Grupa Azoty Stock

Good morning, everyone, and welcome to the earnings call which will be devoted to the discussion of financial performance of the financial and operational performance of Grupa Azoty Second Quarter 2026. This is an online earnings call, and we will remind you that.

First, the speakers will present the key facts and figures the operational and financial performance and then we go on to the Q&A session. As usual, you will be able to ask your question questions in the chat.

Today's conference -- today's earnings call will be held by Marcin Celejewski, President of Management Board CEO; and Mr. Jacek Podgorski, Vice President.

Ladies and gentlemen, everyone, welcome to the earnings call, which is devoted to our results after the quarter of 2026.

While we start discussing our performance, it is always necessary to describe the background and the broader picture, which impacted performance. In the first half of 2026, the main driver, which impacted our performance was still the conflict which started in the spread almost, which resulted in the unprecedented stabilization of many markets as well as shuttered a lot of supply chains for the very basic feed just natural gas or sulfur.

Those feedstocks, which have always been considered the very foundations of economy and it shares the foundations of that economy. And it highlighted the problems which were noticed went unnoticed or which were considered or had been considered natural which were unlikely have been unlikely to appear. The [indiscernible] of especially gas, which is not only fuel for us, but only the key feedstocks that we use for the production of arises resulted in gigantic problems and fluctuations of not only the prices of urea or ammonia but also resulted in unprecedented the volatile unexpected behaviors and sentiment in the market, as you can see, it resulted in the 90% hike in gas prices and cost versus now exceed EUR 80.

What is interesting on a more positive note, is the fact that it's gigantic shock market share stabilization of main feedstock. Also, impacted how we look at business also as politicians how they look at the economy, which is based on such important conditions and food security. It might grow test or unlikely or unbelievable that in 2026, European Union is actually in the world had to think about food security and how to ensure it in today's world.

So it seems unlikely that this could happen, but we saw this unprecedented unbelievable, I think in May and the European Commission had to release an action plan and also something that we should consider as a plus it's actually outlined the conditions for the very -- the basic conditions for the production of fertilizers in the European in other positive elements that came out of it. First, understand what was what the impact of the locate in the straight-mast meant for all of us. as also seen in the European politics.

That is a very steady decision strong decision to actually focus on the for prices as well as the policy concerning ETFs, which is considered a very important burden for our business for the chemical business for the fertilizer business as well. and especially so that in the Fertilizers business, we use gas quite a lot, not only as fuel. And remember, you have to remember that in the protection of ammonia, it is extremely important. So the EPS policy has been revised quite strongly, and we decided to maintain or implement the SBA carbon border adjustment mechanism in order to compare or be able to compare the competitiveness of those products that are produced in the European Union and those that are produced outside of the EU, which are subject to such additional lease.

And this is something on a more positive note. However, what's also important is the fact that in the external environment that I just described, we did have some negative events, but they resulted in pretty positive decisions. And this impacts Grupa Azoty and this is why Grupa Azoty has been accelerating its restructuring and optimization and efficiency boosting projects. for the past 2 years. And we are hopeful when we look at the conditions ahead of us. But we don't -- we cannot forget that.

The production of fertilizers, production of chemical phone products did or had not functioned in a positive environment in regulatory environment. So as a management board, we're not only responsible for restructuring processes, but we need to rebuild and restore our production capacities in order to tap into the opportunities that are out there in order to move on with our plans but also in order to follow European Union directions. After all those problems I've just described.

As you know, we still had EBITDA at PLN 370 million. this is a major improvement on the previous years. And for the second quarter, we're talking about PLN 274 million EBITDA compared to the loss of minus PLN 71 million a year before. So this is yet another quarter when the effects and the fruits of our measures and actions we have taken are visible. And this is something that we do in order to stabilize our company and the gigantic fundamental change in average trade policy.

So since the conflict in the Strait of Hormuz started, we revamped our trade policy. We momentariand we are able to change or modify our prices even on a weekly basis. We set up a new production trade teams that monitor the situation in the gas market. And optimize the production of our products and our facilities based on the efficiency figures. And our potential. So we have weekly meetings verification means. And this is our response to those problems that are macro in their effect. We also continued the as of the business program, which is meant to maintain cost discipline and find key areas for this investments and optimization of processes, savings, optimization of costs and also, which will be probably discussed by Mr. Podgorski later on.

The enormous success in the second quarter was -- which was made to stabilize our financial situation in the negotiations with the bank also took place. So these were all the major tactical measures, as truck measures and actions which we took and are also very flexible and older for us to response to the macro situation and also the conditions. So those changes that we will be discussing in our performance that we'll be discussing is not something that came out of the blue, we did our best in order to maximize the utilization of all our resources in order to generate maximum results possible.

As far as the results per segment or by segment and by costs are concerned, will be discussed will be discussed by Mr. Podgorski, which will walk you through the details and factor figures over the first half of the year. As Mr. Celejewski said, the first half in the second quarter and the first half of the year was a period of a great challenge for the company. for the company. So the situation the conflict in the Middle East actually meant that we had to -- we were caught by surprise, but also we had to react in order to function in this highly uncertain situation in terms of the cost of feedstocks and also the prices of our product.

As far as the revenue is concerned, the revenue was at about PLN 3 billion similarly to what we reported before. But if we look at the EBITDA level, EBITDA has been growing consistently in the second quarter, EBIT came in at -- I mean before the years before, we had figures such as minus the PLN 120 million minus PLN 71 million. Right now, we had a positive EBITDA of PLN 274 million. What happened in the second part of this period on right-hand side of the slide, we're showing is as follows. In the second quarter, EBITDA came in at PLN 334 million already.

And the next slide shows results by segment and the contribution of individual segments to our performance. And when you look at this data, you can please see that in each of our segments. The data and the performance are better. Then we reported a year before in the second quarter -- for the second quarter of 2025. If we were to walk through individual segment. we'll see that improved quite a bit, PLN 36 million from the Chemicals segment are better as well year-on-year. going up by nearly PLN 200 million.

As far as third line -- plastics was concerned, the loss was lower than the year before. And in the Energy segment, given the costs that we're growing and are still growing. This contribution to EBITDA is not that high. However, the last bullet point shows you that EBITDA, which applies directly to the company -- the companies in the group, it went up by around a dozen of million.

Moving on to costs. You can see that you can see variable costs in the formula which is, first of all, nominal. As you can see what variable costs in the second quarter of 2026 were and also what the change was and the change was a significant talking only about 6%. Our fixed cost went up. However, all in all, our cost by nature, went down by 2%. When we look at costs by nature, when we neutralize and trying to offset them on neutralize them by comparison. So excluding the part of costs, which was due to depreciation and amortization from our performance in terms of costs in the quarter 2, 2026, then we arrive at a level of PLN 900 million.

And if we look at normalized ex costs. And if you compare it year-on-year, we see a slight increase, which is due to an increase in labor costs, mainly. However, the difference between those costs, fixed costs year-on-year. We're only talking about around [indiscernible]. So this is less than inflation rate year-on-year, and the inflation increase year-on-year. A segment breakdown now. As I said before, all the segments contributed positively to our EBITDA, maybe not all of them, but all in all, they contribute better to our EBITDA year-on-year.

But if we look at Agro only in 2025 in the second quarter, it came in at PLN 80 million, which was an increase on 2025. And as you can see on the slide, cost of sales contributed positively to that. But in total, this positive contribution was lower than Q4, which was due to the fact that in the second quarter, the company started shutdowns, maintenance shutdowns which will accelerate.

In the second quarter, we had a great variability of prices and lots of uncertainty among our customers and end users of farmers. So no subsidies uncertainty regarding the timing and the amount of subsidies. So as a result, the sales were slightly lower. This is why we have this negative impact. Nevertheless, the other businesses and the technical cost of production have given us a positive EBITDA.

Now chemicals. Chemicals is the largest beneficiary of the changes triggered by the war against Iran. As you can see here, -- the greatest revenues came from technical urea followed by sulfur and here, we have a growth in excess of 100%, which explains the shift of our production capabilities to the chemicals sector because technical urea sold at very high prices in the second quarter, pretty much like sulfur. So when you look at the EBITDA and the impact on EBITDA of this particular segment, then the difference would be in the range of nearly PLN 200 million.

So you can see revenues changing from PNL 600 million to PLN 900 million 50% more year-on-year and EBITDA is nearly PLN 200 million higher and the margin is just under 20%. So result long not seen in this segment. Now plastics here, the revenues were lower for a number of reasons. Firstly, as we've heard from the CEO, lots of market uncertainty as a result of which some of our clients suspended their production operations or reduced the purchase volumes. As a result, our revenues were lower but Nevertheless, our prices and our margins remained higher. So as a result, the loss on plastics was much lower than in the second quarter of 2025.

As you can see here, we did not produce caprolactam, or PP in PA, which has the largest impact on our sales in plastics -- well the revenues higher from PA because of greater prices?

Okay. Thank you very much. Now outlook before we move on to Q&A , a few comments about our outlook. Let's start with the transaction from the 31st of March transaction with Alan on the sales of polyolefins that deal is done and dusted. And right now, we are waiting for the final verdict from the court to make sure that a transaction is confirmed. And as Mr. Podgorski mentioned he his team played a major role in this process. We are still negotiating, we have been negotiating with the banks on the conditions of the restructuring contract that will stabilize the foundation, which is so important in the context of the Group's progress.

The process has been dynamic. We've been making good progress day after day. And another important thing that we're working on -- and that is also heading towards a happy ending with a great deal of involvement from the Ministry of Treasury is a capital injection for the company. So in such a way, we will obtain funding that will then be effectively used for our growth. So these directions that are essential for us this year, and we want to complete all these processes in 2026. So as of now, the discussions and the plans of the management of the group and each individual company include this component in their plans for 2027.

So to wrap it all up, and to prepare the road for the results for the third quarter and the fourth quarter. So even though our performance has been clearly improving, and I'm very grateful to all the people of sort Group because all of you have made a great contribution to our growth and our transformation, which has been so intense in 2025. So this performance is really good news and we want to share those results with you as far as possible.

But if you look at the external environment, we can't slow down. We have to keep watching what's going on in external markets because we were hoping the turbulence will be over, but it seems to be accelerating. So we never know what's coming. But as I said, our internal structures that we have created are working fine. And we are still restructuring the company [indiscernible]. And we also have a few projects that go towards rebuilding the Azoty Group and its role in ensuring food and chemical safety in these turbulent times.

So we are happy about the results performance. We are sticking to our plan. We have more ambitious tasks ahead, and we still have to keep our eyes open to the external environment, which is so far from stability. That said, we are happy about the fact that Azotic Group will be playing an increasingly important role in this setting, which is being appreciated by politicians, both domestically and beyond.

Let's move on to our Q&A session. And the first question goes to Mr. Podgorski. That's a question about the transition processes in the company?

So this year, Will we have an issue of shares that will be owned by the Treasury. As you know, we have someone an extraordinary general meeting taking place on the 22nd of September. And the resolution underlying the extraordinary meeting is identical to a resolution that we passed in March earlier this year. So this extends the time window for issuing shares it's been extended to March 2027. And we plan to have to run the issue, the issue later this year, depending on a few very important factors. The most important milestone in the process is apply to sign an agreement or at least prepare documents for signing an agreement regarding our financial restructuring.

We've been cooperating very closely with banks and the banks, they understand the situation they keep monitoring our actions very closely, but they are -- they have a positive attitude towards us. We are very close to the end of negotiating the terms of this deal and -- at the same time, we are working on the issue of shares. We have met repeatedly with the Ministry of State assets. And we submitted an application to the Ministry. Discussions are in progress. They are well advanced, and we hope that in the weeks or months to come, we will be able to give you more details.

And as I've already mentioned, we're doing our best to deliver to sign the agreement by the end of the fourth quarter and to carry out the resolution of the extraordinary general meeting, meaning the issue of new shares. As you know, the third quarter, which we have to mention here as well. In the third quarter, it's a period of general meetings across many different companies in our group and those general meetings expressed very consent to use their assets as collateral in our bank transaction.

So this was 1 of the conditions of the restructuring agreement, which means that agreement is coming closer. So 1 more question to you what are the current prospects for signing this agreement by the end of the year?

Well, the likelihood is quite high. Over the last couple of months, the process has accelerated I'd rather want to talk about distant future, but the discussions with the bank have been to the point and the banks understand the situation in the company. And as I mentioned before, we hope to finish the restructuring process as soon as possible.

Okay, one more question about those important processes in many One of the aspects of restructuring is the sales of GA polyolefins to ORLEN. What is the current prospects or completing the deal, is there any risk to the deal in the context of the arbitration procedure?

Well, we haven't heard anything that could indicate this. ORLEN has obtained all the necessary regulatory consents and the court approved the restructuring plans on the 9 July. So now we are waiting for an approval for the composition -- so the process is still going on. We know that the arbitration between Lionel Basel and ORLEN is underway. We are not party to that procedure. So we don't know the details. But on both sides, there is a determination to complete the process as soon as possible and to sign the final agreement whenever possible.

Okay. Next question to Mr. Celejewski. The second quarter, we had much lower sales volumes. One of the reasons were maintenance downtime, so which plants were in downtime and why?

Well, maintenance downtime is only natural part of the production cycle. It's planned downtime, so our sales were affected by a series of defects in some of our plans. And of course, we do not focus on a single plant because this is only natural. Maintenance and investments should aim at minimizing the impact of such downtime. Quite importantly, in this context, well, we have 2 things here.

Unfortunately, as I mentioned, the regulatory environment has been unfavorable not to mention the problems caused by this misguided investment that has drained our investment budget and our CapEx budget was limited for many years across all the plants, which slowed down our investments and even prevented us from proper maintenance because that process can't be stopped overnight, its effect will be -- will keep coming back for some time which is due to the mistakes from the past, but the new Board has taken 3 important decisions in the process of negotiations with the bank, discussed by Mr. Podgorski.

And one of the most important things is to increase the budget on repair investments and maintenance as well as development investments. In the current quarter, we disbursed some funds on our ammonia plants in Politan and Powai. We also decided to have a new SOP to verify our CapEx budget to maximize the efficiency of these funds. So even if some investments have been planned and then will not be actually implemented, then we know how to reallocate the funds. So we have launched investment rebuilding to plants, and we monitor the consumption of funds.

So we will actually verify the progress on 3 different occasions during the next year to make sure that every single spend on investment is well spent. And this is obviously one of the elements of our negotiations with the bank to make sure that the money we earn is spent on well planned and well delivered CapEx investments.

Okay. And next question goes to Mr. Celejewski, who is currently involved in meetings with the social partly, there are some collective disputes going on. What will be the cost of accepting the demands of the trade unions?

Well, if we accept the demands to increase the average wage by 1,500 per month. Well, that would actually install the company, the group just can't afford to meet those expectations. But quite importantly, in the current negotiations, well, that's formally, that's a collective dispute, but I would not use the word dispute. I would use the word dialogue because for us, for the Board, these meetings are about discussing the future of the Group as a whole and its individual companies.

Right now, we are in the sixth round of discussions about the future and the expectations of the workforce and as a Board, we are we want to find a common ground with our social partner because we have a shared goal, we have the restructuring process and the brand of that process has been taken by the -- by our workforce. And its ultimate underlying reason was this misguided investments, the cost of which was PLN 18 billion.

So we don't have diverging objectives. We have a shared objective of sorting out the situation across all group companies. And we also want to create realistic market-oriented compensation scheme went to be fair and consistent across all the group companies. So this is a process. I believe that these discussions are just the first step because first, we need to have a stability and to be stable, we need to sign agreements with the banks.

So as you can see day after day, we are improving our performance and the more stable we are, the more stable our foundations are, then our wages will become -- compensation scheme will become more realistic and more transparent. So our goal is to make sure that people who do the same job get paid the same amount of money and our ultimate goal is to demonstrate that Azoty is a key producer of high-quality products respected in the EU and beyond. So we want Azoty be a respected employer. And we want our people to regain the steam, the respect they were pride of. So I think the spirit of those negotiations is right. We just need to -- all of us, we need to understand that restoring what has been last takes time. It takes a few steps. As of today, we simply are unable to meet the current expectations.

And our next question from Eric Malinsky from WPL, High gas prices in the past caused downtime in some of the plants. Is it possible that will also switch off your installations, your plans because of gas shortages or perhaps due to high fertilizer prices, it still makes sense to produce fertilizers?

Well, 3 aspects here. As I mentioned, this is criterias. We have our gas sales team working day in, day out, monitoring closely the short- and long-term perspective and the long-term cost of switching off our plant. And the efficiency of each plant and changes in the production structure. So each day, we think about towards to produce and where and we compare this to the alternative cost of switching off the plant. So those decisions taken each day make the foundations for our sales decisions. So the process is more and more consistent.

And as I said before, the Strait of Hormuz and the shock that came with it and the volatility. Well, this opened up a few avenues and it also helped the EU to enforce some of its regulations, which also translates into the fact that in the second quarter, we had a quite significant growth of revenues from exports. So as I said before, we have world-class product quality and with lower supply and greater demand. Of course, with the Polish market being the priority, we increased the share of revenues from export sales. And that's why there was not a single day where we considered switching off our production. So yes, we keep monitoring the current data we consult our decisions with experts who are in charge of our production and sales processes.

And the last question to Mr. Podgorski. Why we pay so much delays and advisers, perhaps -- or will the cost level stay the same this year?

It can stay the same. We don't know what the cost will be. It will depend on the restructuring process, both related to polyolefins and our intra-group restructuring. So this cost is only natural with such processes as part of restructuring both banks and us, we need to have professional advisers. That's not only financial advisers, it's also lawyers. If you look at the structure of our costs, the cost of advisers in our company, then you will notice that the costs related to restructuring probably defined is 90 -- more than 90% of all advisory services costs.

And then when you compare the -- you look at the structure of advisory costs in terms of the recipient of the service, then most of those services are consumed by banks and banks, legal advisers. And why is that? Well, that's a natural process. There is nothing extraordinary here. Such costs are inevitable. Our restructuring has been going on for 2 years. So it's hardly surprising that we've paid quite a lot. This is why we want to complete restructuring as soon as possible to stop paying those bills.

Those as temporary as you surely know. So when we sign the next agreement, this or that agreement, then we will have sudden drop in those costs, and we will come back to the levels that are natural in companies like ours.

Okay. And the last question to Mr. Celejewski, the final umbrella question. The results for the first 2 quarters are very good. EBITDA going up year-on-year and EBITDA margin going up as well. So what are the outlook for the group's performance in the third quarter both in terms of performance and the market?

Well, as I said, the performance has been satisfactory and the credit goes to everyone in the group who we've been very straight on the discipline and the changes that we've implemented when it comes to third quarter. We still have to be very humble about this. The market is still very volatile. There are no symptoms of stability hardly anyone would be an optimist regarding the prospects for the market.

So we just simply have to assume that it will stay volatile and unpredictable. So what we can do is to focus on what is within our control. So cost discipline, sticking to our transformation plan. But obviously, we have this pathway of positive regulatory environment that appreciates the importance of AAT. And we want to make the most of that pathway in stabilizing our company.

We also have had some technical effects, which was addressed in 1 of the earlier questions, we need to take a system-level approach to it. So if you look at all this mix of factors, we are neither optimist or pessimist, we stay neutral. We stay focused on the here and now we look within the group. We are not hoping for any positive developments outside. If there are any positive developments then that's great. If some negative things happen -- and then our core, our foundation will remain unaffected. So we're not overly optimistic we stay humble. We will simply stick to our transformation plan, hoping that positive results will follow. But as of now, we can't predict or forecast such developments.

Okay. Gentlemen, thank you very much for your analysis and for walking us through the results of Azoty and to all of you who have been with us. Thank you for being with us, and we'll see you in November when we discuss the third quarter. Thank you.

Good morning, everyone, and welcome to the earnings call, which will be devoted to the discussion of financial performance of Grupa Azoty for the first quarter 2026. As usual, we have an online webcast and also after the presentation, we will have a Q&A session. [Operator Instructions] The results and the outlook for the upcoming quarters will be discussed by Marcin Celejewski, President of Management Board and Jacek Podgorski, Vice President of the Management Board of Grupa Azoty.

Good morning, everyone. First quarter of 2026, was obviously a period where we -- when we were impacted by what happened in the Persian Gulf and the outbreak of the conflict and blockage of the Hormuz strait. It is a seemingly distant destination or location from the perspective of our core business and also the global business related to the processing of petrochemical products. It actually escalated and had significant implications for our basic core products that are fertilizers. The situation was dynamic.

Right now, we are facing unprecedented events such as introduction of export duties both on fertilizers and also various semi products used in the fertilizer production, for instance, Egypt introduced export duties at $90 per tonne for any nitrogen-based fertilizers. As far as China is concerned, which is usually very restrictive, they have further tightened the export on nitrogen and phosphorus fertilizers in order to secure and safeguard their domestic market.

Russians introduced a temporary ban on ammonium nitrate export, extended by the end of June also the ban on sulfur exports. Turkey introduced a further ban on urea export and Iran introduced restrictions and extended the restrictions on petrochemical products as well as -- including ammonia and urea. As far as the Polish market is concerned, naturally, what happened in the Persian Gulf had, as I presented -- as I mentioned during the presentation of our results for 2025, it also had an impact and resulted in introduction of several major changes in our organization.

We reacted quite dynamically. We set up operational teams, which were to monitor the efficiency and the profitability of all our production facilities and our production of core products such as ammonia, urea and obviously, nitrogen-based fertilizers. Those teams coordinated on a daily basis their activities. They took a close look and monitored very closely the prices, and they cooperated with our commercial department in order to plan our activities for the upcoming days, also concerning the restriction on production of our facilities.

Luckily, we're able to keep producing and utilizing our production capacities, but also our commercial department were focused on the maximization of our results without destabilizing the market, without creating artificial price inflation, especially considering the prices introduced by our competitors as it will be discussed in a second by the President of Management Board. As a result, we were able to react flexibly and dynamically and very swiftly to those dangerous and unprecedented, unexpected events in the Persian Gulf. So this is a positive element based on which we will build further operational changes across the board in our company.

As far as other positive events of the first quarter are concerned, we engaged in negotiations with the Ministry of Agriculture in Poland, but also at the EU level, European Commission level. The European Commission also noticed this gigantic problem, which resulted due to the blockage of the Hormuz strait. They noticed that it can impact the food security across all of Europe. So we engaged in very hot debates in the European Union at the EU level and incorporation in partnership with other fertilizer producers, we managed arrive on an agreement, as you know, Grupa Azoty is [indiscernible] of the Fertilizer Europe Organization.

And for the very first time, we managed to meet halfway and reach an agreement on 19th of May, Fertilizer Commission -- sorry, the European Commission published the Fertilizer Action Plan. And for the first time, the EU has explicitly linked the agricultural policy and industrial competitiveness as well as strategic autonomy with a presentation of fertilizer production within the European Union. This is a major change. And those of you who keep a close look on our business and also with regard to EU policy, you know that the chemical business, including the fertilizer business, is being pushed out of Europe. But this trend, I hope, has just been halted and maybe even reversed.

This plan, the Fertilizer Action Plan published by the European Commission focuses on a couple of elements, including strategic autonomy. We know that the production of fertilizers with -- in view of the food security should be as close to the market considering the effective -- efficiency and the price and the availability because they are enhanced in this way.

Secondly, the European Union or European Commission noticed and included in this document was the fact that it is necessary to ensure energy competitiveness in terms of prices of electricity and natural gas, which are used to produce fertilizers, which had a direct impact on the following two elements. ETS, EU Emissions Trading System and carbon border adjustment mechanism. So the directions of -- under the carbon border adjustment mechanism were analyzed, and this can have an impact on the competitiveness of our products in the future.

In other news, as a role, the European Union still sticks to a transformation strategy under green deal and the circular economy. However, certain elements have been added potential support for this transition process because we all know that any transition, any change is related to major investments and in short or longer term, it can result in higher costs and lower production volume. So this is counterproductive to the actual assumptions of the European Union. So the Fertilizer Action Plan is a strategic direction expressed by the European Commission, but it is the first ever -- first signal from the European Commission that will result in a change of our business and our prospects.

So we have been involved in those discussions, and we want to stabilize this market. And as I said, in the second quarter, I believe it will be down to details because we are involved in the discussions with the Polish Agricultural Ministry, Ministry of Agriculture, in order to secure the production of fertilizers so as to make sure that this market is stable and free of the turbulences of the Persian Gulf, so as to avoid the potential risk of additional dysfunctions, additional increases, inflation, price spikes or unavailability of products.

So we are preparing for the new season, and it shows the long-term rational thinking and we believe that the upcoming months will be beneficial to both Grupa Azoty, but also all the consumers of our products.

And other important developments in the first quarter, so Mr. Podgorski will give you the details, but Azoty despite of all the turbulences is responding proactively and is doing some internal transformation projects that I discussed last month, so we are about to launch a new internal structure, which will be our first step towards consolidation within the group in search of synergies. We are currently negotiating or perhaps consulting a certain code of internal cooperation. So the consultations are internal at this stage. And this will make us even more flexible and even more efficient in terms of managing the group's assets.

We have been also auditing our energy spending, which, as you all know, is one of our key cost items. We have tested decommissioning of our coal-fired boiler in Tarnow and we want to use production steam, especially in periods of maintenance downtime. So we are considering different options to replace the coal-fired boiler in Tarnow. This project -- another project that never stops is the project of improving our investment costs and administration costs.

So that's Azoty business, we also try to improve our real property management in the fourth leg of divestment strategy. We try to make one basket of all real property that we could sell or rent. As far as our synergies are concerned, there are two streams here. One stream is becoming more independent. So we have a lot of assets in our group and those assets will be providing services to the company, and we want to consolidate our projects in those internal companies. So we will be spending money internally.

And we are approaching the end of the first step in -- preparing our integrated production plan for 2027, so we do this with intercompany teams. We have developed a model that will help us evaluate the efficiency of our production as is. And then we will plan changes for the second half of the year looking at -- focusing at inefficiencies. So starting next year, we want to have one consistent group-wide production plan, which should generate huge operational efficiencies that will have a natural translation into the financial performance.

So that's it from me. Now over to Mr. Podgorski, who will give you the financial performance in the first quarter and discuss our proactive response in the first 3 months of the year.

Good morning, this is Jacek Podgorski. As you can see in this slide, the revenues, first of all, and EBITDA did not change -- sorry, revenues did not change over '25, but our EBITDA went up to PLN 317 million. If we exclude the impact of polymer project, then EBITDA would have been even higher. It would have been greater than PLN 340 million.

Now this slide is the best illustration of what happened in the first quarter of the year. Starting in 2025 and showing the impact of all the factors that we calculated in an aggregated manner, you will see that last year, our EBITDA was minus PLN 8 million. And then polypropylene project delivered PLN 94 million losses. So if you exclude the negative impact of polymers, we arrive at PLN 8.6 million. One-off event of PLN 97 million, that's revaluation of our reserves for the purpose of CO2 certificates. The price of those certificates went down. So their impact on EBITDA in the first quarter is positive.

Of course, we need to remember that in situations like these because of the macroeconomic environment, the price of those certificates will keep changing. So today, the price is higher than at -- on the 31st of March. So in the next months, the positive trend will be reversed. Anyway, if we extract -- if we take the 2025 result and we extract those items, we arrive at PLN 183 million. So this should be our benchmark, our point of reference to compare our performance in the first quarter '26.

Now the next item, the sales price went up by PLN 35 million. So our sales efficiency generated another PLN 35 million in EBITDA. And if we omit -- if we disregard other impacts that are negligible, we come at PLN 108 million. Most of that is the difference in gas prices because you need to remember that between '25 and '26, like the quarter-on-quarter, the gas price, the average gas price went down. So the additional EBITDA generated by cheaper gas that's roughly PLN 108 million. The PLN 14 million, that's the cost of sales. That's our optimization projects mostly related to the sales logistics and that's one of the milestones that we have been trying to implement inside the company.

Now our overheads are very low, much lower than 2025. And then this clearly shows you that we are -- we have improved our cost control and the situation seems stable in that area. So we arrived at PLN 341 million. In fact, most of the impact of the polymer sales was in 2025. That project still generates some negative impacts in the first quarter of 2026. That negative impact was minus PLN 24 million. So if we include the negative impact of polymers, that's PLN 317 million. That's our EBITDA. And that if you compare this to PLN 183 million, which is last year results, excluding the revaluation reserves, then you see the actual improvement, most of which is owed to lower gas prices.

Now let's look at our basic product groups or commodity groups. Agriculture, here, the main driver is nitrogen, fertilizers and ammonia. So here, our revenues went up by 9%. Sales volume went up by 10%. And hence, the EBITDA here for the whole agricultural sector is PLN 239 million.

Chemicals, here the situation is somewhat different. We need to start by making two important references. We have two products that's technical urea and sulfur that delivered extraordinary results. Of course, they are related to the Strait of Hormuz situation, and the protectionist policies in such countries as Russia, well, Turkey, just to give you the two largest. So those countries no longer export urea or sulfur.

And then if you add major imports of urea to India, then you will see that the disruption on the supply side, in both urea and sulfur, then we as the producer of the sulfur, we actually gained from it. When it comes to sulfur, the trend will surely continue. As you can see, other products, those other products still have a negative bearing on our EBITDA, and we do not expect major changes in the months to come.

Now Plastics. I discussed polymers before, but we also have caprolactam, polyamides and the information that we have, the news that we have are not good news. Unfortunately, we still have an oversupply of those products. And as a result, Grupa Azoty either abandon the production entirely, and if we keep producing, then the loss is generated. And there are a couple of drivers for this situation. In terms of polyamides, it is mainly due to the entire automotive segment situation. As we all know, across Europe, we do not produce any parts that are based on polyamide anymore. It's either that we import whole cars, relatively made cars from China or there is no need to use polyamide. So there is no demand for polyamide and the price and its impact on EBITDA is unfortunately negative.

As far as the outlook for the year is concerned, the President of the Management Board mentioned the impact of the Hormuz strait situation on our production and our income. We don't assume that in the case of basic fertilizers that we produce. The positive trend -- that positive trend that we see in the first quarter is about to reverse, we don't see that. So the restrictions on exports also imposed by countries that are producers puts us in a better situation because we have fewer competitors. And we believe that in the upcoming months, we will be the beneficiaries of that situation because in the local market, the competition has shrank.

And the same applies to sulfur. What we see in the sulfur market is inflated prices. And this has a ripple effect in the supply that we ensure as Grupa Azoty, is not supported by the supply from other destinations. As a result, the prices are growing, and this has an impact on the final product, on the end product. This is why we see that some of our customers are dropping production altogether or they reduce the stock volume. Keeping the fingers crossed that the situation in the sulfur market is about to change in the nearest future. And this is what we assume as well. We don't think that this positive trend will reverse. So I believe that the second quarter will be positive in this respect in this market as well.

Moving on, as far as prospects and outlook is concerned, as you know, polymers, the project was sold under a preliminary agreement, not yet a final agreement, but we have a preliminary agreement and this allows us to expect that the final agreement will be signed in the third or fourth quarter of the year. And this problem, this issue, that had such a heavy bearing on our business will be finally neutralized. The discussion -- the negotiations with the banks are ongoing. You see all our communications, the standstill agreement was extended on Friday by additional two weeks.

This standstill is to be interpreted in the following way. The banks see that the company is focused on better and tighter cooperation with the banks. And this gives us some space, and this will allow us to file documents or submit documents within the coming 2 weeks that were required under previous agreements. We don't see any threat of a failure on the part of the company, as far as the execution of the standstill, the agreement is concerned. Obviously, some of it is beyond our control. But we keep constant -- we keep in touch constantly with our stakeholders, shareholders and the banks. And I believe that we'll be able to manage that problem and finally resolve that issue.

You probably remember that the [ term sheet ] is also subject to negotiations as we speak. And we are close to the end of this phase. And I believe that in the nearest future, this will all be a base for our further actions. First of all, the issue of shares, the last bullet point on this slide, talks about it. And secondly, we will be able to continue the process of preparing a restructuring agreement, which will give us space to breathe again for the upcoming couple of years in order to negotiate with the banks to make sure that the company comes out of this financial problem and issue in the end.

Thank you very much for this discussion of financial performance and operational performance of Grupa Azoty. We'll now move on to the Q&A session. The first question to Marcin Celejewski. What will happen in terms of the export of fertilizers to Europe and European Commission's decisions?

Yes, the European Commission suspended temporarily the export duties on certain fertilizers, including urea and ammonia in order to reduce prices and support agricultural producers and also take care of this gap in imported fertilizers. And I believe that in the end, we will be able to increase our production capacities and supply our products not only in Poland but also across the European Union. I'm talking about fertilizer products, obviously. But the prices -- the duties went in, were really put on hold. However, the decision does not impact any antidumping duties on the imports of fertilizers from Russia and Belarus. This is good news. And as far as Russia and Belarus is concerned, those antidumping measures will be introduced as of the first of July.

So looking at this situation and imported fertilizers from Russia and Belarus, they are a margin of the supply in our country, and I believe that this increased duty will stop finally the import of those fertilizers from Russia and Belarus, from those aggressive producers. So I believe that this impact -- this measure introduced by the European Commission should not increase the prices too much. So the imports will come from mainly Northern Africa under the quotas that we have and you should not forget that some expertise will be introduced in other markets as well.

And some of the markets which were intensively -- which intensively export their products, they will feel that decision, and our policies very reasonable. So we believe that the prices of fertilizers should not be impacted too much by this decision.

Two questions to Jacek Podgorski, I'll combine them in one. Would you expect any one-offs in EBITDA in the upcoming quarter, maybe revaluation of provisions or CO2 emission, right? And why -- where does the price of CO2 emissions come from?

Yes, I discussed it during the presentation. So the positive impact was recognized in the second quarter -- in the first quarter. In the second quarter, we believe that those provisions will have a negative impact on EBITDA. In terms of the prices of CO2 certificates, this market is volatile and the prices are beyond our control. So they are outside of our scope. We keep looking at the prices of CO2 certificates. And I believe -- and also the impact of those changes on our EBITDA.

So during the presentation, I tried to show you the impact of the so-called Anova -- of the one-off, sorry, because we don't want to show anything as a permanent success, while this is a one-off event. So as you can see, this amount was reported as a one-off.

Next question, Agro segment reported an increase of 157% year-on-year. Can you tell us right now that the fertilizer products are, again, a flywheel of your growth?

Well, it looks that they have returned to that path, the path of growth, which was the regular -- standard path and trend for fertilizers because fertilizers are a part of our business, which will bring us the highest income and the highest positive impact on EBITDA. And we see it as we speak. When you look at this slide, this additional positive impact actually focuses on ammonia and -- focuses on ammonia. And Mr. Celejewski mentioned that during the conference, during the earnings call, ammonia is a semi product, which is very sought after.

And because of the introduction of duties, we believe that in the coming months, the situation will persist. In addition, the fertilizer season is extended in Poland because we started the season a little bit later than usual because we had temperatures that are really low still in February, minus 20-degree Celsius. And then there was a spell of drought and as a result, the farmers did not apply fertilizers on their fields.

So the season will be prolonged, will be extended, and we will sell our fertilizer products even in June. So the sales levels will be very high until June.

A couple of questions. I will combine them in one. When will you have the issue of your shares?

Definitely by September 13, 2026 is the deadline. The first issue, which has already been planned will be performed by this deadline. In terms of the exact schedule, we're working on it and this is teamwork. This is a team effort, not only within the company, but also outside of it in cooperation with banks as well and financing institutions. So we'll try to wrap up the share issue as soon as possible.

A question from our fellow journalist, Dariusz Malinowski. Please discuss your sulfur business in more detail? Do you benefit from the closure of the Hormuz strait? What are your prospects for this business? And is there more interest -- higher interest among your customers for sulfur and demand for sulfur?

As I said before, sulfur is a very profitable product for us and it will remain so in some foreseeable future. We don't know for how long, but obviously, on export restrictions introduced by some countries, including Russia will have an impact on the shortage of sulfur on the market. It is not easy to replace the sulfur that is produced in refineries as a byproduct or a waste product overnight. And we are not able -- we as well are not able to produce more waste sulfur at Siarkopol.

So I believe that those prices will -- higher prices will persist for quite some time. It will have an impact on a positive EBITDA, but -- and there's also other side of this coin. As I said during the presentation, our sulfur customers find it increasingly difficult to address the higher price of sulfur and its implications to the production of the products. It might even restrict their production, their own production. So sulfur in the upcoming couple of months or maybe even in the longer term, will have a very positive impact on our EBITDA.

The last question to Marcin Celejewski. The EuroStat data suggests 80% drop of imports from -- on fertilizers from Russia and Belarus. What is the impact for Grupa Azoty in the -- in your positioning in the European market?

I will refer to what Mr. Podgorski said before whether fertilizers will remain a key product in our portfolio because this is something that this question refers to as well. And also as far as the directions outlined by the European Commission in the Fertilizer Action Plan. So the marginal imports of fertilizers from the aggressive importer that Russia and -- importers that Russia and Belarus are will definitely have an impact on a certain gap in supply. But we have discussed it with the Ministry of Agriculture, and we take measures in order to prepare ourselves to that situation in the short term to level it out, to flatten out that difference and remove that gap.

So I'm talking about our discussions with the Ministry of Agriculture, but also it is up -- it is also -- this discussion also takes place and is escalated to the European level. So we have a reduced supply of fertilizers in the market that are imported. And there are two elements to discuss here. I believe that in view of the fertilizer plan, which defined the fertilizer market as a major -- as a market of major importance for Europe, and we have a couple of companies, including Grupa Azoty as the second largest producer of fertilizers. And I believe that in the short term, those mechanisms that are worked on by Grupa Azoty in partnership with the Ministry of Agriculture will help us to overcome that problem, that shortage and find ourselves in a very good position in the end.

And also, we have great resources in Poland. And Grupa Azoty is a great asset, great resource as the second largest producer in Europe. So we need to also consider the increase of our own production capacities.

In reference to sulfur, as discussed by my predecessor, it is a great positive news that we have an increase in the price of sulfur. And we take benefit from it. We tap into it and leverage it. But we don't want to have a situation where we are maximizing the benefit in the short term, but we might -- must not compromise our situation in the long term. And considering the directions outlined by the European Commission and also our discussions with the Ministry of Agriculture, we believe that the results we're reporting for fertilizers show very clearly that fertilizers are a flywheel of our business and they are at the core, at the heart of our business.

And natural direction that we must take is to strengthen our production capacities here. So tactically speaking, maybe in 2027, the Management Board will start the discussions on how to increase our production capacities because we do have them, and we can increase the production of fertilizers and ammonia as well. Because this, I believe, is a very solid foundation, our major competency -- competence, sorry. And in the longer term and the foreseeable time, it will remain a flywheel. The main driver for Grupa Azoty's further growth, and we will build our additional pillars of our business around it, as we discussed during the previous conference.

After the second quarter, I believe that I will be able to discuss it in more detail. So this is the answer to that question. It's pretty complicated, but in a nutshell, in the short term, we will do our best in order to secure and manage that gap because the gap is there due to the restrictions of imports of fertilizers to Poland. And Grupa Azoty, we look at the situation we're consolidating, we are trying to maximize the utilization of our production capacities based on negotiations with the Ministry of Agriculture and maybe with the European Commission in the future as well.

But we are focusing on the investments on our core business, not on projects such as polymers. We focus on our competencies. We focus on our core business where we represent a great strength, not only for Poland, but also for the European Union.

Thank you very much for your participation in today's earnings call. Thank you for your attention. Thank you for all the questions. And thank you to the speakers for presenting and discussing the performance of Grupa Azoty. We will see you again after the publication of our results after the second quarter. We will inform you of the time and date of that earnings call shortly. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning, ladies and gentlemen, and welcome to the conference call devoted to the financial performance of Grupa Azoty published yesterday.

Our results will be presented by Andrzej Skolmowski, CEO; Andrzej Dawidowski, Vice President; and Pawel Bielski, Vice President of the Management Board. Before we move on to the presentation, let me remind you that you could ask questions via the grupaazoty.pl website.

The floor is over to Andrzej Skolmowski.

20 months have passed after very demanding negotiations with the financing institutions and the recovery measures. As a result, we have gained approval for the publication of the stabilizing agreement. We also secured a waiver for the non-delivery of the net debt-to-EBITDA ratio in order to stabilize the performance across the Azoty shareholders. All the leading companies across the group reported better performance in the 9 months of 2025 compared to the previous year.

EBITDA for the 9 months 2025 came in at PLN 391 million excluding the Grupa Azoty variations, it was up by -- it was up and came in at PLN 315.9 million. The improvement of our performance in a very challenging macro situation is the result of the delivery of an end-to-end Azoty business recovery program. I, therefore emphasize the importance of this program and involvement of the employees across the Azoty Group. Thank you very much for your engagement and involvement.

We have published the strategy up to 2030. We will deliver the strategy while structuring our net bank debt. The strategy lives up to our competencies, ambitions, and possibilities and will only focus on our core business. We will deliver the strategy in a very challenging market situation. Our segment -- main segments, four segments: Fertilizers, Chemicals and Advanced Chemicals and Plastics, will face a lot of problems. So, we will focus on logistics and we also will focus on the new segment, Chemicals for Defense.

We have convened the general meeting of shareholders in order to take a decision on a two-stage issue of shares in order to recapitalize the company and deliver strategic investments. In the first phase, we want to issue more than 33 million Series E shares at a total value of PLN 600 million, addressed only to the state treasury, with no pre-enterprise for former shareholders.

In the second stage, we want to -- or we consider the issue of -- or maybe a couple of issues of up to PLN 40.5 million, excluding pre-enterprise as well, addressed to market investors and the state treasury as well. After the two stages of the issue, the share of the state treasury and our shareholder structure would not exceed 50%. This is a very important stage in the restructuring of our bank debt process and is expected by the entire market and our investors.

Grupa Azoty Polyolefins had an impact on our performance and negative impact. However, it was down year-on-year to one-off events, and it's the payout of guarantees. But this is a one-off event, as I said, because to a large extent, due to the under-utilization of our capacities, due to lengthy shutdowns, to the regulation of our plants, and repairs of our plants, but also very low demand in the polypropylene market and low spreads, which were due to the macro situation.

Our operations at Grupa Azoty Polyolefin is not profitable still. It's worth emphasizing that the limited cash that we have at hand, as well as the agreements we have between financing institutions, impact the delivery of the Polymer Polyethylene -- of the Polyolefins of the Grupa Azoty.

Our special purpose vehicle also has an impact under the agreement with the general contractor, and we paid out more than EUR 170 million under this agreement due to delivery of the contract. And we focused on the plans and schedules for the repairs and recovery of our operations for this particular plant. This was welcomed by the finance institutions, and we should be financed by the guarantee. However, this plan has never been delivered due to the fact that the banks did not agree to it in the end.

In October, there was a set-off by the financing institutions in regards to the payout or payback of the credits. On October 15, Orlen placed a non-binding offer for the purchase of all the shares of Grupa Azoty Polyolefins at the value of PLN 1.022 billion. This offering assumes that all the shares and assets will be taken over on a cash-free, debt-free basis, and we will receive sources of cash to finance our payables. We focus on this offering very much. We have signaled time and again that the solutions to our problems related to this project will be delivered in cooperation with Orlen.

A word of gratitude to all our business partners, to all our customers, for your trust on an ongoing basis. This is a great capital, and it will bear fruit and bring the company back on track. A word of gratitude to our employees as well for their involvement in this recovery process, the fight, the struggle to have savings on a daily basis. Without this involvement, we wouldn't have been able to perform better results.

Let us now move on to discuss the situation in the market. The market environment, especially in terms of the prices of electricity, gas, and coal in the third quarter, was favorable to Grupa Azoty in the Q3 of 2025. We see declines, especially in terms of the prices of gas, based on an LNG supplies from outside of Europe to Europe. Only in September, prices stabilized, and we saw an upward trend. And the main determinant here was the publication of assumptions for the EU's 19th sanctions package and instability in the Middle East.

In terms of electricity, the price of electricity, we see a decline in the third quarter, especially due to increased production from renewable energy sources year-on-year, going up by [ 18% ] in Poland. And as a result, unstable operation of conventional sources that are coal and gas-based sources towards the end of Q3 2025, which translated into a higher price of gas.

In the case of coal, at the end of the quarter, we saw the lowest levels of prices of coal for the past 4 years, which was due mainly to a higher production from renewable energy sources in China and increased demand and consumption across the entire continent of Asia, which translated into a major drop in the price of coal, also due to lower prices of gas, making it easier to use coal sources and gas sources. And as a result, it was translated into lower prices of coal itself.

In terms of the Agro segment in the Agro market, it was to a large extent determined by the situation and sentiment of farmers, which were relatively low in terms of expectations for the prices of agricultural products across the quarter. The demand was dwindling for fertilizers. It was very weak. And also, the global balance for the demand did not improve on the prices levels. The prices went up for urea fertilizers, which increased the prices across the board for all other nitrogen-based products in the group.

Towards the end of quarter three 2025, we see instability in terms of regulatory environment or expectations related to the European Union, especially CPAM and ETS2, which did not translate positively into the situation of producers across the European Union.

The European Market for compound fertilizers was characterized by low levels and stabilization of prices. The demand for such products were pretty low in this period, and the spreads between feedstocks and the final product prices were shrinking. Conversely, higher spreads were only seen for ammonium phosphate, so DAP. And in this area, spreads in the third quarter were going up. Upward trends were seen for the prices of our main feedstocks, that is sulfur and potassium chloride, while phosphate prices were stable.

When it comes to the challenges related to the Agro segment, we still see the impact of import of product both from the east and from the other regions from outside of EU and Europe. We've noted a significant decrease of almost 45% year-to-year when it comes to import of fertilizers. But still, the volumes that arrived to Poland in the first quarter -- 1st half of year 2025, were groundbreaking. And this, in case of the division of sales in fertilizers in our region, meaning Poland, is going to have a significant impact on our sales till the end of 2025. We've noticed that the decrease of volumes of imported products from Russia and Belarus of over 76% is positively transposed. But the results, as we've indicated before, are going to be visible in the first quarter of 2026.

When it comes to Chemicals, stable spreads in products of the Titanium White. The market is still under pressure when it comes to decreased consumptions from Automotive segments and Construction segment. Similar case in Oxo alcohols, fuel spreads are stable with a slight increase tendency in the third quarter of 2025.

Segment of Plastics. This is probably the most challenging ones in the Azoty Group, especially when it comes to the Automotive segment and increasing import from Asia, especially from China. But it is not only about the product polyamide 6, but also ready-made products and ready-made cars, which are being imported from China and relate to decrease in production in the EU, a significant decrease of raw materials and prices of products. Very low level of prices from the very beginning of the first quarter of 2023 don't allow us for rentable sales of this category of products.

We've completed 20 months of talks, and we consequently implement the previously accepted repair program, and we on an ongoing basis are presenting the results of it. We've completed almost 20 months of demanding talks with financing institutions. We have been implementing consequently the accepted plan, and we on an ongoing basis are presenting, and also for two financial institutions. The result of talks is an agreement, a consent to continue the stabilizing agreement. It is currently binding till 28th of November.

As I said before, we've also been working on solutions, and we still work on solutions that are going to allow the group to shift from the understandings with banks that were established for several weeks or a dozen weeks to a phase of long-term understanding. And at the same time, we are preparing for the new emission of shares of Azoty Group. We underline that on the ongoing basis, we are meeting all the duties of ours related to paying the debt, which are resolved under the financing agreements. And this ensures the maintenance of the current situation.

For the 9 months of this year, the group increased the utilization of multi-purpose credit limits by PLN 54 million and utilization of factoring limits by PLN 117 million. The banking net debt-to-EBITDA ratio at 30th September of 2025, just as it was in the case of 30th of June 2025, was recorded a positive value, and it equaled over 14x -- 13x.

The positive EBITDA caused that the net debt and investment expenses that we've been implementing caused that the net debt was increasing in a limited way. It was PLN 263 million. And on the 30th of September 2025, that the group's available credit limits amounted to PLN 2,028 million. PLN 1,296 million is Polyolefins and the factoring of the total available financing limits at 30th September 2025 equaled PLN 1.726 million. An additional liquidity buffer of the group's net cash balance, which amounted to PLN 732 million at September 2025. The stabilization agreement of the Polyolefins Azoty Group with financing institutions, which regards financing of the Polimery Police project expired on the 30th September 2025. And as per the day -- on the date of the creation of the report, we have ongoing talks with the banks about the continuation.

On the 1st of August, we have signed a memorandum of understanding before Azoty Group, Azoty Police Group, Grupa Azoty Polyolefins and Orlen, effective retroactively from 31st of July 2025. The conclusion of the memorandum constitutes another important step in the process of seeking solutions aimed at stabilizing the financial situation of Grupa Azoty Polyolefins.

On 14th August 2025, the Grupa Azoty Polyolefins decided to withdraw on the 14th August from the EPC contract for reasons attributable to the contractor and to charge the contractor contractual penalties in connection with the withdrawal of the amount of -- and the withdrawal notice and the debit note for the contractual penalties were delivered to the contractor on 14th of August.

On the 15th of October, we've received from Orlen a non-binding offer to acquire shares in polyolefins in Grupa Azoty Polyolefins. The offer related to company's shares, including assets comprising it, free of encumbrances and on a cash-free, debt-free basis.

On the 13th of October, the financing institutions satisfied their due receivables accounting to EUR 76.8 million under the credit agreement for financing the Polimery Police Project.

The financial results that we presented for the third quarter are in line with the published estimates that we published several days ago. Azoty Group has PLN 2.9 billion of income in the third quarter, which means a decrease year-by-year by 6%. This is mainly driven by lower revenues in the Advanced Chemicals segment, in the businesses related to Plastics and Chemicals. The Agro segment maintained a positive year-on-year revenue growth trend.

The group reported EBITDA of PLN 391 million, with a margin of 13.5% in the relationship to the same period of the last year. The consolidated EBITDA increased by PLN 511 million and the EBITDA margin by 17.4 percentage points. The improvement of debit and EBITDA was recorded across all Grupa Azoty segments.

In the results of the third quarter, we've taken into account the settlement of the EPC contract related to the Polimery Police project, recognized on the one-off item in PLN 316 million. The consolidated EBITDA of the group for the third quarter without Polyolefins would amount to PLN 186 million.

The main factors affecting the year-on-year charge in EBITDA were as follows. One of the events that I spoke about related to the implementation of Polimery Police project, the total positive impact of them equaled to more or less PLN 316 million and more to that changes in raw material prices.

The costs in the third quarter 2025 year-on-year decreased by PLN 53 million, mainly in the sector of the costs of labor due to lower amount of jobs in the whole of Azoty Group. There was an improvement in the efficiency of the groups.

In the third quarter of 2025, Grupa Azoty noted lower costs of the use of raw materials by PLN 398 million. Of course, the biggest impact on lowering the costs was due to the decline in natural gas prices and more to that, unit consumption costs of electricity, phenol, propane, and propylene decreased. In the period discussed, gas accounted for 38% of the raw material consumption costs, which was 2 percentage points higher than the corresponding period of the previous year.

Majority of the companies from Azoty Group noted improvement of EBITDA results and achieved a positive level. The decrease of EBITDA by 29% was in the COMPO EXPERT Azoty Group.

The key drivers of the weaker performance in the third quarter were primarily market factors, such as macroeconomic slowdown, unfavorable weather conditions, and high inventory levels. Despite of the decline, the company continues to generate a positive result. In the case of Grupa Azoty Polyolefins, the positive EBITDA level results from one-off events related to the settlement of the Polimery Police project.

In the Agro segment, the main drivers were higher sales products and also price of products and declining prices of gas. And you remember about NPK prices and an increase in the cost of production of compound fertilizers. This was mainly determined by high imports of fertilizers from other regions. We're talking about more than 3 million tons in the first half of 2025, which will have a major impact on volume results of our production and sales in the second half of the year.

Moving on to our EBITDA performance, EBITDA improved to 3.7%, going up by 8.1 percentage points year-on-year versus the third quarter of 2024, and the improvement from minus PLN 81 million to plus PLN 3 million.

In the Chemicals segment, as we said before, it was mainly determined by declining demand or no demand from the Construction or Automotive segment, but the improvement was seen for AdBlue and technical urea. Other volumes of sales are going down, especially for titanium white and Oxo alcohols. These are the products that are heavily impacted by the two segments.

In terms of the production of caprolactam, we did not resume the production at Pulawy due to dwindling very low demand for Polyamide 6 across Europe. The entire segment came in at minus 6.1, and that is translated into minus 1%. The improvement was, however, up by 5.7 percentage points year-on-year.

In terms of the Plastics segment, we reported a positive EBITDA result due to one-off events that is the recognition of contractual penalties under the Grupa Azoty Polyolefins agreement. Without this effect, we would have recognized a negative EBITDA. Plastics were impacted by a very low demand or declining demand from the Automotive and Construction segment and also declining prices of products. The improvement of this result, considering and not considering one-off events, was recognized. However, it did not allow us to recognize positive EBITDA in a traditional sense that is without one-offs.

In the period of nine months of 2025, Grupa Azoty generated consolidated results from sales at the level of -- again, within nine months of 2025, Grupa Azoty generated consolidated sales revenue at the level of over PLN 10 billion and EBITDA at the level of PLN 312 million with EBITDA margin, which came in at 3.1%, going up by 6.1 percentage points year-on-year versus quarter 3, 2025.

Consolidated EBITDA for the group for the nine months of 2025 without Grupa Azoty Polyolefins would have come in at PLN 346 million. It is worth emphasizing that as of the fourth quarter of 2024, the group without Grupa Azoty Polyolefins has recognized positive EBITDA in the so-called core business.

In the Agro segment, the EBITDA margin was at 2.8%, going up by 5.4 percentage points year-on-year versus quarter 3, 2024. In the Chemicals segment, the EBITDA margin was at minus 5.1%. Despite this negative result, it was still higher by 5.3 percentage points year-on-year.

The EBITDA margin generated in the Plastics segment was at minus 9.1%, going up by 2.5 percentage points year-on-year. Obviously, these results in the Chemicals segment were impacted by the result of Grupa Azoty Polyolefins.

In the Agro segment, the key factors determining our results included a considerable increase in production volumes and sales, compounded or combined with the concurrent increase in the prices of products and considerable increase in the prices of gas. As my colleague has already mentioned, the demand for Chemicals remained pretty low and limited, and this was one of the main determining factors in the Chemicals segment.

The prices of feedstocks in the Plastics segment, such as phenol or caprolactam, were going down as well. And the demand across most of our sectors of our customers remained stable but low.

As we said before, in the third quarter alone, but also for the 9 months of the year, all our main Grupa Azoty Group companies reported higher performance versus the Q3 of 2024. At Pulawy, EBITDA came in at PLN 55 million. At Police, it was at PLN 72 million. So we see a considerable improvement versus last year's negative performance.

Grupa Azoty Kedzierzyn reported EBITDA, which was 4x higher than in 2024, and COMPO EXPERT reported EBITDA, which was up by 15%, and the company invariably generates positive results across the board, including at the level of net profit.

In the 9 months of 2025, as we said before, we generated consolidated revenue from sales at over PLN 10 billion, and we need to emphasize that EBITDA, which came in at PLN 312 million, excluding Grupa Azoty Polyolefins, would have been at PLN 346 million.

A couple of words on our investment projects. In terms of our CapEx projects for the 9 months of the year, we focus on CapEx Control Tower, and we are analyzing the entire portfolio of our CapEx projects. Due to our current financial position, we took steps in order to limit our CapEx spending, which is quite visible if you compare it to last year's CapEx. Our CapEx spending, investment spending, were limited to a bare minimum. We focused only on our key investments of major importance to our business across the group.

Right now, we have four major investments: two in Tarnów and two in Pulawy. In terms of Pulawy and the construction of a power-generating unit called base unit, we are currently analyzing the selection of the most optimum solution to finish that project, and we are taking inventory, and Polimex Mostostal part was due to Polimex Mostostal's fault. This part of the contract was terminated.

After the publication of the strategy until 2030, we are now looking at a very consistent delivery of our goals, which were presented in that very strategy, and its operationalization. We are analyzing a non-binding offer which we received from Orlen, and we are considering all the potential scenarios in relation to a very complex, comprehensive approach to that particular situation. We announced the general shareholders' meeting planned as at the 13th of February.

At this meeting, we want to ask our shareholders to approve of the issue of shares into stages. We will continue our negotiations with our financing institutions in order to arrive at a long-term agreement which will stabilize the group's financial situation.

We keep consistently keep delivering the Azoty business program, and the results of this program are already visible in the improving EBITDA level. This program brings together a couple of hundreds of our employees, and our ambition is to make sure that some of these initiatives that are delivered under this program, the Azoty business program, so the recovery program, will change the group thoroughly.

The business environment in the Agro segment is changing positively, and the customs duties introduced as of the beginning of July are bearing fruit, initial fruit. However, we will still have to wait for the effects of those new regulations until the beginning of the new year.

The improving EBITDA is visible. We are consistently delivering the assumptions of our recovery plan. We are emphasizing that we are already in the midst of the fourth quarter of the consecutively reported positive EBITDA across the Azoty Group.

Therefore, we need to still deliver our goals in terms of our negotiations with the financing institutions and the completion of these negotiations. We also need to prepare ourselves to a major breakthrough event. That is the general shareholders' meeting convened as at the 13th of February 2026.

Thank you very much for this presentation, and now we can move on to a Q&A session. The first question, Dariusz Malinowski. Mr. Dawidowski has already partially answered that question.

Do you see any effects of the new tariffs on Russian fertilizers, and if so, how, and to which extent, and when will these effects be visible fully in the Fertilizers segment?

As I said before, we do not see those effects yet. They were only implemented as of the 1st of July. The very high record-breaking, if we compare it to the previous year's levels of import in the first half of the year, translated into the situation in the market. They are in Poland, but they are still in the transshipment terminals. And the prices are pre-customs duties prices still. We expect that the effects will be shifted by 6 months. That means that the effects will be seen as of the 1st of January 2026. We need to remember that as a result of these changes, the gradual changes of customs duties, we can expect yet another increase in the prices of products transported or imported from Russia and Belarus as of the second half of 2026.

Second question is on Agro segment. What is your assessment of these higher customs duties on the prices of products across Poland?

As we said before, we see that the higher prices are not of major importance in Poland. Those increases are not significant. Fertilizers in Poland are sold at very competitive prices versus other countries. So, we cannot say that it has any major impact on the situation of farmers.

The offer of Orlen is binding till December this year. We are approaching the end of the year. When are we going to find out what's the final decision of Grupa Azoty in the meta?

The offer of Orlen is an offer of purchase 100% of shares of Azoty Polyolefins. As we know, we do not own 100% of shares, and we are right now in the process of talks with institutions that are financing and the ones that finance the whole project.

The amount offered by Orlen is a very demanding task. It requires a lot of effort from all the sides to come up with the understanding. In the nearest future, the offer is binding till the end of the year 2025. We assume that we are going to get the initial understanding in between parties, shareholders, and Orlen, and we are going to do that under the condition of the consent of all the sites.

When it comes to Polyolefins, why do we want to sell Polyolefins to Orlen for PLN 1.022 billion if the construction of the plant costed over PLN 7 billion? Why are we selling it for a lower price? Shouldn't it be higher? Why is it so?

We want to underline that this is the public offer that has been submitted by the bidder, by Orlen. The offer is available to all potential other investors who could submit a different proposal. We underline that, of course, when looking at the cost of construction, the offer is several times lower, but the situation on the market is somewhat matching similar levels of quotations that we observe in other similar transactions, including similar installments which are being -- installations that are on the European Market. So, the offer is public, publicly available to others who could submit a counter proposal.

The question related to financial results. What was in over PLN 400 million of income of remaining operational activity?

In the result of the first quarter, we've also included one event that is one of this is an agreement with a Polish mining group. It's a settlement at the amount described in the financial report and in the ongoing report too.

Now, a question related to the segment of Chemicals for Defense. How the company sees the further cooperation in the sector with PGZ Company, PGZ?

The company PGZ, we cooperate with it in several scopes. First of them is preparation to production of the product components which are going to be used in production of explosives. The cooperation with Polish Armaments Group, meaning PGZ, has several sectors. The second one where we have big competencies is the engineering sector of the work on design.

We have communicated it yesterday that we've established yet another agreement with one of the companies that belong to the Polish Armaments Group. Both paths of cooperation are what we are going to continue.

Next question. In the fourth quarter, EBITDA result of Azoty is going to take into account the compensations for the industry.

In the fourth quarter, information on the energy-intensive sector, information related to your question will be published in the first quarter of the next year, because it's going to regard the fourth quarter of the previous year.

Thank you very much for your kind attention. Those were all the questions posed. So, see you on the next press conference.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]