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.
