December 6, 2012
Yara presents its financial position, market prospects
Press release
Yara International met with investors and analysts to present market prospects, differentiated position and growth opportunities, and financial scenarios at Yara''s Capital Markets Day.
"For 2011-12 Yara delivered its highest seasonal EBITDA so far, reflecting the strength of its globally integrated business model even with a disappointing European season. Stronger urea prices have contributed to recent earnings growth, but European gas prices have almost doubled in the last three years, limiting the earnings growth in Yara''s European commodity (ammonia and urea) plants.
However, Yara''s upgrading and distribution activities have at the same time seen a strong positive earnings trend. Illustrating the different drivers and sensitivities of Yara''s value-added and commodity businesses is the focus area for today''s presentation", says President and CEO J？？rgen Ole Haslestad.
Yarapresents new scenarios for future earnings at the Capital Markets Day. The scenarios are not a prediction of future results, but are "what if" examples based on selected fertiliser and energy price scenarios and Yara''s current business.
A supply-driven market where China is the highest-cost exporter translates into an estimated Earnings Per Share (EPS) of NOK20 (US$3.6) based on assumed domestic costs and zero margins, and an EPS of NOK35 (US$6.2) based on the average domestic price level in China during the 2012 low export tax period. A demand-driven scenario with US$150 per tonne urea margins yields an estimated EPS of NOK57 (US$10).
"Yara''s balance sheet has never been stronger, reflecting strong earnings from our globally integrated business model, and a deliberate effort to build financial flexibility for growth execution. Yara intends to use its financial flexibility both to realise well-timed profitable growth, and to return cash to shareholders in line with its policy", says President and CEO J？？rgen Ole Haslestad.