Yara International ASA continues to show strong performance in more turbulent markets

Higher energy costs and droughts have impacted the fertilizer industry this year. As the company today meets with its major investors and analysts for Yara's second Capital Markets Day, Yara CEO Thorleif Enger presents an optimistic view and an ambitious growth agenda for the company.

Yara's ambition is to further strengthen its position as the world leader in the nitrogen business, developing its low-cost energy platform while increasing its sales of value-added products.

CEO Thorleif Enger, said: \\$quot;Our cash flow (EBITDA) has grown considerably during the last five years due to improved underlying performance and better market prices. We want to utilize this platform to further strengthen our company.

\\$quot;Our ambition is to become the industry shaper with respect to return on capital, product leadership and financial discipline within the fertilizer industry.”

Yara has delivered steadily improving results for its downstream and industrial segments over the last five years. The upstream segment has taken advantage of the high gas price differential that has emerged over recent years between the US and Europe. This has supported good margins for Yara's operations in Europe as the company's energy costs have been lower than the costs for producers using US natural gas.

At the Capital Markets Day Yara updates the future earnings scenario presented last year, and also presents an additional scenario called \\$quot;US Inland swing\\$quot;. The scenarios are not a prediction of future results, but are \\$quot;what if\\$quot; scenarios based on the forward market for energy. Both of the scenarios assume high energy prices, industry overcapacity in all years (more in the Inland swing scenario) and no significant growth. Based on those specific assumptions, the US coastal swing and US inland swing scenarios show a calculated average earnings per share of NOK 10.00-12.00 and NOK 7.00-8.00, respectively. It is underlined that these scenarios are based on the future market on 9 November 2005. In an alternative scenario based on ten-year historical average prices and currency rates, and Yara's business model and fixed costs of today, the EPS would have been approximately NOK 9.50 per year.

In line with Yara's strategy, the investments in Rossosh and Burrup earlier this year significantly increase the proportion of Yara's gas purchases in low-cost regions. By 2006, 30 per cent of Yara's natural gas-based production will be in low-cost gas locations. The letter of intent for gas supplies to a further capacity expansion in Qafco (2009/2010) emphasizes the on-going ambition to take further steps in this direction.