(April 24): Fertiliser giant Yara International ASA boosted shipments in the first quarter (1Q) as the Iran war effectively halted transit through the Strait of Hormuz, hurting global trade of crop nutrients and pushing up prices.
The Oslo-based company increased total deliveries by 2% in the January-March period from a year earlier as margins on nitrogen-based fertilisers rose.
The war in the Middle East has hit global energy and fertiliser markets, bottling up ships loaded with key raw materials for fertiliser production in the Persian Gulf area. The shortage has led to a sharp increase in global prices of the key crop inputs, allowing producers with global production capacity, such as Yara, to sell at higher prices.
The current price spike comes just four years after European fertiliser production was hit by skyrocketing natural gas prices after Russia’s invasion of Ukraine. This time, margins in the region have so far supported continued output.
“We are producing at full blast in Europe,” Chief executive officer Svein Tore Holsether said in a phone interview. “The best contribution that we can make right now is to ensure that we are producing as much as possible.”
The company’s shares rose as much as 5.6% in Oslo before paring gains.
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The only disruption for Yara has been a partial curtailment at its Indian plant because of lack of available gas, he said. There was also an outage at the company’s ammonia plant in the Pilbara region of Western Australia in mid-March, chief financial officer Magnus Krogh Ankarstrand said on a conference call. It is expected to return online in the first half of May, he said.
While the firm’s Africa and Asia operations saw earnings decline in 1Q, earnings from its units in Europe and the Americas rose by about 50% from a year earlier, according to a statement.
The fertiliser company reported adjusted earnings before interest, taxes, depreciation, and amortisation of US$896 million, an increase of 40% from a year earlier and ahead of the US$807 million estimated by analysts. Revenue rose 17% over the same period.
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Yara continues to evaluate the best ways to diversify energy exposure to mitigate increased carbon costs, including developing its ammonia projects with Air Products & Chemicals Inc, it said. It still expects a final investment decision on that by mid-2026, it said.
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