Yara International ASA said this week it has made “considerable progress” toward an initial public offering (IPO) of its Clean Ammonia (YCA) unit. However, Yara International President and CEO Svein Tore Holsether, speaking in a company earnings call on Feb. 8, conceded capital market conditions “have not been favorable.”
The company revealed last October it was delaying the planned IPO until 2023 due to unfavorable market conditions (GM Oct. 21, 2022). Yara announced last May that it was evaluating the division as an IPO on the Oslo Stock Exchange (GM May 6, 2022).
Holsether told analysts this week that despite the capital market conditions, “we have been working at full speed in setting up the Clean Ammonia unit as a separate structure and the carve-out and preparing it for a potential IPO.”
Also despite the capital market conditions, he said Yara has continued to mature the Yara Clean Ammonia project portfolio, both in blue and also in green ammonia.
“Our investments continue to be directed towards assets that are well positioned for the future and aligned with the goals of the Paris Agreement,” Holsether said, reminding analysts that Yara last year issued its first ‘Green Bond’.
Holsether did not comment in the earnings call on the current envisaged timeframe for the IPO.
However, a Yara spokesperson told Green Markets the evaluation of a potential IPO is still ongoing and ” the decision to proceed with a listing is therefore yet to be concluded.
“We are not in a rush and will take the necessary time to thoroughly evaluate our options. Yara/YCA will update the market in due course,” she said.
Holsether confirmed YCA’s green hydrogen demonstration plant at Yara’s ammonia production plant at Herøya Industripark in Porsgrunn, Norway will start producing this year (GM Jan. 28, 2022).
The 24 MW plant will have an annual capacity of around 10,000 kg/day of hydrogen, and will provide enough hydrogen to produce 20,500 mt/y of ammonia, which can be converted to 60,000-80,000 mt/y of green fertilizer.
Yara’s Clean Ammonia unit’s fourth-quarter EBITDA benefited from higher ammonia prices, posting an EBITDA excluding special items of $48 million higher than for the same year-ago period. The EBITDA boost was despite a 5% decline in deliveries compared with the fourth-quarter 2021 when deliveries were slightly above average levels, the company said.
For full-year 2022, the unit’s EBITDA excluding special items was $120 million higher than in 2021, mainly reflecting higher ammonia prices positively impacting margins.
Deliveries were 12% lower than a year earlier, due to lower production at Yara plants and discontinued sourcing from Russia. Yara reported those sourcing reductions were to a large extent successfully replaced by alternative supply sources throughout the year.