Yara International ASA has revealed strong results for the first quarter of 2008, amid a solid European market with significant margin expansions for nitrate and NPK fertiliser and a resolutely tight food market.
Yara reports first-quarter net income after minority interest of NOK 2.808m, compared with NOK 1.085m last year, while EBITDA for the quarter stood at NOK 3.988m compared with NOK 1.787m the year previous. First-quarter operating income was NOK 2.860m versus a figure of NOK 1.063m last year.
“Our results increased strongly in the first quarter, driven by substantial margin expansion for nitrate and NPK fertiliser. This demonstrates the value of Yara’s European position, helped by a strong European fertiliser market, and our unique position in more high-value fertilizer products like nitrates and NPKs,” said Thorleif Enger, President and CEO of Yara.
Explaining the reasons for such improvements, Enger, “The global fertiliser 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 fertiliser will further tighten the global market$quot;, said Thorleif Enger.
Downstream segment sales increased 20% from first quarter last year, excluding the effect of the Kemira GrowHow acquisition, with underlying growth at 4% - mainly in Southeast Asia and Brazil. The industrial segment continues to see strong growth in most product groups, especially for technical ammonium nitrate and environmental products.
Global food markets remain tight, with grain prices at historical high levels and continuing to encourage farmers to expand acreage and increase fertiliser application rates, even at higher fertiliser prices. Prospects for the fertiliser market look healthy as start-ups of new production capacity are currently running at lower rates than demand growth.