Published by Global Banking and Finance Review
Posted on February 7, 2025
By Tristan Veyet
(Reuters) -Yara International, one of the world's largest fertilizer producers, on Friday flagged a sharp hit from the strong U.S. dollar on its fourth quarter net result, while its core earnings landed close to market expectations.
"In general, a stronger U.S. dollar is good for our business," CEO Svein Tore Holsether told Reuters. "But then the income side of that takes longer time, but you get the immediate impact on the balance sheet when this happens."
The Norwegian company reported a quarterly net loss of $290 million, which it said was mainly driven by a net foreign currency exchange loss of $260 million due to non-cash one-offs.
Yara's shares were trading 6.7% lower by 0955 GMT, the biggest fallers on Europe's benchmark STOXX 600 index.
Quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA), excluding one-off items affecting comparability, fell 9.9% to $519 million. Analysts on average were expecting $523 million, a company-provided poll showed.
The adjusted core profit was impacted by lower nitrogen upgrading margins in the quarter, the company said.
Holsether said Yara had observed a significant increase in global urea prices so far in 2025, with the most recent figure standing at around $455 per metric ton. That means higher selling prices for Yara's urea fertilizers.
The company expects to pay around $310 million more for natural gas in the first half of 2025 than a year earlier, below Jefferies analysts' estimate of $460 million.
Gas prices make up a chunk of fertilizer firms' raw material costs, as a vast amount of natural gas is needed to produce fertilizers.
"We're also progressing well on our cost and capex reduction program, with a USD 90 million reduction achieved in 2024," Holsether added in a statement.
The group initiated a $150 million cost reduction and $150 million capital expenditure reduction programme in July to improve its financial performance and shareholder returns.
($1 = 11.2075 Norwegian crowns)
(Reporting by Tristan Veyet in Gdansk, editing by Milla Nissi)
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