Yara Q2 net income drops to Nkr1.12m on weak margins, demand

16 July 2009 09:28  [Source: ICIS news]

LONDON (ICIS news)--Yara’s net income dropped to Norwegian kroner (Nkr) 1.12m ($175,824, €124,444) in the second quarter compared with Nkr4.35m in the same period last year, reflecting lower volumes and margins and further inventory write-downs due to lower prices, the Norwegian fertilizer major said on Thursday.

Revenues fell 33% to Nkr16.12m from Nkr24.04m in the second quarter of 2008, Yara said.

The company reported an operating loss for the period of Nkr85, down from an income of Nkr4.66m during the same three months last year.

Second-quarter fertilizer deliveries were down 13% from 2008, but up 7% on the first quarter of this year, Yara said.

The company said fertilizer volumes in stock were reduced by 30% through the quarter as sales picked up and production was curtailed, while margins declined due to lower prices and further inventory write-downs, primarily related to potash and phosphate, only partly offset by lower energy costs.

Jorgen Ole Haslestad, Yara's president and CEO, said that sales volumes, including third-party sourced products, were below last year, but sales of Yara-sourced products were up 4%.

“The new season nitrate prices kick-started deliveries in Europe where June volumes came in 25% above last year, he added.

“Global fertilizer consumption is estimated to have declined more than 5% the last season. This will have a negative effect on grain production in a situation where global grain inventories remain at low levels, and will support future demand for fertilizer, said Haslestad.

($1=Nkr6.37/€1=Nkr9.0)

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By: Hilde Ovrebekk
+44 20 8652 3214



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