Cost of Goods Sold Is Rising Faster Than Revenue: “fosagro”’s Problems Reflect the State of russia’s Industry

“fosagro”, one of russia’s largest fertilizer producers, saw its net profit fall by 37% to $156 million in the third quarter of 2026. Over the first nine months, gross profit fell by 27% to $1.7 billion, while net profit dropped by approximately 67% to $389 million.

Production costs rose by more than 30% over the year. The prices of sulfur and sulfuric acid – both of which are essential for producing phosphate fertilizers – rose; over the past six months, the company spent about $503 million on them.

The company sells primarily for export, particularly to India, Brazil, and African countries, and is therefore dependent on global prices, demand, and shipping costs. Last year, it produced 12.2 million tons of products for more than 100 countries, but large volumes do not generate profit if selling prices lag behind costs.

Debt at the end of the third quarter stood at about $4.5 billion – by 11% more than at the end of 2025. Last year, capital expenditures totaled about $836 million, while free cash flow was only $253 million. If profits continue to fall, modernization will have to be financed through loans.

The picture is similar across russia’s industry as a whole: large volumes of production and exports are becoming less and less profitable.