Yara Q1 up yr-on-yr, but EBITDA, pretax below forecasts on higher costs UPDATE

Yara Q1 up yr-on-yr, but EBITDA, pretax below forecasts on higher costs UPDATE

	Published : Fri, 20 Apr 2007 08:43 By : Agencies Print this Story

(Updates with details on performance, CEO comment, outlook)

OSLO (Thomson Financial) - Yara International ASA posted first-quarter figures well ahead year-on-year, but profits at both the operating and pretax levels fell slightly below market forecasts on higher operating costs and expenses.

For the first quarter, chemical and fertiliser firm Yara posted sales of 13.49 bln nkr, up from 11.74 bln last year, and ahead of the 13.20 bln consensus forecast of analysts polled by TDN Finans.

EBITDA came in at 1.79 bln nkr, up from 1.49 bln last time, but below the 1.91 bln consensus forecast.

Pretax profits, meanwhile, came in at 1.40 bln nkr, strongly up from the 1.14 bln posted at the same stage last year, but slightly below the 1.45 bln figure expected by analysts.

Operating costs and expenses during the quarter came in at 12.43 bln nkr, up from 10.98 bln last time.

Yara said the strong year-on-year performance was due to higher volumes as the European fertiliser market recovered, global fertiliser prices strengthened and energy costs were eased.

Thorleif Enger, president and chief executive of Yara, said much most of the 18 pct increase in year-on-year volumes came from Europe, which picked up from a slow first half of the season, and from Brazil, following the recovery of the Brazilian agro-industry and the firm's recent Fertibras acquisition.

'Fertiliser margins improved as prices increased and gas costs declined,' he said. 'Increased fertiliser prices reflect a tight market with increased imports into major markets.'

Yara's downstream segment, he said, had benefited from increased sales in Europe, Latin America and south-east Asia, while its industrial segment saw solid sales growth, particularly for technical ammonium nitrate and environmental products.

Upstream, Yara said its business had benefited from a strong increase in global urea prices and 10 pct higher ammonia production due to high capacity utilisation in Europe, and the firm's new ammonia plant in Burrup, Australia.

Looking ahead, Yara said higher grain prices will 'substantially improve farm profitability in 2007, and support fertiliser demand'.

Energy costs, which have in recent years been a major strain on Yara's quarterly figures, are expected to keep coming down, with the firm's European gas costs for the next 6 months estimated to be 250 mln nkr below last year.

Separately, Yara today announced it was increasing its focus on the strategically-important Indian market, with the formation of a 50:50 joint-venture with Kribhco of India, the largest agricultural co-operative in India.

While no financial details were given about the planned partnership, Yara said the joint venture's objective is to establish an Indian production base by acquiring existing production and import facilities.

alastair.reed@thomson.com

ar/lam

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