Fertiliser manufacturer Yara International has reported higher profitability on lower revenues and volumes sold in the first half of 2020.
It made an operating income of $335 million on revenues of $2.82 billion in the three months ended June 30th 2020, compared to $266m and $3.4bn in the previous year. At the first half stage, operating income was $583m and $5.72bn, from the $464m and $6.45bn twelve months earlier.
Yara manufactured 5.09 million tonnes of fertiliser in the second quarter of 2020 and 10.42m tonnes in the first half (5.47m tonnes and 10.96m tonnes in Q2 and H1 2019).
Overall fertiliser sales and marketing deliveries fell 2% year-on-year, with the earlier phasing of spring deliveries in Europe this year seeing Q2 volumes drop in this region, although partly offset by higher deliveries in Brazil. Second-quarter nitrogen deliveries in Western Europe were 6% lower and imports down 3% lower. Deliveries for the whole 2019/20 season were down by 3%.
Globally, new business deliveries were 34% lower, as Covid-19 affected the company’s maritime business and industrial nitrogen demand. Ammonia production fell by 14% and finished fertiliser output by 7% mainly due to the closure of Yara’s Trinidad plant and its imminent sale of the 25% stake held in Qatari urea producer Qafco since 1969.
Looking ahead, the demand for fertiliser and food demand is resilient in times of crisis, notes the company – “ensuring continuity in food production and related value chains remains a top priority for all countries”.
Yara believes its market environment is in a positive trend, with a broadly stable global grain balance and receding urea supply pressure. At the same time, its nitrogen fertiliser markets are robust, with normal plantings and nutrient applications in the Northern hemisphere plus strong demand from Brazil ahead of the Southern hemisphere’s main growing season.
“Yara has delivered improved results, with second-quarter EBITDA excluding special items up 8%. I am pleased to see the Yara organisation continuing to perform well in a demanding environment,” comments Yara president and chief executive Svein Tore Holsether.