(Reuters) -Yara, one of the world's largest producers of fertilisers, on Friday reported quarterly earnings which were below market expectations and warned gas costs would rise in the remainder of the
Yara's Quarterly Earnings Fall Short, Gas Prices Expected to Rise
(Reuters) -Yara, one of the world's largest producers of fertilisers, on Friday reported quarterly earnings which were below market expectations and warned gas costs would rise in the remainder of the year.
The company also said it planned to invest in ammonia projects in the United States as part of a push to improve shareholder returns.
Yara reported adjusted earnings before interest, taxes, depreciation and amortization of $652 billion for the April-June period, below analysts' expectations of $668 billion, according to a company-provided consensus.
The company expects gas costs for the third and fourth quarter to be $60 million higher and $10 million higher respectively from a year earlier. It plans to offset that with an ongoing cost cutting programme.
"With the combination of cost reduction, portfolio optimization and a tightening nitrogen markets, Yara's financial position is set to strengthen with increased free cash flow and sustained profitability," CEO Svein Tore Holsether said in a statement.
Gas prices make up a chunk of fertilizer firms' raw material costs, as a vast amount of natural gas is needed to produce fertilizers.
The Norwegian group embarked in 2024 on a $300 million cost and capex-cutting plan, which it said was so far ahead of schedule.
The company expects annual savings of $180 million excluding inflation.
"We are ahead of plan in our cost and (capital expenditure) reduction program," Holsether said.
(Reporting by Tristan Veyet in Gdansk, editing by Milla Nissi-Prussak and Matt Scuffham)
