Yara reports significant fall in third-quarter earnings

Yara International reported on Friday that its third quarter (Q3) financial performance suffered as a result of significant price declines in the urea market.

The company, which is one of the world’s largest fertilizer producers, said that its earnings before interest, tax, depreciation, and amortization (EBITDA), excluding special items, totaled $396mn, which, compared to its earnings of just over $1bn in Q3 2022, represented a 62% year-over-year decrease.

Yara’s net income fell from $420mn in Q3 of last year to $2mn in Q3 of this year.

The fertilizer maker’s president and CEO, Svein Tore Holsether, was quoted in a press release as saying: ‘Third-quarter results are impacted by strong price declines compared to last year, as the nitrogen industry continues to operate in a lower-margin environment. Although agricultural fundamentals are supportive, nitrogen markets remain sensitive to geopolitical and commodity market volatility.

Holsether continued: ‘War, geopolitical instability, and the climate crisis are having major impacts on food security. It is therefore even more important to safeguard Europe’s strategic autonomy in food and fertilizer, and to accelerate the green transition of European agriculture and industry.’

Yara stated that lower gas prices and higher deliveries were not sufficient to counteract Q3 price declines.

The company – which during the three-month period reduced European ammonia capacity production by 6% to 80,000 tonnes, and finished fertilizer production by 3% to 130,000 tonnes – indicated that there may be further nitrogen curtailments if European demand remains slow.