Yara International (OTC:YARIY) ASA's third-quarter earnings call revealed a significant decrease in EBITDA, down 62% compared to the same period last year due to reduced margins in a challenging operating environment. CEO Svein Tore Holsether and CFO Thor Giaever led the presentation, outlining the company's performance and future outlook amidst market volatility.
Key takeaways from the call include:
- Yara's TRI rate, a measure of safety performance, remains at a low and industry-leading level, demonstrating effective safety practices.
- Operating cash flow stands at $1 billion, mainly due to a significant release of operating capital.
- Realized nitrate prices for the quarter reflect that most of the volumes delivered were contracted at lower prices, approximately two months ahead of spot market prices.
- Underlying EBITDA for the quarter is down 60%, as lower gas prices and higher deliveries were more than offset by a strong price decline from Q3 of last year.
- Yara's net debt ended approximately $600 million lower at the end of the quarter, mainly driven by an $800 million operating capital release.
CEO Svein Tore Holsether acknowledged the challenging operating environment, noting that despite operational challenges at the low end of the cycle, agricultural fundamentals going forward are supportive. However, he pointed out that the phasing of deliveries for the remainder of the season is uncertain and sensitive to the volatility of market prices.
CFO Thor Giaever highlighted the sequential improvement in margins and results compared with the second quarter, despite earnings being below last year's level due to lower margins. He also noted a strong operating cash flow in Q3, with a substantial release of operating capital more than offsetting weaker operating income.
Despite the challenges, Holsether expressed confidence in the company's positioning for the future, emphasizing its commitment to tackling the food crisis and climate change while enabling the energy transition. He concluded by stating that Yara will continue to prioritize value creation through its three pillars of climate neutrality, regenerative agriculture, and prosperity, while also delivering strong shareholder returns.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.