18 April 2008 10:29 [Source: ICIS news]
LONDON (ICIS news)--Fertilizer producer Yara nearly tripled first-quarter operating income to Norwegian kroner (NKr) 2.9bn ($580m/€366m) from Nkr1.1bn in the same period of 2007 on improved margins and the purchase of Kemira GrowHow, it said on Friday.
“Our results increased strongly in the first quarter, driven by substantial margin expansion for [ammonium] nitrate and NPK [nitrogen, phosphorous and potassium-blended] fertilizer,” Yara CEO and president Thorleif Enger in a statement.
Total sales increased 21% to NKr7.3bn year on year although the 2007 first-quarter figures do not include Kemira GrowHow’s sales, the Norwegian company added.
“Excluding the effect of Kemira GrowHow, sales growth was 9%,” it said, adding NPK prices increased 70% over the period.
“The global fertilizer market has remained tight during the last year, with global production running close to full capacity,” Enger said.
“The market has been balanced by a combination of higher prices reducing demand and increased Chinese exports attracted by high prices.”
The operating income includes restructuring costs of NKr40m for the integration of Kemira GrowHow, the report said.
The company’s outlook for the rest of 2008 remains positive although energy costs continue to increase.
“Global food markets remain tight, with grain prices at historical high levels, continuing to encourage farmers to expand acreage and increase fertilizer application rates, even at higher fertilizer prices,” the company added.
“The prospects for the fertilizer market look healthy as start-ups of new production capacity are currently running at lower rates than demand growth,” it concluded.
Yara’s share price was up 12% on Thursday’s close to NKr390.50 during early morning trading in Oslo.
($1 = Nkr4.98/€1 = Nkr7.92)
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