By Kjetil Malkenes Hovland
OSLO--Norwegian fertilizer producer Yara International ASA
(YAR.OS) Wednesday reported a sharp fall in fourth-quarter net
profit as an oversupplied urea market led to such high-cost
producers as China and Ukraine to curtail production.
Yara's net profit was 59 million Norwegian kroner ($9.6 million)
in the fourth quarter, compared with a net profit of NOK2.17
billion in the same period a year earlier. The average forecast in
a FactSet poll of 12 analysts was for a net profit of NOK945
million.
The company said it received on average 26% less on the year for
its urea, 15% less for its nitrate and 9% less for its NPK
fertilizer deliveries.
Yara's global fertilizer deliveries rose 22% on the year, mainly
due to increased sales in Brazil amid added volumes from the
acquisition of Brazilian agricultural company Bunge.
"Yara's fourth-quarter results reflect weaker commodity
fertilizer markets," said Yara Chief Executive Jorgen Ole
Haslestad.
Yara said its board would propose a dividend of NOK10 per share
for 2013, or 48% of net income after non-controlling interests,
which is higher than the company's own dividend target of 30% of
net income. The board also intended to propose a new share buyback
program along the lines of the existing one.
Yara's fourth-quarter revenue totaled NOK20.47 billion, from
NOK20.86 billion a year earlier and lower than the expected
NOK21.77 billion.
Earnings before interest and taxes totaled NOK544 million,
compared with NOK2.15 billion a year earlier and the NOK1.26
billion analysts expected.
The company expected first-quarter energy costs in line with the
year-earlier period, and second-quarter energy costs NOK400 million
lower on the year.
At 0806 GMT, Yara shares traded 3.5% lower at NOK258.70.
-Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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