Yara Sees Strong Q3 2024 Profits Despite Lower Deliveries
Yara International ASA has released its Q3 2024 report, presenting a positive financial performance despite facing regional challenges and market volatility. The global leader in crop nutrition recorded a 47% rise in earnings before interest, tax, depreciation, and amortization (EBITDA), excluding special items, compared to the same quarter in 2023.
In the latest financial disclosure, Yara announced an EBITDA of 585 million USD, underscoring improved profit margins driven by higher phosphate-rock upgrade margins, stable potash prices, and robust product sales in Brazil. However, overall product deliveries fell by 3% compared to Q3 2023, reflecting lower demand across several regions.
Robust Margins in Americas Drive Earnings
The Americas market showcased notable resilience, with Yara reporting a 10% rise in regional EBITDA, which stood at 188 million USD. Higher commercial margins and favorable currency impacts counterbalanced reduced product deliveries and increased fixed costs. However, plant maintenance activities, such as those at Yara’s Belle Plaine facility in Canada, led to temporary disruptions in deliveries.
European Market Impacted by Rising Costs
Despite efforts to stabilize operations, Yara’s performance in Europe was affected by rising gas and ammonia costs, which squeezed margins. EBITDA for the region reached 82 million USD, down 12% from Q3 2023, largely due to lower product pre-buying activity in southern Europe. Additionally, total deliveries dropped 8%, reflecting demand uncertainties.
Growth in Clean Ammonia Production
One of the standout aspects of the report was the surge in clean ammonia production, with the segment generating 25 million USD in EBITDA, a remarkable increase from 7 million USD in Q3 2023. The boost resulted from improved operational efficiencies and higher product availability from Yara’s plants in the US and Australia. Clean ammonia deliveries soared by 56%, positioning Yara favorably in the growing global market for sustainable fertilizers.
Global Focus on Operational Excellence
Yara’s Global Plants & Operational Excellence segment recorded an EBITDA of 108 million USD, significantly outperforming the 49 million USD reported for Q3 2023. Increased production volume and enhanced operational performance contributed to this improvement, aligning with the company’s strategy to optimize processes and reduce costs.
Lower Deliveries in Africa and Asia Despite Margin Gains
While Yara achieved better margins in Asia and the Pacific region, overall deliveries in Africa and Asia declined by 6%. This decline was linked to the company’s focus on maximizing profit margins over volume, coupled with market timing challenges. Nevertheless, the segment recorded 88 million USD in EBITDA, reflecting a 66% year-on-year increase.
Financial and Strategic Outlook
The report reflects Yara’s intention to enhance profitability through cost reductions and strategic portfolio optimization. The company is on track with a cost and capital expenditure reduction program, targeting a 150 million USD cut by the end of 2025.
In a forward-looking statement, Yara highlighted the need for tighter control over core operations and a sharpened focus on high-return assets. The company expects global urea supply to remain limited, which, combined with steady nitrogen demand, may support stronger margins in upcoming quarters.
Given its current financial position, Yara plans to allocate increased cash flow toward growth investments and higher shareholder returns, with a goal to achieve project returns above 10%.
Conclusion
Yara’s Q3 2024 results underline the company’s resilience in navigating market uncertainties while strengthening its position in clean ammonia production and crop nutrition solutions. With strong profit growth and operational excellence, Yara is well-positioned to meet future challenges and capitalize on global trends in agriculture and sustainability.
