Yara 2Q deliveries strong, margins down
Yara International ASA reported second-quarter net income after non-controlling interests of NOK 3,072 million ($361.1 million, NOK 11.23 per share), compared with the year-ago NOK 2,916 million (NOK 10.59 per share). Excluding net foreign exchange gain and special items, the result was NOK 6.37 per share compared with NOK 9.58 in second quarter 2015. Second-quarter EBITDA excluding special items was NOK 3,958 million compared with NOK 5,055 million a year earlier. The EBITDA for second quarter 2016 includes a NOK 1,553 million gain from the divestment of Yara’s European CO2 business.
Second quarter revenues and other income were 7 percent lower at NOK 25,866 million compared with the year-ago NOK 27,929 million.
“Yara reports strong deliveries and production, but margins declined due to lower fertilizer prices globally. The challenging marker situation underlines the need to further strengthen our operations,” said Svein Tore Holsether, Yara president and CEO.
Global Yara fertilizer deliveries were in line with second quarter 2015, at 6.921 million mt compared with 6.894 million mt. But deliveries of Yara-produced products were 8 percent higher than a year ago, driven mainly by higher nitrate deliveries in Europe. Fertilizer deliveries in Europe were 4 percent higher than a year earlier at 2.293 million mt against the year-ago 2.204 million mt. European deliveries of Yara-produced nitrates and NPK were 14 percent and 3 percent higher, respectively. Adjusting for the divestment of the CO2 business – effective from June 1, Industrial segment sales volumes were in line with second quarter 2015. Yara’s margins declined compared to second quarter last year, as sales prices fell more than input costs.
Yara’s average realized urea and nitrate prices decreased around 25 percent. NPK premiums measured in absolute terms were in line with second quarter 2015. Yara’s average global gas costs were 33 percent lower than a year ago.