OSLO--Norwegian fertilizer company Yara International ASA
(YAR.OS) said Friday its second-quarter net profit fell 33.2% on
the year, missing expectations as lower prices countered record
deliveries.
MAIN FACTS:
-The company made a net profit of 1.87 billion Norwegian kroner
($313.2 million) in the second quarter, compared with a net profit
of NOK2.8 billion in the same period a year earlier.
-The average forecast in a FactSet poll of 15 analysts was for a
net profit of NOK2.11 billion.
-The company saw record fertilizer deliveries, up 21% on the
year, with increases for all main product groups. Urea sales
increased 42% on the year on higher sales in Brazil, North America
and the Mediterranean region.
-Fertilizer prices are lower overall.
-The lower urea price, down 27% on the year on average, "clearly
demonstrates that the market tightness seen during second quarter
last year was not repeated this year," Yara said.
-Chinese urea production and exports have increased strongly in
2012 and 2013, as coal prices declined, leading to a lower urea
price.
-Second-quarter revenue totaled NOK23.12 billion, up from
NOK21.5 billion a year earlier and higher than expectations for
NOK19.91 billion.
-Earnings before interest and taxes totaled NOK2.55 billion,
compared with NOK3.32 billion a year earlier and the NOK2.48
billion analysts expected.
-"While we have seen a considerable price decline for urea,
almost 30%, our value-added product prices are broadly in line with
a year ago, as continued strong food prices motivate farmers to
optimize productivity with higher-efficiency fertilizer," said Yara
Chief Executive Officer Jorgen Ole Haslestad.
-The Lifeco plant in Libya is running at about 75% capacity due
to unstable power supply and utilities.
-The company reported a NOK627 million foreign exchange loss in
the second quarter, compared with a NOK259 million FX gain a year
ago, mainly due to a stronger U.S. dollar, up 8% versus the
Norwegian krone and up to 19% against Yara's emerging markets
currencies.
-The company said its third-quarter energy costs are expected to
be about in line with in the year-ago period, while fourth-quarter
energy costs are expected to be NOK100 million higher.
-Shares Thursday closed at NOK255.70, valuing the company at
NOK71.2 billion.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@dowjones.com
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