Apr 18, 2008
Yara reports first-quarter net income after minority interest of NOK 2,808 million (NOK 9.63 per share), compared with NOK 1,085 million (NOK 3.67 per share) last year. Excluding net foreign exchange gain and special items, the result was approximately NOK 8.98 per share compared with NOK 3.59 per share in first quarter 2007. EBITDA for the quarter was NOK 3,988 million compared with NOK 1,787 million last year. First-quarter operating income was NOK 2,860 million compared with NOK 1,063 million last year.
"Our results increased strongly in the first quarter, driven by substantial margin expansion for nitrate and NPK fertilizer. This demonstrates the value of Yara's European position, helped by a strong European fertilizer market, and our unique position in more high-value fertilizer products like nitrates and NPKs", said Thorleif Enger, President and Chief Executive Officer of Yara.
"The global fertilizer market has remained tight during the last year, with global production running close to full capacity. The market has been balanced by a combination of higher prices reducing demand and increased Chinese exports attracted by high prices. The recent announcement of 135% Chinese export tax for fertilizer will further tighten the global market", said Thorleif Enger.
Downstream segment sales increased 20% from first quarter last year. Excluding the effect of the Kemira GrowHow acquisition, underlying growth was 4%, mainly in Southeast Asia and Brazil. In the current market situation with steep price increases, Yara also benefited from timing effects on raw materials and product positions. The Industrial segment continues to see strong growth in most product groups, especially for technical ammonium nitrate and environmental products. The Upstream segment delivered a strong production performance, with finished fertilizer up 5% excluding the effects of the Kemira GrowHow acquisition. Energy costs increased in line with expectations, but were more than compensated for by increased fertilizer prices.
Global food markets remain tight, with grain prices at historical high levels, continuing to encourage farmers to expand acreage and increase fertilizer application rates, even at higher fertilizer prices. The prospects for the fertilizer market look healthy as start-ups of new production capacity are currently running at lower rates than demand growth. Energy costs are expected to continue increasing as recent oil price increases impact Yara's oil-linked gas contracts.
Torgeir Kvidal, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 91 339 832
Hamed Brodersen, Media Relations
Cellular (+47) 40 468 110
Yara International ASA is a leading chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers and agronomic solutions, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that safeguard air and water purity and preserve food quality. Yara's global workforce of more than 8,000 employees represents great diversity and talent enabling Yara to remain a leading performer in its industry.