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Yara reports improved margins in a slow off-season market

Published by , Assistant Editor
World Fertilizer,

Net income after non-controlling interests was US$157 million (US$ 0.58/share), compared with US$104 million (US$ 0.38/share) a year earlier.

Excluding currency effects and special items, the result was US$0.60/share compared with US$0.49/share in the 4Q17. Yara's Board of Directors will propose to the Annual General Meeting a dividend payment of NOK6.50/share for 2018.

4Q18 EBITDA excluding special items was US$424 million, up 21% compared with a year earlier, reflecting higher production margins, contribution from Yara's growth projects and a stronger US dollar.

"Yara shows improved results in 4Q18 with EBITDA excluding special items up 21%. We saw improved margins in a slow off-season market, and the improvement programme continued to deliver," said Svein Tore Holsether, President and Chief Executive Officer of Yara.

"Following a period of heavy investments, our focus in 2019 is on ramping up our current growth projects, continued operational improvement, and maintaining strong capital discipline", said Holsether.

Total fertilizer deliveries were 2% higher compared with a year earlier, driven by the Babrala acquisition in India and the Cubatão acquisition in Brazil. Industrial deliveries were 9% higher than a year earlier. Excluding the acquisitions, fertilizer deliveries were down 7% while industrial deliveries were in line with a year earlier. Yara's ammonia production and finished fertilizer production were both 6% higher. Excluding portfolio effects, ammonia and finished fertilizer production was respectively 11% and 2% lower.

The global urea supply-demand balance looks set to remain positive longer term, as nitrogen supply growth is forecast to decline from 2019, and lead times for new projects are typically three to five years. Also, demand growth is likely to pick up since increased grain production is needed to keep pace with consumption and global grain stocks are relatively low, particularly excluding China.

The Yara Improvement Programme is on track to reach at least US$500 million of annual EBITDA improvement by 2020, of which US$355 million has been realised as of 4Q18. Yara has identified additional improvement potential and plans to expand both the scope and timeframe of the programme during 1H19.

Yara's Board of Directors will propose to the Annual General Meeting a dividend payment of NOK6.50/share for 2018.

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