Yara International has reported lower earnings and revenues from the last quarter of 2015, in line with deflating fertiliser values.
The company made a fourth-quarter net income after non-controlling interests of NOK434 million on revenues of NOK25.72 billion in the three months ended December 31st 2015, compared to NOK1.86bn and NOK26.23bn in Q4 2014. It says positive currency and energy gains were more than offset by lower sales volumes and declining prices in the quarter.
Yara’s global fertilizer deliveries fell by 7% year-on-year. Like-for-like volumes excluding the Galvani acquisition in Brazil were 9% down, driven by lower urea and nitrate product sales. In Europe, total fertilizer deliveries were 8% lower - while compound NPK sales rose by 7%, nitrate and urea sales fell by more than 10% in the period.
The decrease in deliveries reflects negative price trends in the quarter for all nutrient commodity prices, as well as weaker farm economics in key producing regions, it notes. Yara's average realized urea prices decreased by some 20%, nitrates by 15% and NPK compounds by an average 13% compared to Q4 2014. At the same time, Yara's average global gas costs were 20% lower.
"Yara reports weaker results than a year ago, reflecting a tougher market environment with declining prices, but also an unsatisfactory operational performance with significant downtime in several of our plants," says president and chief executive Svein Tore Holsether.
“The global farm margin outlook and incentives for fertilizer application remains supportive overall, especially for key crop exporting regions such as Europe and Latin America where local currencies have depreciated relative to the US dollar. In Europe, season-to-date nitrogen industry deliveries are 5% behind a year earlier, and Yara expects a catch-up in deliveries during first half of 2016.”