Source : EuropeanMarkets
Yara’s third-quarter net income after non-controlling interests was NOK 4,004 million, compared with NOK 1,707 million a year earlier. Excluding net foreign exchange gain/(loss) and special items, the result was NOK 2,038 million, compared with NOK 2,105 million in third quarter 2014. The corresponding earnings per share were NOK 7.41 compared with NOK 7.62 a year earlier.
“Yara reports a strong third-quarter result with increased deliveries reflecting recent acquisitions in Latin America,” said Svein Tore Holsether, President and Chief Executive Officer of Yara.
“I am pleased to see continued growth in our premium product deliveries during the quarter, with the strongest growth in overseas markets,” said Svein Tore Holsether.
Outlook
Despite a third consecutive strong grain harvest globally, the US Depart- ment of Agriculture projects global grain stocks to decline somewhat,
as consumption continues to grow. The global farm margin outlook and incentives for fertilizer application remain supportive overall, especially for key crop exporting regions such as Europe and Latin America where local currencies have depreciated relative to the US dollar.
Chinese urea production and export costs are likely to remain the main ref- erence point for global nitrogen pricing going forward, given the record vol- umes exported over the last year. Recently recorded fob prices around USD 250 per tonne are likely close to a break-even level for marginal Chinese producers, but continued fluctuations can be expected also going forward due to both seasonality and variability in different plants’ cost bases.
The European season has started well, with third-quarter nitrate deliver- ies and industry stocks at normal levels. European nitrate premiums are today close to the average for the last years.
Demand for higher quality fertilizers like nitrates and compound NPKs continues to grow, especially outside Europe where Yara targets higher value crop segments.
In Brazil, industry deliveries have picked up as expected, with third-quar- ter fertilizer deliveries in line with a year earlier. Following a slow first half amid delayed purchasing and lower credit availability, Yara sees improved demand in Brazil going forward, due to increased agricultural competi- tiveness compared with other exporting regions.
Yara has signed a non-binding Heads of Terms for the sale of European CO2 business and its remaining 34% stake in the Yara Praxair Holding AS joint venture. Closing is expected to take place in first quarter 2016, subject to binding agreements and necessary approvals. The two transac- tions are expected to generate a total post-tax gain of EUR 150 million.
A weaker euro and lower gas prices have improved the relative competitiveness of European fertilizer capacity. Based on current forward markets for oil products and natural gas (13 October) Yara’s European energy costs for fourth quarter 2015 and first quarter 2016 are expected to be respec- tively NOK 550 million and NOK 300 million lower than a year earlier. The estimates may change depending on future spot gas prices.
Source : Yara International ASA Third quarter results 2015, 21 October 2015
