Yara International ASA delivered weaker results in 2Q17 compared to 2Q16. Net income after non-controlling interests was NOK699 million (NOK2.56 per share), compared with NOK3072 million (NOK 11.23 per share) a year earlier. Excluding net foreign exchange gain and special items, the result was NOK2.90 per share compared to NOK6.29 per share in 2Q16.
Second quarter EBITDA excluding special items was NOK2873 million, down 27% compared with a year earlier, driven mainly by higher energy costs and lower realised prices. The company’s total fertilizer deliveries were 3% lower than in 2Q16. Adjusted for the divestment of Yara's CO2 business last year, industrial deliveries were 8% higher than a year earlier.
"Yara reports a weaker result than a year earlier, primarily reflecting lower commodity margins," said Svein Tore Holsether, President and CEO of Yara. "Our industry is facing strong over-supply of urea and other commodity nitrogen products, and we have expected this development for some time. We are, therefore, focused on improving our operations, and making growth investments primarily within premium fertilizer and industrial applications where margins are more stable. “
Margins in 2Q17 were impacted by both higher gas costs and lower realised prices. Yara's average realised fertilizer urea prices decreased 7%, while realised nitrate and NPK prices were 1% and 5% lower, respectively, than a year ago. Yara's average global gas costs were 24% higher than a year ago.
The global farm margin outlook and incentives for fertilizer application remains supportive overall. In Europe, Yara is seeing a normal rate of order taking at the start of the new season, at higher prices than a year ago, and expects roughly stable European nitrogen consumption for the 2017/2018 season. Based on current forward markets for oil products and natural gas, Yara's spot energy costs for the next two quarters are expected to be approximately NOK225 million higher than a year earlier.
Read the article online at: https://www.worldfertilizer.com/nitrogen/18072017/yara-announces-2q17-results/