Yara International, a leading producer of fertilizers, reports a 333 million Norwegian Krone ($40.06 million) net loss in the fourth quarter of 2016 compared with a net income of NK434 million in the year-earlier quarter. EBITDA, excluding special items, was down 29.5% to NK2.47 billion on 13.2% lower revenue of NK22.33 billion. The company cites lower fertilizer prices.
"Yara reports a weaker result than a year earlier, reflecting lower fertilizer prices as the global nitrogen price floor was tested during the quarter. But our operational performance improved significantly, with fertilizer sales and production up 15% and 11% respectively," says Svein Tore Holsether, president and CEO of Yara. Yara’s fertilizer production in the fourth quarter reached 6.93 million metric tons (MMt) and sales were 9.14 MMt.
"The whole Yara organization is working hard to further improve operations, to deliver on the Yara improvement program which we have announced earlier. The program has already delivered approximately $25 million of EBITDA improvement in 2016, and will deliver at least $500 million of annual EBITDA improvement within 2020," Holsether says.
Yara's margins were significantly lower compared with a year earlier for both commodity and nitrate premiums. Yara's average realized urea and nitrate prices decreased 25% and 28% respectively, while realized NPK prices decreased by around 10%. Yara's average global gas costs were 17% lower than a year ago.
In Europe, higher nitrogen prices have contributed to a positive price and volume momentum for nitrates, and Yara first-quarter European nitrate deliveries are ahead of the same period last year, the company says.