May 1, 2014
Yara reports strong Q1 2014 results with record deliveries
Yara International ASA delivered strong first-quarter results, with record deliveries, which were impacted by lower commodity nitrogen prices, but premiums for Yara''s value-added products remained robust.
"Yara reports a strong first-quarter result reflecting record deliveries," said Jørgen Ole Haslestad, President and Chief Executive Officer in Yara. "While global commodity nitrogen markets have been impacted by increased export supply from China, healthy demand in both Europe and Latin America has supported value-added premiums and generated a strong Yara performance."
Yarareports first-quarter net income after non-controlling interests of NOK1,773 million (US$298 million) at NOK6.40 (US$1.08) per share, compared with NOK2,257 million (US$380 million) at NOK8.04 (US$1.35) per share a year earlier. Excluding net foreign exchange gain and special items, the result was NOK7.03 (US$1.18) per share compared with NOK8.52 (US$1.43) per share in first quarter 2013. First-quarter earnings before interests, taxes, depreciation and amortisations (EBITDA) excluding special items was NOK3,830 million (US$644 million) compared with NOK4,149 million (US$700 million) a year earlier.
Global Yara fertiliser deliveries were up 21% on first quarter last year, with strong demand for most products in all markets in addition to the effect of the acquisition of Bunge. Excluding volumes to Brazil, global Yara fertiliser deliveries were up 11% compared with first quarter 2013. Global Yara nitrate deliveries were up 8%, while compound nitrogen, phosphorus, potassium (NPK) deliveries increased 14%.
Yara''s average realised urea prices were 13% lower than a year ago. Realised nitrate and NPK compound prices decreased by 12% and 10% respectively, keeping premiums over urea and other commodity fertilisers stable overall, while NPK blend margins in Brazil were higher than last year.
Although an early spring pulled ahead some demand from second to first quarter, strong farm margins and tight supply in particular for nitrates indicate a positive European nitrogen market situation also for the second quarter. Yara has a strong European order book for the remainder of the season, and is also positively impacted by lower European gas prices. Based on current forward markets for oil products and natural gas, Yara''s European second and third quarter energy costs are expected to be approximately NOK1 billion (US$168 million) lower in total compared with a year earlier.