May 3, 2012
Yara sees rise in fertiliser demand
Yara, a major nitrate fertiliser maker worldwide, posted Q1 core results just shy of speculations and stated that European cargoes had picked up in the recent months following a slower start to the season.
"As expected, northern hemisphere fertiliser demand is strengthening following a slow first half of the buying season," the Norwegian firm''s chief executive, Joergen Haslestad, said.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to NOK3.94 billion (US$687.1 million) from NOK4.26 billion (US$741 million) a year earlier and behind analysts'' mean forecast for NOK4.03 billion (US$701 million).
The euro zone crisis and falling food prices depressed demand from farmers in the second half of last year and fertiliser prices plummeted as a result, but have since bounced back, supporting Yara''s margins. Revenue rose 8% to NOK21.3 billion (US$3.7 billion), above analysts'' expectations for NOK20.6 billion (US$3.58 billion).
Yara said fertiliser deliveries in Western Europe in January-March - the months when farmers in the northern hemisphere normally stock up on nutrients ahead of the spring application -fell 5% from a year earlier.
"Substantial winter crop damage and a late spring with continued dry conditions have negatively affected European demand for fertiliser in the first quarter," it said.
It said full-season deliveries were likely to fall short of the previous season, as cold and dry spring planting conditions are likely to impact overall consumption.
"However, Yara saw record European deliveries in March and satisfactory deliveries so far in April," it added. In the US, nitrogen deliveries were down an estimated 10% in the quarter, it added.