April 24 (Reuters) - Norwegian fertiliser maker Yara reported first-quarter core earnings above analyst expectations on Friday, citing higher nitrogen margins, strong deliveries and operational
Yara beats quarterly profit view on strong nitrogen margins, shares rise
Yara's Financial Performance and Market Impact
By Jesus Calero and Tristan Veyet
April 24 (Reuters) - Norwegian fertiliser maker Yara logged a bigger-than-expected rise in first-quarter core earnings on Friday, citing higher nitrogen margins, strong deliveries and operational improvements, which sent its shares 4% higher.
Market Conditions and Nitrogen Margins
The Iran war has tightened nitrogen markets by disrupting shipments through the Strait of Hormuz and shutting plants in the Middle East, lifting urea prices and improving producers' pricing power despite rising risks of demand destruction.
Impact on Farmers
"We're hearing farmer stories that they have to rethink fertiliser application. That's a natural response to the margins they are faced with," Yara CEO Svein Tore Holsether told Reuters.
Comparison with Industry Peers
Yara's results echo those of German potash and salt miner K+S, which also posted quarterly core earnings above expectations boosted by higher prices in its agricultural business.
Global Crop Prices and Farmer Margins
"Global crop prices are only marginally increasing while input costs have increased, and that's putting an additional burden on farmers, and farmers across the world did not have robust margins before this," Holsether said.
Financial Highlights
Core Earnings and Analyst Expectations
Yara's earnings before interest, taxes, depreciation and amortisation, excluding special items, grew 40% to $896 million for the first quarter, above the $825 million expected by analysts in a company-provided poll.
Shares of Yara, which had gained nearly 30% this year by Thursday's close, rose 2.4% by 0957 GMT.
Analyst Commentary
"Further developments in the Middle East/Strait of Hormuz will remain the key driver of the shares in the near term, as it dictates the development of nitrogen fertiliser prices," analysts at J.P. Morgan said in a note following the results.
Strategic Initiatives and Outlook
Cost Reductions and Future Targets
Yara said it had made a strong start towards its 2027 targets, after delivering $180 million in fixed-cost reductions in 2025 and a further $46 million in savings so far this year.
Natural Gas Costs and Production Impact
It said natural gas costs were expected to be $150 million and $120 million higher in the second and third quarters, respectively, compared with last year.
Natural gas is a key input in fertiliser production, meaning swings in gas prices can have a significant impact on costs for producers and prices paid by farmers.
Low-Carbon Ammonia Projects
Yara said it was advancing low-carbon ammonia projects with Air Products, targeting a mid-2026 investment decision on a Louisiana project that would produce 2.8 million tons of low-carbon ammonia a year.
(Reporting by Jesus Calero and Tristan Veyet; Editing by Subhranshu Sahu and Milla Nissi-Prussak)
