Yara International ASA reported a huge increase in net income after minority interest to US$869 million ($2.98 per share) on sales of $4.73 billion for the second quarter ending June 30, 2008. This compares to the year-ago $237 million ($.81 per share) and $2.29 billion, respectively. Operating earnings and EBITDA for the recent quarter were $935 million and $1.24 billion, versus the year-ago $221 million and $370 million, respectively.
“It is with great pleasure that I report Yara’s strongest quarterly earnings so far,” said Yara President and CEO Thorleif Enger. “Since the IPO in March 2004 Yara has delivered 18 consecutive quarters with earnings above cost of capital. The improvement this quarter is mainly driven by strong demand giving higher fertilizer prices, only partly offset by increased raw material costs.”
Yara cited higher world grain prices and demand, and noted that urea has seen strong demand, particularly in Asia. The company noted that as projects in Oman and Egypt are delayed and China is out of the export market, that prices are driven up to a level where demand is curtailed and/or Chinese exports again become competitive. In the ammonia market, June outages and turnarounds created a shortage and prices shot up.
Yara noted that second-quarter fertilizer volumes were up 16 percent, with this primarily reflecting its acquisition of Kemira GrowHow. Deliveries in Europe increased by 21 percent for nitrates and 44 percent for NPK. Outside Europe, sales volumes increased by almost 7 percent, with most of that to Southeast Asia and Latin America.
During the quarter, Yara reported a gain of $86.6 million from the sale of its indirect equity holding in Chile’s SQM and a $15.75 million gain on the sale of 50 percent of Yara’s holding in China BlueChemical Ltd. It had a $17.72 million gain from the sale of chemical marketing activities in Brenntag as part of its agreement when acquiring Kemira GrowHow.
Fertilizer sales were 6.0 million mt during the second quarter, up from the year-ago 5.18 million. Total sales, including industrial, were 7.02 million mt, up from 5.89 million mt. Total production was 5.9 million mt, up from 4.95 million mt.
First-half fertilizer sales were 12.3 million mt, up from 10.4 million mt. Total sales, including industrial, were 14.3 million, up from 11.9 million. Total production was 12.14 million mt, up from 9.75 million mt.
First-half net income was $1.4 billion ($4.80 per share) on sales of $8.65 billion, compared to the year-ago $412 million ($1.40 per share) and $4.46 billion. Operating income and EBITDA were $1.47 billion and $1.99 billion versus the year-ago $392 million and $657 million, respectively.