Friday, July 24, 2015

24/07/2015: Yara reports strong second-quarter results

Yara International ASA delivered strong second-quarter results, with increased deliveries and improved margins. Both fertiliser and industrial deliveries were higher, reflecting both organic growth and recent acquisitions.

"Yara reports strong second-quarter results with higher deliveries and improved margins, reflecting continued lower natural gas cost and a stronger US dollar," said Torgeir Kvidal, Acting President and Chief Executive Officer of Yara.

"Sales of our premium products continue to grow in Latin America and Asia, reflecting both the acquisition of OFD and continued organic growth," said Torgeir Kvidal.
Image: Ben Sutherland
Yara reports second-quarter net income after non-controlling interests of UK£229 million (UK£0.83 per share), compared with UK£180million (UK£0.65 per share) a year earlier. Excluding net foreign exchange loss and special items, the result was UK£0.75 per share compared with UK£0.61 per share second quarter 2014. Second-quarter EBITDA excluding special items was UK£398 million compared with UK£329 million a year earlier (NB: figures are converted from NOK to UK£ and correct to three significant figures at time of posting).

Global Yara fertiliser deliveries were up 6 percent from second quarter 2014, mainly due to the acquisitions of OFD in Latin America and Galvani in Brazil. Excluding OFD and Galvani, deliveries were down 2 percent. In Europe, fertiliser deliveries were in line with last year, with strong nitrate volumes offsetting lower NPK deliveries.

Nitrate deliveries were up 14 percent compared with last year, reflecting a positive start to the new fertiliser season in Europe. Fertiliser deliveries outside Europe were up 9 percent, however excluding OFD and Galvani, deliveries were down 3 percent reflecting a weaker Brazilian market. Industrial sales volumes increased by 9 percent compared with second quarter 2014 driven by growth in sales of process chemicals in Europe and environmental products.

Yara's margins benefitted from lower energy costs and a stronger US dollar. While Yara's average global gas costs were 17 percent lower than a year ago, realised urea prices decreased 12 percent, realised nitrate prices were down 20 percent and compound NPK prices decreased on average 8 percent compared with second quarter 2014.

Global nitrogen demand remained strong during the second quarter, with global nitrogen commodity prices rebounding during the second quarter as the Chinese domestic market tightened due to a surge in exports. Season-to-date nitrogen industry deliveries in Western Europe were down 2 percent but in line with the five-year average.

In Brazil, year-to-date deliveries are 10 percent lower than last year but a pickup is expected during second half. In Europe, Yara enters the third quarter with a healthy order book, and based on current forward markets for oil products and natural gas, Yara's European energy costs for the next two quarters are expected to be NOK 400 million lower than a year earlier.

Link to report and presentation here.

Link to webcast 21 July at 09:30 CEST here.


Visit the Yara site HERE.

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