Oslo (2008-07-15): Yara International ASA reports its strongest quarterly result so far, mainly driven by strong demand expanding urea, nitrate and NPK margins.
Yara reports second-quarter net income after minority interest of NOK 4,415 million (NOK 15.14 per share), compared with NOK 1,422 million (NOK 4.85 per share) last year. Operating income was NOK 4,749 million compared with NOK 1,329 million in the same quarter last year. EBITDA for the quarter was NOK 6,300 million compared with NOK 2,222 million last year.
"It is with great pleasure that I report Yara's strongest quarterly earnings so far. Since the IPO in March 2004 Yara has delivered 18 consecutive quarters with earnings above cost of capital. The improvement this quarter is mainly driven by strong demand giving higher fertilizer prices, only partly offset by increased raw material costs", says Thorleif Enger, President and CEO of Yara International ASA.
"We have over the last years initiated several significant growth initiatives and established a solid platform for growth in an attractive industry. The acquisition of Saskferco further strengthens Yara's scale and position in North America by bringing in efficient production capacity in proximity to one of the key global fertilizer markets", says Thorleif Enger.
Downstream segment sales increased 16% from second quarter last year. Excluding the effect of the Kemira GrowHow acquisition, underlying growth was 2%, mainly due to increased sales in Europe. The substantial margin expansion realized in the first quarter continued into the second quarter, reflecting a tight market and strong focus on central price management combined with timing effects on raw materials and product positions. The Industrial segment continues to see strong growth in most product groups, especially for technical ammonium nitrate, which was up 30%, and environmental products, which grew more than 50%. However, Industrial margins were temporarily reduced by time lags in nitrogen chemical sales contract prices. Upstream segment fertilizer production, excluding the effects of the Kemira GrowHow acquisition, was in line with last year despite maintenance stops. Upstream benefited from increased fertilizer prices, more than compensating for energy costs, which increased in line with expectations. The phosphoric acid business contributed significantly to Upstream's improved results due to substantially higher prices.
Going forward, strong grain prices suggest solid farm profitability and fertilizer demand in the coming season. The new season for nitrates in Europe has started strongly, enabling early price increases, while further NPK margin expansion may be restricted by demand curtailment on phosphate and potash due to higher prices.
For further information
The entire quarterly report and the presentation material used during the press and analyst conference are available on
Torgeir Kvidal, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 91 339 832
Hamed Brodersen, Media Relations
Cellular (+47) 40 468 110
Yara International ASA is a leading chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers and agronomic solutions, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that safeguard air and water purity and preserve food quality. Yara's global workforce of more than 8,000 employees represents great diversity and talent enabling Yara to remain a leading performer in its industry.www.yara.com