Dow Jones
Norwegian chemical company Yara International ASA (YAR.OS)
Tuesday reported a marked increase in sales for the second quarter
of 2011, but said its net profit fell 40% on the year, mainly as a
result of higher energy prices; the published results came in below
analysts estimates.
MAIN FACTS:
- Yara International, which specializes in nitrogen-based
mineral fertilizers and industrial products, said its
second-quarter net profit after non-controlling interests fell to
NOK2.23 billion, from NOK3.72 billion a year earlier. An average of
11 analysts polled by Dow Jones/Factset had estimated the net
profit at NOK2.47 billion.
- Second-quarter earnings before interest and tax, or EBIT, rose
to NOK2.22 billion, from NOK1.89 billion.
- Yara's second-quarter sales rose xx% to NOK18.63 billion, from
NOK15.68 billion in the year-earlier quarter, but also fell short
of the analysts' estimate. Analysts had pegged sales at NOK19.39
billion.
- "As expected, drought in Europe held back deliveries in April
and May. However, short term weather-related setbacks increase the
need for fertilizer going forward. The global grain supply-demand
balance is expected to tighten further, and there is a need to
continue increasing agricultural productivity," said Yara Chief
Executive Jørgen Ole Haslestad.
- Yara fertilizer deliveries were up 4% on the year-earlier
second quarter, with stronger urea sales in particular. Margins
improved for all main product groups, with the strongest increase
for NPK and nitrates, Yara said.
- Industrial volumes increased 12%, primarily reflecting growth
in environmental products globally and N-chemical sales in Europe.
Yara's plants produced around 600 kilotons less in the second
quarter compared with full run rate, mainly reflecting a higher
than normal concentration of plant turnarounds, in addition to the
Lifeco outage.
- Yara said that going forward, a tightening grain supply-demand
balance points to continued strength in crop prices and a strong
need to increase agricultural productivity.
- Yara's third-quarter ammonia production rates are expected to
be in line with second quarter due to production outages in units
Lifeco, Hull, Burrup and Billingham, while finished fertilizer is
expected to run at full capacity excluding Lifeco.
- The new nitrate season in Europe is progressing well and
nitrate stocks are low, Yara said.
-By Flemming Emil Hansen, Dow Jones Newswires; +45 33 12 44 88; flemming.hansen@dowjones.com