By Juhana Rossi
Norwegian chemical group Yara ASA (YAR.OS) said Friday its net
profit rose 22% in the June quarter as widening margins compensated
for lower deliveries of fertilizers owing to an early end in the
growing season in Europe.
The company said that fertilizer demand remains robust, while
grain prices dropped during the second quarter due to favorable
crop prospects in several key grain-producing regions.
Yara's June quarter net profit was 2.29 billion Norwegian kroner
($370 million), compared with a net profit of NOK1.87 billion in
the year-earlier period. Revenue and other income was NOK23.31
billion, practically unchanged from NOK23.21 in the year-earlier
quarter.
The company said it received on average 9% less on the year for
its urea and 5% more for its nitrate. Prices for its NPK fertilizer
deliveries were unchanged from last year.
Yara's quarterly fertilizer deliveries rose 2% on the year,
although excluding deliveries in Brazil the global delivery volumes
fell 17%. The drop mainly stemmed from lower nitrate and NPK
deliveries in Europe where volumes fell 21% compared with the
year-ago quarter.
"Margin improvements more than offset the volume impact of an
earlier end to the season in Europe," said Yara Chief Executive
Jorgen Ole Haslestad
Margins widened as Yara's European energy costs, a key component
in making fertilizers, fell 23% in dollar terms from the second
quarter in 2013.
Yara announced Friday it will expand its NPK capacity by 250,000
metric tons at its Uusikaupunki site in Finland. In adition to the
Uusikaupunki expansion, Yara is planning to confirm a further
expansion in Porsgrunn, Norway before the end of 2014.
Yara's compound NPK products continue to deliver strong and
stable volumes and margins, the company said.
Write to Juhana Rossi at Juhana Rossi@wsj.com
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