Yara 1Q income off, deliveries at record pace
Yara International ASA reported first-quarter net income after non-controlling interests of NOK 1,773 million (NOK 6.40 per share), compared with NOK 2,257 million (NOK 8.04 per share) a year earlier. Excluding net foreign exchange gain and special items, the result was NOK 7.03 per share compared with NOK 8.52 per share in first quarter 2013. First-quarter EBITDA excluding special items was NOK 3,830 million compared with NOK 4,149 million a year earlier.
"Yara reports a strong first-quarter result reflecting record deliveries," said Jørgen Ole Haslestad, Yara president and CEO. "While global commodity nitrogen markets have been impacted by increased export supply from China, healthy demand in both Europe and Latin America has supported value-added premiums and generated a strong Yara performance.
Global Yara fertilizer deliveries were up 21 percent on first quarter last year, with strong demand for most products in all markets in addition to the effect of the acquisition of Bunge. Excluding volumes to Brazil, global Yara fertilizer deliveries were up 11 percent compared with first quarter 2013. Global Yara nitrate deliveries were up 8 percent, while compound NPK deliveries increased 14 percent.
Yara’s average realized urea prices were 13 percent lower than a year ago. Realized nitrate and NPK compound prices decreased by 12 percent and 10 percent respectively, keeping premiums over urea and other commodity fertilizers stable overall, while NPK blend margins in Brazil were higher than last year.
Although an early spring pulled ahead some demand from second to first quarter, Yara said strong farm margins and tight supply in particular for nitrates indicate a positive European nitrogen market situation also for the second quarter. Yara said it has a strong European order book for the remainder of the season, and is also positively impacted by lower European gas prices. Based on current forward markets for oil products and natural gas (April 22) Yara’s European second and third quarter energy costs are expected to be approximately NOK 1 billion lower in total compared with a year earlier.