Yara 1Q sales down, sales volumes off 22 percent

Oslo-Yara International ASA reported net income of US$131.7 million ($.45 per share) on sales of $2.5 billion for the first quarter ending March 31, 2009, versus the year-ago $535.2 million ($1.81 per share) and $3.9 billion, respectively. First-quarter EBITDA and operating income were $297.2 million and $174.5 million, versus the year-ago $751.0 million and $538.6 million, respectively. “Yara’s first quarter fertilizer sales were up significantly from the fourth quarter, and the pace of sales increased during the quarter,” said Jorgen Ole Haslestad, Yara president and CEO. “By the end of the quarter deliveries were running closer to last year and Yara defended its market share in Europe, even as imports increased. Our strong cash flow generation is the result of competing well for deliveries to customers, cutting production and thereby reducing inventories.” Yara fertilizer sales were 4.88 million mt in the quarter, down from the year-ago 6.3 million mt. Total volumes sold were 5.76 million mt, down from 7.25 million mt. Ammonia production was 1.4 million mt, down from 1.75 million mt. Total production was 5.16 million mt, down from 6.24 million mt. Yara predicted that a drop in use will lead to renewed demand, citing USDA estimates that corn production will be down 14 percent in Brazil and 39 percent in Argentina. Yara said there is no drop in food consumption to counter-balance the production cuts. In the meantime, Yara is benefiting from lower energy costs, its third party sourcing is minimized, and it is halving NPK production in the second quarter.