The company claims that net income after non-controlling interests was NOK709 million (NOK2.60 per share). This is compared to NOK821 million (NOK3.00 per share) in last year’s third quarter. Not including net foreign exchange gain and special items, the result was NOK3.21 per share compared to NOK3.43 per share in 3Q16.
EBITDA in 3Q17, not including special items, was NOK2728 million. This is an 8% decrease compared to 3Q16. Yara claims that higher energy costs and a weaker US dollar more than offset the impact of increased deliveries.
The CEO of Yara, Svein Tore Holsether, said: “Yara reports a strong production performance for the quarter, with several production records and the Yara Improvement Program delivering ahead of schedule.
“Our financial results are weaker than a year earlier due to lower commodity fertilizer margins. Although prices picked up towards the end of the quarter, we continue to see the market as fundamentally supply-driven, and therefore remain focused on strengthening our own operations.”
Yara claims that fertilizer deliveries in 3Q17 were 6% higher than in 3Q16, driven largely by higher urea deliveries in North America, as well continued growth in Brazil. There was also a 6% increase in industrial deliveries compared to a year earlier. Yara’s production system performed well during the quarter, with ammonia and finished fertilizer production 7% and 8% higher (respectively) than a year before. The company also claims that its average realised nitrate prices increased by 10%, whilst realised NPK and urea prices were 3% and 2% higher, respectively, than a year ago.
Overall, Yara claims the global farm margin outlook and incentives for fertilizer application remain supportive, adding that the price trend for cereal, dairy and meat has been positive year to date. In Europe, nitrogen industries deliveries in the third quarter were 1% higher compared to a year before. In the statement, Yara claims that it saw strong order-taking during the quarter, which it claims was caused by the tighter global nitrogen situation. As a result, the company claims that it enters the fourth quarter with more nitrate orders than usual. The time lag between market prices and realised prices on Yara’s fourth quarter deliveries is expected to be approximately 3 months. Based on current forward markets for oil products and natural gas, Yara expects that its spot energy costs for the coming two quarters will be approximately NOK430 million higher than a year before.
The company claims that its Yara Improvement Program is on track to reach a minimum of US$500 million of yearly EBITDA improvement by 2020. Of this, US$210 million has been realised as of 3Q17.
Read the article online at: https://www.worldfertilizer.com/nitrogen/19102017/yara-international-releases-3q17-results/