Feb 17, 2009
Yara reports a negative fourth-quarter net income after minority interest of NOK 2,109 million (negative NOK 7.27 per share), compared with a profit of NOK 2,044 million (NOK 7.01 per share) last year. Excluding net foreign exchange gains/losses and special items, the result was approximately NOK 0.10 negative per share compared with NOK 3.86 per share in fourth quarter 2007. Fourth-quarter operating income was NOK 408 million compared with NOK 1,494 million last year. EBITDA for the quarter was NOK 1,626 million compared with NOK 2,531 million in the fourth quarter last year. Yara's board will propose to the Annual General Meeting a dividend payment of NOK 4.50 per share for 2008.
"The fertilizer industry has since September experienced an unprecedented slow-down in deliveries and decline in international fertilizer prices. Despite challenging market conditions, we deliver a strong underlying performance excluding write-downs on third-party sourced inventories and currency effects on debt, demonstrating the strengths in Yara's flexible business model. We have taken action to mitigate the effects of the slow-down by reducing third-party sourcing and curtailing production, and we are benefiting from cheaper ammonia import," said Jørgen Ole Haslestad, President and CEO of Yara International ASA.
"Farm economics should support strong fertilizer demand for the current season, and Yara is well-positioned to benefit from such a recovery. Our flexible cost structure also protects us in the event of a further delayed recovery, should farmers choose not to apply optimum amounts of fertilizer this season. However, a drop in fertilizer application would negatively affect food production, thereby tightening grain markets further and requiring a stronger recovery in fertilizer demand next season", said Jørgen Ole Haslestad.
Full-year net income after minority interest was NOK 8,228 million (NOK 28.27 per share), the best so far for Yara, compared with NOK 6,037 million (NOK 20.60 per share) for 2007. Excluding net foreign exchange gains/losses and special items, the result was NOK 36.28 per share compared with NOK 15.91 per share in 2007. Full-year operating income was NOK 12,281 million, compared with NOK 4,987 million last year. EBITDA was NOK 17,917 million compared with NOK 8,441 million last year.
Fourth-quarter fertilizer sales volumes decreased 43% from last year. Deliveries in all regions except North America were down, with the largest declines in Latin America and Asia. Inventories of third-party sourced products were written down by NOK 1.7 billion to reflect lower market prices. Industrial segment deliveries declined due to lower sales to the European process chemical industry. The drop was partly offset by continued growth in environmental products and ammonium nitrate to the mining industry. The Upstream segment delivered strong results, as fertilizer prices were higher than last year despite a falling trend during the quarter, and the price improvement was only partly offset by increased energy and raw material costs compared with 2007.
Yara's first-half 2009 European energy cost is expected to be NOK 2.2 billion lower then last year. Going forward Yara will benefit from the acquisition of Saskferco in Canada effective 1 October 2008 and the 50/50 joint venture in Libya (Lifeco) established 9 February 2009. These initiatives increase the share of Yara's energy consumption outside Europe from 30% to 38%.
For further information
Torgeir Kvidal, Investor Relations
Telephone (+47) 24 15 72 95
Cellular (+47) 91 339 832
Bente Slaatten, Media Relations
Cellular (+47) 91 60 62 15
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.