE57", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-483": { "value": "$ millions | Note | 31 December 2022 | 31 December 2021 |
|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 |
Non-current assets | \u00a0 | \u00a0 | \u00a0 |
Investment in subsidiaries | (41) | 7,896.0 | 8,480.7 |
Property, plant and equipment | \u00a0 | 6.5 | 1.9 |
Right-of-use assets | \u00a0 | 2.6 | 3.1 |
Other receivables | (42) | 651.4 | 703.5 |
Financial assets at fair value through other comprehensive income | (43) | 2.3 | 2.8 |
Deferred tax assets | (54) | 0.3 | 5.5 |
Total non-current assets | \u00a0 | 8,559.1 | 9,197.5 |
Current assets | \u00a0 | \u00a0 | \u00a0 |
Inventories | (44) | - | 21.9 |
Other receivables | (42) | 215.1 | 220.4 |
Cash and cash equivalents | (45) | 154.8 | 179.5 |
Total current assets | \u00a0 | 369.9 | 421.8 |
Total assets | \u00a0 | 8,929.0 | 9,619.3 |
Equity | \u00a0 | \u00a0 | \u00a0 |
Share capital | 5.6 | 5.6 | |
Share premium | 5,261.7 | 6,316.3 | |
Reserves | (2,263.5) | (1,820.4) | |
Retained earnings | \u00a0 | 4,101.1 | 2,773.4 |
Total equity | \u00a0 | 7,104.9 | 7,274.9 |
Liabilities | \u00a0 | \u00a0 | \u00a0 |
Non-current liabilities | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (47) | 663.5 | 1,124.1 |
Lease obligations | \u00a0 | 2.1 | 2.6 |
Deferred tax liabilities | (54) | - | - |
Total non-current liabilities | \u00a0 | 665.6 | 1,126.7 |
Current liabilities | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (47) | 991.5 | 995.3 |
Lease obligations | \u00a0 | 0.8 | 0.6 |
Income tax payable | (54) | 5.9 | - |
Trade and other payables | (48) | 160.3 | 221.8 |
Total current liabilities | \u00a0 | 1,158.5 | 1,217.7 |
Total liabilities | \u00a0 | 1,824.1 | 2,344.4 |
Total equity and liabilities | \u00a0 | 8,929.0 | 9,619.3 |
The notes on pages to are an integral part of these parent company financial statements.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Revenue from dividend income | (49) | 1,300.0 | 1,322.2 |
Other income | (51) | 143.7 | 1,417.9 |
General and administrative expenses | (50) | (51.0) | (36.6) |
Other expenses | (52) | (22.8) | (40.6) |
Operating profit | \u00a0 | 1,369.9 | 2,662.9 |
Finance income | (53) | 133.3 | 168.8 |
Finance cost | (53) | (186.6) | (363.5) |
Net finance cost | \u00a0 | (53.3) | (194.7) |
Profit before income tax | \u00a0 | 1,316.6 | 2,468.2 |
Income tax | (54) | 31.9 | 31.9 |
Net profit | \u00a0 | 1,348.5 | 2,500.1 |
Other comprehensive income: | \u00a0 | \u00a0 | \u00a0 |
Items that are or may be reclassified subsequently to profit or loss | \u00a0 | \u00a0 | \u00a0 |
Currency translation differences | (46) | (441.7) | (463.6) |
Items that will not be reclassified to profit or loss | \u00a0 | \u00a0 | \u00a0 |
Changes in the fair value of financial assets at fair value through other comprehensive income | \u00a0 | (0.5) | 0.1 |
Other comprehensive income, net of tax | \u00a0 | (442.2) | (463.5) |
Total comprehensive income | \u00a0 | 906.3 | 2,036.6 |
The notes on pages to are an integral part of these parent company financial statements.
$ millions | Note | Share capital | Share premium | Fair value reserve | Currency translation | Other reserves | Retained earnings | Equity attributable to owners of the company |
|---|---|---|---|---|---|---|---|---|
Balance at 1 January 2021 | \u00a0 | 5.6 | 6,316.3 | (1.5) | (1,242.2) | (117.0) | 269.6 | 5,230.8 |
Net profit | (46.2) | - | - | - | - | - | 2,500.1 | 2,500.1 |
Other comprehensive income | \u00a0 | - | - | 0.1 | (463.6) | - | - | (463.5) |
Total comprehensive income | \u00a0 | - | - | 0.1 | (463.6) | - | 2,500.1 | 2,036.6 |
Treasury shares sold / delivered | - | - | - | - | 4.8 | (4.8) | - | |
Treasury shares acquired | - | - | - | - | (1.0) | - | (1.0) | |
Share-based payments | - | - | - | - | - | 8.5 | 8.5 | |
Balance at 31 December 2021 | \u00a0 | 5.6 | 6,316.3 | (1.4) | (1,705.8) | (113.2) | 2,773.4 | 7,274.9 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net profit | (46.2) | - | - | - | - | - | 1,348.5 | 1,348.5 |
Other comprehensive income | \u00a0 | - | - | (0.5) | (441.7) | - | - | (442.2) |
Total comprehensive income | \u00a0 | - | - | (0.5) | (441.7) | - | 1,348.5 | 906.3 |
Share capital increase | 1,083.0 | (1,083.0) | - | - | - | - | - | |
Share capital decrease | (13.9) | 13.9 | - | - | - | - | - | |
Capital repayment | (1,069.1) | - | - | - | - | - | (1,069.1) | |
Issuing shares | - | 14.5 | - | - | (14.5) | - | - | |
Dividend payment | - | - | - | - | - | (14.4) | (14.4) | |
Treasury shares sold / delivered | - | - | - | - | 15.6 | (15.6) | - | |
Treasury shares acquired | - | - | - | - | (2.0) | - | (2.0) | |
Share-based payments | - | - | - | - | - | 9.2 | 9.2 | |
Balance at 31 December 2022 | \u00a0 | 5.6 | 5,261.7 | (1.9) | (2,147.5) | (114.1) | 4,101.1 | 7,104.9 |
The notes on pages to are an integral part of these parent company financial statements.
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Net profit | (46.2) | 1,348.5 | 2,500.1 |
Adjustments for: | \u00a0 | \u00a0 | \u00a0 |
Depreciation | (50) | 0.9 | 0.9 |
Interest income | (53) | (39.5) | (70.3) |
Interest expense | (53) | 62.4 | 160.9 |
Net foreign exchange (gain) / loss | (53) | 30.4 | 104.1 |
Revenue from dividend income | (49) | (1,300.0) | (1,322.2) |
Reversal of impairment of subsidiaries | (51) | (143.1) | (1,417.7) |
Equity-settled share-based payment transactions | 9.2 | 8.5 | |
Income tax expense | (54) | (31.9) | (31.9) |
Changes in: | \u00a0 | \u00a0 | \u00a0 |
Inventories | (44) | 21.9 | (21.9) |
Other receivables | (42) | (99.0) | (106.4) |
Trade and other payables | (48) | 32.4 | 4.7 |
Cash flows: | \u00a0 | \u00a0 | \u00a0 |
Interest paid | \u00a0 | (39.4) | (175.4) |
Settlement interest derivatives | \u00a0 | 25.0 | - |
Interest received | \u00a0 | 19.8 | 58.5 |
Dividends received | \u00a0 | 1,300.0 | 1,322.2 |
Cash flow from operating activities | \u00a0 | 1,197.6 | 1,014.1 |
Investments in intangible fixed assets | \u00a0 | (5.1) | (1.1) |
Capital repayment from subsidiaries | (41) | 250.0 | - |
Capital contributions to subsidiaries | (41) | - | (261.4) |
Cash flow from / (used in) investing activities | \u00a0 | 244.9 | (262.5) |
Purchase of treasury shares | (0.2) | (1.0) | |
Proceeds from borrowings | (47) | - | 909.2 |
Proceeds from borrowings from subsidiaries | (47) | 493.8 | 600.6 |
Repayment of borrowings | (47) | (406.2) | (2,401.2) |
Repayment of borrowings from subsidiaries | (47) | (105.9) | (8.0) |
Newly incurred transaction costs / call premium | (47) | (7.5) | (0.1) |
Distributions paid to owners of the Company | (1,059.0) | - | |
Witholding tax on dividends to owners the Company | (2.2) | - | |
Settlement FX derivatives | (53) | (30.5) | (72.8) |
Payment of lease obligations | \u00a0 | (0.7) | (0.7) |
Cash flows used in financing activities | \u00a0 | (1,118.4) | (974.0) |
Net cash flow | \u00a0 | 324.1 | (222.4) |
Net increase / (decrease) in cash and cash equivalents | \u00a0 | 324.1 | (222.4) |
Cash and cash equivalents at 1 January | \u00a0 | (203.5) | 14.2 |
Effect of exchange rate fluctuations on cash held | \u00a0 | 34.2 | 4.7 |
Cash and cash equivalents at 31 December | \u00a0 | 154.8 | (203.5) |
Cash and cash equivalents in statement of financial position | (45) | 154.8 | 179.5 |
Bank overdraft repayable on demand | (47) | - | (383.0) |
Cash and cash equivalents in statement of cash flows | \u00a0 | 154.8 | (203.5) |
The notes on pages to are an integral part of these parent company financial statements.
OCI N.V. (\u2018The Company\u2019 or \u2018OCI\u2019) was established on 2 January 2013 as a public limited liability company incorporated under Dutch law, with its head office located at Honthorststraat 19, Amsterdam, the Netherlands. OCI is registered in the Dutch commercial register under no. 56821166 dated 2 January 2013. OCI is a holding company and is tax resident in the Netherlands.
The parent company financial statements have been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (IFRS-EU). The parent company financial statements have been prepared on the historical cost basis, except when otherwise indicated.
The financial year of OCI commences on 1 January and ends on 31 December. The Company\u2019s functional currency is the Euro (\u2018EUR\u2019). Because the Company\u2019s major foreign operations have the US dollar as their functional currency, the presentation currency of the Company is the US dollar (\u2018USD\u2019). All values are rounded to the nearest tenth million (in millions of USD), except when stated otherwise.
The parent company financial statements have been authorized for issue by the Company\u2019s Board of Directors on 22 March 2023. The financial statements are subject to adoption of the Annual General Meeting of Shareholders.
In the parent company financial statements, the same accounting policies have been applied as set out in the notes to the consolidated financial statements, except for the measurement of the subsidiaries as presented under \u2018Investments in subsidiaries\u2019 in the parent company financial statements. These policies have been consistently applied to all years presented.
For the amendments that became applicable and the new standards not yet applicable to OCI, reference is made to note 4.2 of the consolidated financial statements.
These policies have been consistently applied to all years presented.
In the parent company financial statements, investments in subsidiaries are recorded at cost less impairment. In the parent company statement of profit or loss and other comprehensive income, dividend received from investments in subsidiaries is recorded as dividend income.
Due to this application, the parent company equity and net result are not equal to the consolidated equity and net result. A reconciliation for total equity attributable to owners of the company and total comprehensive income is presented in note 46 to the parent company financial statements.
Capital repayments to the Company\u2019s shareholders are recognized as a liability in the parent company financial statements, in the period in which the distribution is approved by the Company\u2019s shareholders and the creditor opposition period has lapsed.
Dividend distributions to the Company\u2019s shareholders are recognized as a liability in the parent company financial statements, in the period in which the distribution is approved by the Company\u2019s shareholders.
Dividend income from the Company\u2019s subsidiaries is recognized when the right to receive payment is established. Dividend income is presented as revenue in the statement of profit or loss and comprehensive income and as operating activities in the statement of cash flows.
The preparation of the parent company financial statements requires management to exercise judgment and make estimates and assumptions that affect the application of the Company\u2019s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company financial statements are the impairment of the investments in subsidiaries.
At each balance sheet date, the Company reviews whether there is an indication that its investments in subsidiaries might be impaired.
An indication for impairment of the investments in subsidiaries may include, respectively, management\u2019s downward adjustment of the strategic plan. Further indications for impairments of its investments may include other areas where observable data indicates that there is a measurable decrease in the estimated future cash flows. These determinations require significant judgment. In making this judgment, management evaluates, among other factors, the financial performance of and business outlook for its investments, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.
If any indication for impairment exists, the recoverable amount of the investments is estimated in order to determine the extent, if any, of the impairment loss. An investment is impaired if the recoverable amount is lower than the carrying amount. The recoverable amount is defined as the higher of an investment\u2019s fair value less costs to sell and its value in use. The investments\u2019 fair value less costs to sell represents the best estimate of the amount OCI would receive if it sold its investments. The determination of the investment\u2019s value in use is based on calculations using pre-tax cash flow projections based on financial budgets approved by management covering a 5-year period and the terminal value period.
If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying amount of the investment is reduced to its recoverable amount. Any impairment loss is recognized immediately in the statement of profit or loss.
Impairment losses recognized in prior periods shall be reversed only if there has been a change in the estimates or external market information used to determine the investment\u2019s recoverable amount since the last impairment loss was recognized. The recoverable amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognized in prior years.
Reference is made to note 6 Financial risk and capital management in the notes to the consolidated financial statements.
The maximum exposure to credit risk at the reporting date is as follows:
$ millions | Note | 2022 | 2021 |
|---|---|---|---|
Other receivables | (42) | 866.5 | 923.9 |
Financial assets at fair value through other comprehensive income | (43) | 2.3 | 2.8 |
Cash and cash equivalents | (45) | 154.8 | 179.5 |
Total | \u00a0 | 1,023.6 | 1,106.2 |
The maximum exposure to credit risk for other receivables by geographic region is as follows:
$ millions | 2022 | 2021 |
|---|---|---|
Middle East and Africa | 5.7 | 0.5 |
Europe | 150.1 | 112.1 |
Americas | 710.7 | 811.3 |
Total | 866.5 | 923.9 |
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
31 December 2022 | Note | Carrying amount | Contractual cash flow | Less than 1 year | Between 1 and 5 years | More than 5 years |
|---|---|---|---|---|---|---|
Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (47) | 663.5 | 755.8 | 27.3 | 728.5 | - |
Loans and borrowings from subsidiaries\u00b9 | (47) | 991.5 | 991.5 | 991.5 | - | - |
Trade and other payables | (48) | 160.3 | 160.3 | 160.3 | - | - |
Total | \u00a0 | 1,815.3 | 1,907.6 | 1,179.1 | 728.5 | - |
31 December 2021 | Note | Carrying amount | Contractual cash flow | Less than 1 year | Between 1 and 5 years | More than 5 years |
|---|---|---|---|---|---|---|
Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings | (47) | 1,507.1 | 1,644.3 | 419.2 | 1,225.1 | - |
Loans and borrowings from subsidiaries1 | (47) | 612.3 | 612.3 | 612.3 | - | - |
Trade and other payables | (48) | 221.8 | 221.8 | 221.8 | - | - |
Total | \u00a0 | 2,341.2 | 2,478.4 | 1,253.3 | 1,225.1 | - |
OCI N.V. leases office space and vehicles. The office space lease at Honthorststraat is renewed in 2021 for a period of 5 years, with an option to renew the lease thereafter. The office space at Willemsparkweg is leased in 2021 for an initial period of 5 years, with an option to renew the lease thereafter. Lease payments are indexed annually.
$ millions | 2022 | 2021 |
|---|---|---|
Less than one year | 0.8 | 0.8 |
Between one and five years | 2.1 | 2.8 |
More than five years | - | - |
Total | 2.9 | 3.6 |
As part of the preparation of the financial statements, the Company has assessed its liquidity risk. Liquidity risk is the risk that the Company may encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company has made a number of assumptions in assessing its ability to meet its covenant requirements and satisfy obligations as they become due. Determining these assumptions requires significant judgment about future results and cash flows. Key assumptions include product pricing, gas pricing, utilization rates, and the ability to arrange financing and obtain waivers for anticipated covenant breaches. Refer to note 6.2 and note 18 of the notes to the consolidated financial statements for the Company\u2019s analyses of liquidity risk and debt covenants, respectively.
Furthermore, the Company\u2019s financial liabilities include loans and borrowings from subsidiaries. Although these loans and borrowings from subsidiaries are sometimes classified as short-term due the contractual terms, the repayment date of these loans and borrowings can be controlled and determined by OCI and may be extended beyond one year.
As at 31 December 2022, if the US dollar had weakened / strengthened by 5 percent against the Euro with all other variables held constant, the translation of foreign currency receivables, payables, cash and cash equivalents and loans and borrowings would have resulted in an increase / decrease of USD 0.1 million of the profit of the year.
The summary of quantitative data about the Company\u2019s exposure to foreign exchange transaction exposure based on risk management policy for the main currencies was as follows:
$ millions | 2022 | 2021 |
|---|---|---|
Other receivables | 765.9 | 838.4 |
Trade and other payables | (24.7) | (124.3) |
Loans and borrowings | (758.7) | (1,261.0) |
Cash and cash equivalents | 19.0 | 53.0 |
The following tables demonstrate the sensitivity to a reasonably possible change in EUR-USD exchange rates, with all other variables held constant. The impact on the Company\u2019s general and administrative expenses is due to changes in the fair value of monetary assets and liabilities, including inter-company positions. The Company\u2019s exposure to foreign currency changes for all other currencies is not material.
31 December 2022 | Change in FX rate | Effect on profit before tax | Effect on equity |
|---|---|---|---|
EUR - USD | 5 percent | 0.1 | - |
| \u00a0 | (5) percent | (0.1) | - |
31 December 2021 | Change in FX rate | Effect on profit before tax | Effect on equity |
|---|---|---|---|
EUR - USD | 5 percent | (24.7) | - |
| \u00a0 | (5) percent | 24.7 | - |
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Company\u2019s profit before tax is affected through the impact on floating rate borrowings plus refinancing of fixed rate borrowings, as follows:
$ millions | In basis points | 2022 | 2021 |
|---|---|---|---|
Effect on profit before tax for the coming year | + 100 bps | - | (4.0) |
| \u00a0 | - 100 bps | - | 4.0 |
Natural gas is one of the primary raw materials used in the OCI\u2019s production processes. The Company is exposed to natural gas price commodity risk for those entities that buy natural gas at spot prices. Management monitors the development of gas prices and products\u2019 selling prices on a daily basis using external historical and forecast market data provided by several data vendors. Management analyzes the potential profit margin per product based on these data in order to make operational and hedging decisions.
The Company enters into gas hedges on behalf of subsidiaries, in order to hedge future gas price levels over a certain period of time. The Company uses derivatives (Basis swaps, Index swaps and options) in order to do so and does not apply hedge accounting on these instruments, therefore all fair value changes related to these financial instruments are recognized in profit or loss. OCI N.V. is a participating entity in several hedge strategies of the Group. For the hedge strategies reference is made to note 6.3.
Several subsidiaries of OCI N.V. receive European Emission Allowances (\u201cEUAs\u201d) as a result of their industrial activities in the Netherlands. The EUAs are granted annually in advance by the Dutch Emission Authority. The amount of EUAs granted is based on an estimate of CO2 emissions in the Netherlands and the effective European emission legislation. In arrears, the subsidiaries have to refund allowances to the Dutch Emission Authority based on actual CO2 emissions during the year. In the event that a deficit in EUAs is identified, the subsidiaries have to purchase additional EUAs on the commodity markets to settle its liability to the Dutch Emission Authority.
During the year, OCI N.V. has generated additional liquidity by selling its EUAs to the market. To manage the price exposure on the liability towards the Dutch Emission Authority, OCI N.V. entered into financial hedges to purchase EUAs. For further information reference is made to note 6.3.
For the fair value of the commodity derivatives reference is made to note 42.
The following table presents the various categories of financial instruments:
31 December 2022 | Note | Loans and receivables / payables at amortized cost | Assets / liabilities at fair value | Financial assets at fair value through other comprehensive income |
|---|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other receivables | (42) | 852.9 | 13.6 | - |
Financial assets at fair value through other comprehensive income | (43) | - | - | 2.3 |
Cash and cash equivalents | (45) | 154.8 | - | - |
Total | \u00a0 | 1,007.7 | 13.6 | 2.3 |
Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings from third parties | (47) | 663.5 | - | - |
Loans and borrowings from subsidiaries | (47) | 991.5 | - | - |
Trade and other payables | (48) | 132.6 | 27.7 | - |
Total | \u00a0 | 1,787.6 | 27.7 | - |
31 December 2021 | Note | Loans and receivables / payables at amortized cost | Assets / liabilities at fair value | Financial assets at fair value through other comprehensive income |
|---|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other receivables | (42) | 881.1 | 42.8 | - |
Financial assets at fair value through other comprehensive income | (43) | - | - | 2.8 |
Cash and cash equivalents | (45) | 179.5 | - | - |
Total | \u00a0 | 1,060.6 | 42.8 | 2.8 |
Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Loans and borrowings from third parties | (47) | 1,507.1 | - | - |
Loans and borrowings from subsidiaries | (47) | 612.3 | - | - |
Trade and other payables | (48) | 213.0 | 8.8 | - |
Total | \u00a0 | 2,332.4 | 8.8 | - |
The only financial instrument carried at fair value by the Company is the financial asset at fair value through other comprehensive income which is measured with hierarchy level 1 of the fair value hierarchy category.
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | 8,480.7 | 7,207.0 |
Reversal of impairment | 143.1 | 1,417.7 |
Capital contribution | - | 431.9 |
Capital repayments | (250.0) | - |
Exchange rate differences | (477.8) | (575.9) |
At 31 December | 7,896.0 | 8,480.7 |
In 2022 a capital repayment of USD 250 million in cash was made by OCI Intermediate B.V.
An impairment reversal trigger was identified in OCI N.V.'s investment in subsidiaries due to an increase in share price as at 31 December 2022 compared to 2021. As a result, the Group has prepared an impairment test on the investment in subsidiaries in accordance with IAS 36. An impairment reversal is recognized if the estimated recoverable amount of an asset exceeds its carrying amount.
The recoverable amount has been estimated based on fair value less cost of disposal. Key elements for the determination of fair value were the 14 days trailing share price of OCI N.V. as at 31 December 2022 of USD 36.61 (which is measured with hierarchy level 1 of the fair value hierarchy category), the number of outstanding shares of OCI N.V. (210,712,004 shares) and a control premium of 30%, which is the median bid premium for the acquisitions of Dutch listed companies in the period 2010 - 2020 based on the price paid over and above the trading share price to obtain control and determined to be a reasonable control premium for listed companies. The costs of disposal are assumed to be limited and included in the control premium assumption. This results in a recoverable amount of USD 10,029 million.
The recoverable amount of OCI Intermediate B.V. (which is the total of the investment in subsidiaries, receivables from subsidiaries and the loans and borrowings) exceeded the carrying amount of the investment. As a result, an impairment reversal of USD 143.1 million is recognized in the Parent company statement of Profit or Loss and Other Comprehensive Income. The accumulated impairment as at 31 December 2022 amounts to nil.
List of subsidiaries as at 31 December 2022:
Name | Country of incorporation | Ownership % |
|---|---|---|
OCI Intermediate B.V. | The Netherlands | 100.0 |
OCI UK Ltd. | United Kingdom | 100.0 |
OCI Intermediate B.V. is a holding company which has all operating companies as subsidiaries.
$ millions | 2022 | 2021 |
|---|---|---|
Receivables from subsidiaries | 837.7 | 877.9 |
Commodity derivatives | 11.0 | 42.8 |
Foreign currency derivatives | 2.6 | - |
Other receivables | 15.2 | 3.2 |
Total | 866.5 | 923.9 |
Non-current | 651.4 | 703.5 |
Current | 215.1 | 220.4 |
At 31 December | 866.5 | 923.9 |
The carrying amount of receivables approximates their fair value.
The assessment of the expected credit losses did not result in an impairment of receivables. This will be monitored on a continuous basis going forward and periodically reassessed.
Specification of receivables from subsidiaries:
$ millions | Type | Interest % | 2022 | 2022 | 2021 | 2021 |
|---|---|---|---|---|---|---|
Iowa Intermediate Fertilizer Holding Corp | Unsecured | 5.2% fixed | - | - | 40.6 | - |
Iowa Intermediate Fertilizer Holding Corp | Unsecured | 5.2% fixed | 635.7 | - | 662.9 | - |
Iowa Intermediate Fertilizer Holding Corp | Unsecured | 5.1% fixed | - | - | - | 104.7 |
Other receivables subsidiaries | - | - | 15.5 | 186.5 | - | 69.7 |
Total | \u00a0 | \u00a0 | 651.2 | 186.5 | 703.5 | 174.4 |
$ millions | 2022 | 2021 |
|---|---|---|
Orascom Construction Limited (Dubai) | 2.3 | 2.8 |
Total | 2.3 | 2.8 |
Orascom Construction Limited is a related party.
$ millions | 2022 | 2021 |
|---|---|---|
European Emission Allowances | - | 21.9 |
Total | - | 21.9 |
During 2022, OCI N.V. sold all of its European Emission Allowances.
$ millions | 2022 | 2021 |
|---|---|---|
Bank balances | 154.8 | 179.5 |
Total | 154.8 | 179.5 |
The bank balances are freely available for usage and are not restricted.
$ millions | 2022 Equity | 2022 Profit / Loss | 2021 Equity | 2021 Profit / Loss |
|---|---|---|---|---|
Consolidated equity attributable to owners of the Company | 2,323.7 | 1,179.6 | 1,999.0 | 521.1 |
Revaluation of subsidiaries | 5,472.8 | 143.1 | 5,329.7 | 1,417.7 |
Difference gain on demerger 2015 | (387.8) | - | (387.8) | - |
Difference in profit or loss | 2,744.5 | (32.0) | 2,776.5 | 511.9 |
Other comprehensive income | (1,928.0) | (384.4) | (1,543.6) | (414.1) |
Business combination Fertiglobe | (723.1) | - | (723.1) | - |
Other direct equity movements (including impact IFRS 9 adoption) | (397.2) | - | (175.8) | - |
Parent company equity attributable to owners | 7,104.9 | 906.3 | 7,274.9 | 2,036.6 |
The differences between total shareholders\u2019 equity and total comprehensive income according to the consolidated financial statements and the parent company financial statements in general relate to the accounting of investments at cost (fair value as deemed cost upon adoption of IFRS) in the parent company financial statements and subsequent impairments.
The reconciling items for equity and income are further detailed below.
The revaluation of subsidiaries of USD 5,472.8 million relates to the step up in fair value at the date of transition to IFRS, 1 January 2014. The revaluation reserve related to the deemed cost value step-up of the subsidiaries was subsequently converted into share capital and partly distributed as part of the demerger transaction of OCI\u2019s E&C Business.
The Company recorded a reversal of impairment taken in previous year on subsidiaries of USD 143.1 million in 2022 (2021: USD 1,417.7 million).
In the 2015 parent company financial statements, the demerger gain of USD 243.0 million is lower compared to the demerger gain as reported in the consolidated financial statements of USD 630.8 million as the investment is stated at cost in the parent company financial statements versus the equity value in the 2015 consolidated financial statements.
The 2022 net result is USD 32.0 million lower in the parent company financial statements as the net gain for 2022 is USD 1,348.5 million (including reversal of the impairment taken in previous year in subsidiaries of USD 143.1 million), whereas the net gain attributable to owners of the company in the consolidated financial statements was USD 1,237.4 million.
The 2021 net result is USD 511.9 million higher in the parent company financial statements as the net gain for 2021 is USD 2,500.1 million (mainly driven by partly reversal of the impairment taken in previous year in subsidiaries of USD 1,417.7 million), whereas the net gain attributable to owners of the company in the consolidated financial statements was USD 570.5 million.
The reconciliation item \u2018Other comprehensive income\u2019 represents hedge and currency translation differences which are recognized in the consolidated financial statements but not in the parent company financial statements as the investments are stated at cost.
The 2022 difference in income of USD 384.4 million comprises USD 428.7 million of currency translation gains, USD 44.8 million of losses on cash flow hedges and USD 0.5 million gains on financial asset at fair value through other comprehensive income, which do not occur in the parent company financial statements.
The 2021 difference in income of USD 414.1 million comprises USD 505.8 million of currency translation gains, USD 80.8 million of losses on cash flow hedges and USD 10.9 million losses on financial asset at fair value through other comprehensive income, which do not occur in the parent company financial statements.
In 2021, the Fertiglobe business combination resulted in an increase of USD 723.1 million in equity attributable to the owners of the company in the consolidated financial statements, but had no impact on the parent company.
The other direct equity movements mainly relates to the 15% sale of OCI methanol.
$ millions | 2022 | 2021 |
|---|---|---|
Added to retained earnings | 1,348.5 | 2,500.1 |
Net profit attributable to shareholders | 1,348.5 | 2,500.1 |
Upon adoption of this proposed net profit appropriation, the proposed distribution for the 2022 financial year will be EUR 7.05. Subsequent to the financial year end, the company announced a proposed payment of an interim distribution for the period H2 2022 of EUR 3.50 per share. Refer to note 59 for further details of the subsequent event. This proposed net profit appropriation is in conformity with article 26 of the Company\u2019s Articles of Association.
$ millions | 2022 | 2021 |
|---|---|---|
Senior notes | 669.7 | 727.1 |
Term loan and revolving credit facility | (6.2) | 397.0 |
Bank overdraft facility | - | 383.0 |
Sub-total third-party | 663.5 | 1,507.1 |
OCI Overseas Holding Ltd. | 0.1 | 0.1 |
OCI Nitrogen BV | 525.9 | 466.9 |
OCI Clean Ammonia LLC | 10.7 | - |
Iowa Fertilizer Company | 404.3 | - |
OCI Personnel BV | - | 0.1 |
N7 | 26.5 | 127.5 |
OCI Fertilizers B.V. | 24.0 | 17.7 |
Sub-total subsidiaries | 991.5 | 612.3 |
Total | 1,655.0 | 2,119.4 |
Non-current | 663.5 | 1,124.1 |
Current | 991.5 | 995.3 |
At 31 December | 1,655.0 | 2,119.4 |
Reference is made to note 18 Loans and borrowings of the consolidated financial statements for detailed information on third-party loans and the undrawn bank facility.
The carrying amounts of loans and borrowings from subsidiaries approximates their fair values.
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | 2,119.4 | 2,937.9 |
Proceeds from borrowings | - | 909.2 |
Proceeds from bank overdraft facility | - | 398.4 |
Proceeds from borrowings subsidiaries | 493.8 | 600.6 |
Redemptions of borrowings | (406.2) | (2,401.2) |
Redemptions of bank overdraft facility | (354.8) | - |
Redemptions of borrowings subsidiaries | (105.9) | (8.0) |
Redemptions of borrowings subsidiaries in kind | - | (267.3) |
Newly incurred transaction costs | (7.5) | (0.1) |
Amortization of transaction costs / (bond) premiums | 5.3 | 23.5 |
Effect of movement in exchange rates | (102.3) | (73.8) |
Accrued interest | 13.2 | 0.2 |
At 31 December | 1,655.0 | 2,119.4 |
There were no proceeds from borrowings in 2022 (2021: USD 909.2 million). Reference is made to note 18 of the consolidated financial statements.
Redemptions of borrowings from subsidiaries in kind of USD 267.3 million in 2021 consist of contributions to OCI Chemicals B.V. by settlement of loans.
The maturity dates of loans and borrowings from third-party and related party are as follows:
$ millions | 2022 | 2021 |
|---|---|---|
2022 | - | 383.0 |
2023 | - | 400.0 |
2024 | - | - |
2025 | 673.9 | 733.3 |
Sub-total | 673.9 | 1,516.3 |
Deducted transaction costs | (10.4) | (9.2) |
Total | 663.5 | 1,507.1 |
Specification of loans and borrowings from subsidiaries:
$ millions | Type | Interest % | 2022 | 2021 |
|---|---|---|---|---|
OCI Overseas Holding Ltd. | Unsecured | LIBOR + 3.25 | 0.1 | 0.1 |
OCI Nitrogen | Unsecured | Deposit rate 1.75% | 525.9 | 466.9 |
Iowa Fertilizer Company | Unsecured | Deposit rate 1.75% | 404.3 | - |
OCI Clean Ammonia LLC | Unsecured | Deposit rate 1.75% | 10.7 | - |
N7 | Unsecured | Deposit rate 1.75% | 26.5 | 127.5 |
OCI Fertilizers B.V. | Unsecured | Deposit rate 1.75% | 24.0 | 17.7 |
OCI Personnel B.V. | Unsecured | Deposit rate 1.75% | - | 0.1 |
Total | \u00a0 | \u00a0 | 991.5 | 612.3 |
$ millions | 2022 | 2021 |
|---|---|---|
Payables due to subsidiaries | 110.0 | 192.7 |
Accrued interest | 5.7 | 6.2 |
Commodity derivative financial instruments | 27.7 | 8.8 |
Other current liabilities | 16.9 | 14.1 |
Total | 160.3 | 221.8 |
Non-current | - | - |
Current | 160.3 | 221.8 |
Total | 160.3 | 221.8 |
The carrying amount of \u2018Other payables\u2019 approximates its fair value.
Revenue from dividend income in 2022 consists of USD 1,300.0 million from OCI Intermediate of which USD 1,300.0 million was in cash.
$ millions | 2022 | 2021 |
|---|---|---|
Employee benefit expenses | 23.0 | 21.0 |
Depreciation | 0.9 | 0.9 |
Consultancy expenses | 15.0 | 9.7 |
Other | 12.1 | 5.0 |
Total | 51.0 | 36.6 |
The expenses by nature comprise \u2018general and administrative expenses\u2019.
$ millions | 2022 | 2021 |
|---|---|---|
Wages and salaries | 8.7 | 8.0 |
Social securities | 0.8 | 0.4 |
Employee profit sharing | 2.6 | 3.0 |
Pension cost | 1.7 | 1.1 |
Share-based compensation expense | 9.2 | 8.5 |
Total | 23.0 | 21.0 |
For specifications on share-based payments, reference is made to note 22.3 of the notes to the consolidated financial statements.
$ millions | 2022 | 2021 |
|---|---|---|
Reversal of impairment of subsidiaries | 143.1 | 1,417.7 |
Other | 0.6 | 0.2 |
Total | 143.7 | 1,417.9 |
$ millions | 2022 | 2021 |
|---|---|---|
Other | 22.8 | 40.6 |
Total | 22.8 | 40.6 |
Other expenses relate to recharges from subsidiaries, mainly OCI UK Ltd. Reference is made to note 41 for the impairment of subsidiaries.
$ millions | 2022 | 2021 |
|---|---|---|
Interest income on loans and receivables third-party | 2.8 | 0.1 |
Interest income on loans and receivables subsidiaries | 36.7 | 70.2 |
Foreign exchange gain | 93.8 | 98.5 |
Finance income | 133.3 | 168.8 |
Interest expense and other financing costs on financial liabilities measured at amortized cost third-party | (44.8) | (160.5) |
Interest expense and other financing costs on financial liabilities measured at amortized cost subsidiaries | (17.6) | (0.4) |
Foreign exchange loss | (124.2) | (202.6) |
Finance cost | (186.6) | (363.5) |
Net finance cost recognized in profit or loss | (53.3) | (194.7) |
Foreign exchange loss includes a net loss of USD 2.6 million on foreign exchange derivatives which were settled during the year.
$ millions | 2022 | 2021 |
|---|---|---|
Current tax | 37.1 | 21.4 |
Deferred tax | (5.2) | 10.5 |
Total income tax reported in profit or loss | 31.9 | 31.9 |
$ millions | 2022 | 2021 |
|---|---|---|
Current year | 37.1 | 21.4 |
Changes in estimates relating to prior years | - | - |
Income tax benefit reported in profit or loss | 37.1 | 21.4 |
$ millions | 2022 | 2021 |
|---|---|---|
Origination and reversal of temporary differences | (5.2) | 0.3 |
Changes in tax rates | - | 1.0 |
Recognition of previously unrecognized losses | - | 9.2 |
Income tax benefit reported in profit or loss | (5.2) | 10.5 |
Reconciliation of the statutory income tax rate in the Netherlands with the effective tax rate can be summarized as follows:
$ millions | 2022 | % | 2021 | % |
|---|---|---|---|---|
Profit before income tax | 1,316.6 | \u00a0 | 2,468.2 | \u00a0 |
Enacted income tax rate in the Netherlands | 25.8% | \u00a0 | 25.0% | \u00a0 |
Income tax expense calculated at the enacted Dutch tax rate | (340.0) | (25.8) | (617.0) | (25.0) |
Reversal of impairment of subsidiaries | 36.9 | 2.8 | 354.4 | 14.4 |
Expenses non-deductible | (4.8) | (0.4) | (46.3) | (1.8) |
Income not subject to tax | 335.1 | 25.5 | 330.6 | 13.3 |
Change in income tax rates | - | - | 1.0 | - |
Recognition of previously unrecognized tax assets | 4.7 | 0.4 | 9.2 | 0.4 |
Total income tax reported in profit or loss | 31.9 | 2.5 | 31.9 | 1.3 |
Changes in deferred tax assets and liabilities:
$ millions | 2022 | 2021 |
|---|---|---|
At 1 January | 5.5 | (1.2) |
Profit or loss | (5.2) | 10.5 |
Effect of movement in exchange rates | - | - |
Other | - | (3.8) |
At 31 December | 0.3 | 5.5 |
Other relates to change of position from net operating losses being capitalized on the balance sheet in 2019 to creating a valuation allowance for a deferred tax asset in relation to the operating losses.
Recognized deferred tax assets and liabilities:
| \u00a0 | Assets | Liabilities | Net | |||
|---|---|---|---|---|---|---|
$ millions | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
Trade and other receivables | - | - | (0.3) | (0.3) | (0.3) | (0.3) |
Loans and borrowings | - | - | - | (0.6) | - | (0.6) |
Trade and other payables | 0.6 | - | - | - | 0.6 | - |
Operating losses carry forward and tax credits | - | 6.4 | - | - | - | 6.4 |
At 31 December | 0.6 | 6.4 | (0.3) | (0.9) | 0.3 | 5.5 |
Netting of fiscal positions | (0.3) | (0.9) | 0.3 | 0.9 | - | - |
Amounts recognized in the Statement of Financial Position | 0.3 | 5.5 | - | - | 0.3 | 5.5 |
Of the deferred tax liabilities at 31 December 2022, no amount is to be settled within 12 months.
The Company has unrecognized carry forward tax losses related to interest deduction limitations, which can be summarized as follows:
2022 | Less than 1 year | Between 1 and 5 years | Between 5 and 10 years | Between 10 and 15 years | Between 15 and 20 years | Unlimited | Total |
|---|---|---|---|---|---|---|---|
Gross federal tax losses | - | - | - | - | - | 218.0 | 218.0 |
Unrecognized operating losses carry forward | - | - | - | - | - | 218.0 | 218.0 |
2021 | Less than 1 year | Between 1 and 5 years | Between 5 and 10 years | Between 10 and 15 years | Between 15 and 20 years | Unlimited | Total |
|---|---|---|---|---|---|---|---|
Gross federal tax losses | - | - | - | - | - | 211.0 | 211.0 |
Unrecognized operating losses carry forward | - | - | - | - | - | 211.0 | 211.0 |
For an overview of the related parties, reference is made to note 30 of the consolidated financial statements. The Company has the following current account related party balances as at 31 December 2022:
Related party | Relation | Revenue during the year | AR at year end | Purchases during the year | AP at year end |
|---|---|---|---|---|---|
Orascom Construction Egypt | OC Group company | - | - | 0.1 | 0.1 |
Residencia Europe Ltd | Related via shareholder | 1.0 | 0.6 | - | - |
Nassef Sawiris | Executive chair | - | - | 0.9 | 0.5 |
NNS Luxembourg Sarl | Related via shareholder | - | - | - | - |
Total | \u00a0 | 1.0 | 0.6 | 1.0 | 0.6 |
The Company has the following current account related party balances as at 31 December 2021:
Related party | Relation | Revenue during the year | AR at year end | Purchases during the year | AP at year end |
|---|---|---|---|---|---|
Orascom Construction Egypt | OC Group company | - | - | 0.3 | - |
Residencia Europe Ltd | Related via shareholder | 0.6 | 0.2 | - | - |
Nassef Sawiris | Executive chair | - | - | 0.7 | 0.4 |
NNS Luxembourg Sarl | Related via shareholder | - | - | 0.2 | - |
Total | \u00a0 | 0.6 | 0.2 | 1.2 | 0.4 |
The current accounts consist of management fees, transferred cost and other. Nassef Sawiris has also received his share in distributions by the Company in respect of his shareholding.
All outstanding related party balances are unsecured.
OCI has provided financial guarantees to certain subsidiaries including OCIN related to its inventory financing. For BioMCN and OMM B.V. a comfort letter was provided by OCI.
The Company has a commited guarantee facility with Rabobank for a maximum guarantee amount of EUR 300.0 million (USD 321.3 million). Under this guarantee facility, EUR 58.4 million (USD 62.6 million) has been utilized. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes.
OCI has an uncommitted guarantee facility with Tokio Marine Europe SA, Z\u00fcrich Insurance plc and Huler Hermes SA for a maximum guarantee amount of EUR 150.0 million (USD 160.7 million). Under this guarantee facility, EUR 79.1 million (USD 84.7 million) has been drawn. The facility is used to issue a performance guarantee on behalf of OCIN.
OCI has an uncommitted guarantee facility for the issuance of payment undertakings with BNP Paribas for an amount of USD 53.7 million. The facility is utilized for USD 5.5 million. The facility is used to issue guarantees on behalf of the subsidiaries, mainly for operational purposes.
The total number of employees in 2022 was 76 (2021: 44 employees).
OCI N.V. forms a fiscal unity with several Dutch entities for corporation tax purposes. In accordance with the standard conditions, a company and its subsidiaries that form the fiscal unity are jointly and severally liable for taxation payable by the fiscal unity. The following entities are included in the fiscal unity headed by OCI N.V.:
OCI N.V.
OCI Intermediate B.V.
OCI Nitrogen B.V.
OCI Personnel B.V.
OCI Terminal Europoort B.V.
OCI Fertilizers B.V.
OCI China Holding B.V.
On 5 January 2023, OCI N.V. announced it confirms a semi-annual cash distribution with respect to H2 2022 of EUR 3.50 per share (or c.USD 780 million at current exchange rates, consisting of a USD 200 million base return of capital and a variable element), in line with the company\u2019s guidance given during the Q3 2022 results publication. OCI N.V. convened an extraordinary shareholders meeting (EGM) on 16 February 2023 to request for shareholder approval for the H2 2022 distribution of EUR 3.50 per share through a repayment of capital, resulting in a distribution to shareholders scheduled for April 2023.
On 16 March 2023, OCI N.V. completed a bond offering consisting of USD 600.0 million senior unsecured fixed rate notes due 2033 as part of a USD 2.0 billion global medium term program. The notes bear interest at a rate of 6.7% per annum. The notes are senior unsecured obligations of the Company and are guaranteed by IFCo. Interest will be payable semi-annually. The proceeds from the offering will be used for general corporate purposes of the Group.
Amsterdam, the Netherlands, 22 March 2023
Michael Bennett
Nassef Sawiris
Ahmed El-Hoshy
Hassan Badrawi
Maud de Vries
Sipko Schat
J\u00e9r\u00f4me Guiraud
Robert Jan van de Kraats
Gregory Heckman
Anja Montijn-Groenewoud
David Welch
Dod Fraser
Heike van de Kerkhof