Norwegian chemical company Yara International Asa (OSE: YAR) reported first quarter 2012 accounts on Friday. The fertilizer maker posted revenue of 21.3 billion Norwegian kroner, up by 7.5% year-on-year. The profit number (EBITDA of 4.3 and operating Income of 3.1 billion) were close to Q1 2011 levels. EPS stayed above 10 NOK for a third quarter in a row.
Food prices have kept quite firm and this has helped fertilizer demand. Spring demand from the United States drove urea price up. Urea prices have climbed close to 450 USD per tonne. Chinese urea exports are minimal due to prohibitive export law making deliveries from there expensive. Domestic prices are staying firm there as well.
Yara had been saying it is seeing improvement in European nitrogen demand during Q1 but that it might still be lower vs. last year. This turned out to be the case, with a 5% decline in Western European nitrogen fertilizer deliveries Dry and cold spring up until now has been having an effect. The situation appears to be picking up from March onward. Nitrogen deliveries to industry in March were very strong.
Overall current prospect appear satisfactory. President & CEO Jørgen Ole Haslestad said continued firm food prices are required to avoid a decline in global grain inventories. Yara Pilbara situation seems to be under control and. The share responded with a 3.5% gain on Friday.
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