Yara International ASA delivered strong third-quarter results, with record fertilizer deliveries and continued margin benefit from lower European gas price.
"Yara reports a strong third-quarter result with record deliveries, reflecting both organic growth and the Bunge acquisition in Brazil," said Torgeir Kvidal, Acting Chief Executive Officer of Yara.
"Our European production plants performed well, with both higher production and improved margins as natural gas cost has declined," said Torgeir Kvidal.
Yara reports third-quarter net income after non-controlling interests of NOK 1,707 million (NOK 6.18 per share), compared with NOK 1,571 million (NOK 5.66 per share) a year earlier. Excluding net foreign exchange loss and special items, the result was NOK 7.62 per share compared with NOK 5.62 per share third quarter 2013. Third-quarter EBITDA excluding special items was NOK 4,002 million compared with NOK 3,223 million a year earlier.
Global Yara fertilizer deliveries were up 16% on third quarter last year, mainly driven by Brazil with the inclusion of the Bunge volumes from 8 August 2013. Excluding Brazil, fertilizer deliveries were up 6% compared with third quarter 2013, mainly due to higher deliveries of urea and nitrates. Industrial sales increased by 7% compared with third quarter 2013 with Air1 deliveries up 34% as demand remains strong in both the US and Europe.
Yara's margins benefited from lower energy costs during the third quarter. While Yara's global average oil and gas cost decreased 19% in the third quarter, Yara's average realized urea prices increased 3% compared to a year ago and realized nitrate prices were at the same level as last year. Industrial margins increased for all main product groups except technical ammonium nitrate.
Global nitrogen demand remained strong during the third quarter, while supply curtailments continued in several key export locations. Third-quarter nitrogen fertilizer deliveries in Western Europe were up 5% on last year, with deliveries particularly strong in September. US nitrogen deliveries in the quarter are estimated to be 12% higher than a year ago.
Lower European natural gas prices have improved the relative competitiveness of European ammonia/urea plants. Based on current forward markets for oil products and natural gas Yara's European energy costs next two quarters are expected to be NOK 1,150 million lower than a year earlier.
