Net income after minority interest was NOK 8,228 million (NOK 28.27 per share) in 2008 , up from NOK 6,037 million (NOK 20.60 per share) in 2007. Yara’s after-tax measure for return on capital, CROGI (Cash Return On Gross Investment), was at 22.8 percent  compared to a target of minimum ten-percent average over the business cycle. Operating income was NOK 12,281 million, up from NOK 4,987 million in 2007. EBITDA increased to NOK 17,917 million , from NOK 8,441 million in 2007. Yara’s revenue and other income was NOK 88.8 billion in 2008, up from 57.5 billion in 2007.
Yara’s 2008 results were improved considerably from last year, due to higher fertilizer prices. As fertilizer prices decreased from September third-party sourced inventory positions were written down by NOK 2.1 billion to reflect market prices. Fertilizer volumes decreased by four percent compared to 2007, due to the slow-down in fourth quarter. Oil and gas costs in Europe increased significantly due to an increase in oil-linked and hub gas prices.
Despite major production curtailments in November and December, ammonia production increased 11 percent and finished fertilizer production increased 26 percent from 2007, primarily reflecting the Kemira GrowHow acquisition.
Yara is well on track to reach targeted synergies from the Kemira GrowHow acquisition, and cash flow from the acquired activities increased substantially due to improved margins on phosphates, NPK and nitrates.
Cash, ratios and debt
Net cash from operating activities in 2008 was NOK 3,986 million, reflecting strong earnings and dividends of NOK 1,223 million from non-consolidated investees, partly offset by increased net operating capital due to higher prices and deliberately increased inventories. Net cash from operating activities in 2007 was NOK 4,305 million. Net cash used in investing activities for 2008 was NOK 12,786 million, including the Saskferco acquisition.
Yara maintained its strong financial position during 2008. The debt/equity ratio increased from 0.42 to 0.82  due to significant investments, the major being the Saskferco acquisition, higher net operating capital and an increased NOK/USD exchange rate, as a large part of Yara’s loans are USD denominated. Yara’s net interest-bearing debt at the end of the year was NOK 24,794 million while total assets equaled NOK 80,887 million.
Total majority shareholders’ equity as of Dec. 31, 2008, amounted to NOK 30,103 million. At the end of the year, Yara had NOK 3,195 million in cash and cash equivalents and NOK 10,659 million in un-drawn committed bank facilities. We consider the company’s cash position and financial strength to be satisfactory.
Yara achieves a knowledge margin in the market based on its insight in local markets, close customer relations, agronomic competence and ability to develop new product offerings from its existing production base. To support this knowledge margin and to seize opportunities from some of today’s pressing global challenges, Yara’s research and development targets both agronomical activities and product and process improvements. Several of the latter have led to commercialization of environmental solutions, such as an N2O catalyst and NOx abatement technologies. In 2008, Yara’s research and development costs were NOK 126 million, compared with NOK 94 million in 2007.
In the opinion of the Board of Directors, the consolidated financial statements provide a true and fair view of the group’s financial performance during 2008 and financial position at Dec. 31, 2008. According to section 3-3 of the Norwegian Accounting Act, we confirm that the consolidated financial statements and the financial statements of the parent company have been prepared based on the going concern assumption and that it is appropriate to use this assumption.
Yara’s total risk exposure is analyzed and evaluated at corporate level. Risk evaluations are integrated in all business activities both at corporate and business unit level, increasing Yara’s ability to take advantage of business opportunities. Yara’s most significant market risk is related to the margin between nitrogen fertilizer prices and natural gas prices. Although there is a positive long-term correlation between these prices, margins are influenced by the supply/demand balance for food relative to energy.
Yara has a well-established system for credit and currency risk management with defined limits for exposure, both at customer and at country level. Yara’s geographically diversified portfolio reduces the company’s overall credit and currency risk. As the fertilizer business is essentially a US dollar business, with both revenues and raw material costs priced in USD, Yara seeks to maintain its debt primarily in USD, thereby reducing its overall USD currency exposure. Yara has a conservative financing strategy and aims to hold the majority of its net interest-bearing debt in long-term bonds with fixed interest rates.