Yara International ASA, Oslo, reported a 142 percent increase in second-quarter net income, to $539 million on revenue of $3.95 billion, up from the year-ago $223 million and $2.87 billion, respectively. Basic earnings per share were $2.10 versus the prior year’s $0.83 per share. Excluding currency effects and special items, second-quarter basic earnings per share were $1.42 compared with $1.06 a year ago.
Second-quarter EBITDA excluding special items was 32 percent up on the year, at $775 million versus the year-ago $588 million. Revenue was up 38 percent.
Net income, adjusted EBITDA, and revenue all beat analysts’ average estimates, according to a Bloomberg consensus.
| 2Q result | Analysts’ average estimates | Range | |
| Net income $ million | $539 | $372.2 | $302.0 to $448.0 |
| Adjusted EBITDA $ million | $775 | $752.1 | $657.0 to $816.0 |
| Revenue $ billion | $3.95 | $3.48 | $2.93 to $4.14 |
“Yara delivered its twelfth consecutive quarter with improved capital returns, with EBITDA excluding special items up 32 percent reflecting improved pricing and recovering premiums,” said Yara International President and CEO, Svein Tore Holsether.
He said the company’s realized premiums have started to normalize following an earlier compression of premiums amid the rapid rise in commodity nitrogen prices.
The improved pricing more than offset increased energy costs, fixed costs, and currency effects, the company said.
Yara’s industrial business has also picked up, following weaker demand during the start of the COVID-19 pandemic.
Holsether said Yara cash flow improved further in the reporting quarter, with almost $3 billion of free cash flow generated over the last four quarters. As a result, the company will propose a NOK20 per share additional dividend payment in the third quarter, in line with Yara’s capital allocation policy. It already paid an annual dividend of NOK20 per share in May.
Yara’s total deliveries for the second quarter ticked up by just over 1 percent, to 9.78 million mt, up from the year-ago 9.65 million mt. But fertilizer deliveries fell 3 percent to 7.35 million mt, down from 7.58 million mt.
In Europe, deliveries were down 16 percent. Strong fertilizer price increases led buyers to cover only the necessary volumes for current season application, following relatively strong purchasing earlier this season, the company said.
For the Americas, overall deliveries decreased 2 percent, mainly reflecting phasing of deliveries following the early season last year.
Industrial product deliveries rose 20 percent to 1.84 million mt, reflecting higher deliveries, improved margins, and improved reliability in the production units, the company said. Ammonia trade increased 13 percent to 589,000 mt.
Yara’s gas costs for the third quarter are expected to be $380 million higher than a year earlier, and for the fourth quarter $300 million higher than a year earlier.
First-half net income came in at $553 million ($2.13 per share) on revenues of $7.09 billion, up from the year-ago $105 million (0.39) and $5.72 billion, respectively. Adjusted earnings per share was $2.22 versus the previous year’s $1.45.
Six-months EBITDA excluding special items increased 25 percent, to $1.36 billion, up from $1.09 billion.
“Yara’s industry fundamentals are robust, as the twin challenges of resource efficiency and environmental footprint require significant transformations within both agriculture and the hydrogen economy,” said Holsether.
Yara’s leading food solutions and ammonia positions are well placed to both address and create business opportunities from these challenges, he said.
Yara Production and Deliveries
| ‘000 mt | 2Q-2021 | 2Q-2020 | 1H-2021 | 1H-2020 |
| Production | ||||
| Ammonia | 1,891 | 1,868 | 3,684 | 3,792 |
| Finished fertilizer and industrial products (excluding bulk blends)1 | 5,074 | 5,108 | 10,233 | 10,418 |
| Yara Deliveries | ||||
| Ammonia trade | 589 | 523 | 1,047 | 943 |
| Fertilizer | 7,347 | 7,584 | 14,201 | 14,427 |
| Industrial product | 1,843 | 1,542 | 3,610 | 3,263 |
| Total deliveries | 9,779 | 9,648 | 18,858 | 18,634 |
1 Including Yara share of production in equity-accounted investees, excluding Yara-produced blends
Yara Deliveries
| ‘000 mt | 2Q-2021 | 2Q-2020 | 1H-2021 | 1H-2020 |
| Crop Nutrition Deliveries | ||||
| Urea | 1,800 | 1,539 | 3,168 | 2,965 |
| Nitrate | 1,171 | 1,357 | 2,763 | 3,015 |
| NPK | 2,280 | 2,477 | 4,728 | 4,848 |
| CN | 476 | 463 | 958 | 861 |
| UAN | 378 | 505 | 761 | 861 |
| DAP/MAP/SSP | 335 | 301 | 482 | 449 |
| MOP/SOP | 516 | 443 | 665 | 566 |
| Other products | 392 | 499 | 676 | 861 |
| Total Crop Nutrition Deliveries | 7,347 | 7,584 | 14,201 | 14,427 |
| Europe Deliveries | ||||
| Urea | 263 | 244 | 556 | 552 |
| Nitrate | 764 | 1,041 | 1,920 | 2,310 |
| NPK | 471 | 533 | 1,395 | 1,471 |
| CN | 129 | 152 | 265 | 262 |
| Other products | 409 | 447 | 821 | 892 |
| Total Deliveries Europe | 2,035 | 2,417 | 4,957 | 5,487 |
| Americas Deliveries | ||||
| Urea | 786 | 715 | 1,416 | 1,336 |
| Nitrate | 304 | 243 | 670 | 592 |
| NPK | 1,305 | 1,502 | 2,420 | 2,554 |
| CN | 302 | 272 | 602 | 522 |
| DAP/MAP/SSP | 321 | 274 | 429 | 384 |
| MOP/SOP | 486 | 421 | 606 | 521 |
| Other products | 333 | 489 | 576 | 748 |
| Total Deliveries Americas | 3,837 | 3,915 | 6,718 | 6,658 |
| North America | 1,064 | 1,085 | 2,022 | 1,944 |
| Brazil | 2,209 | 2,292 | 3,675 | 3,755 |
| Latin America excluding Brazil | 564 | 538 | 1,021 | 959 |
| Africa & Asia Deliveries1 | ||||
| Urea | 751 | 580 | 1,197 | 1,077 |
| Nitrate | 103 | 74 | 173 | 113 |
| NPK | 504 | 442 | 914 | 823 |
| CN | 46 | 39 | 91 | 77 |
| Other products | 71 | 117 | 152 | 192 |
| Total Deliveries Africa & Asia | 1,475 | 1,252 | 2,527 | 2,282 |
| Asia | 1,151 | 895 | 1,962 | 1,688 |
| Africa | 324 | 357 | 565 | 594 |
| Industrial Solutions Deliveries | ||||
| Ammonia2 | 132 | 137 | 282 | 278 |
| Urea2 | 410 | 354 | 807 | 764 |
| Nitrate3 | 298 | 272 | 578 | 549 |
| CN | 46 | 42 | 92 | 84 |
| Other products5 | 420 | 301 | 826 | 671 |
| Water content in industrial ammonia and urea | 537 | 436 | 1,024 | 917 |
| Total Industrial Solutions Deliveries | 1,843 | 1,542 | 3,610 | 3,263 |
1 The Africa and Asia business also includes Oceania
2 Pure product equivalents
3 Including AN Solution
4 Including sulfuric acid, ammonia, and other minor products