Norwegian fertiliser manufacturer Yara has reported improved returns with higher prices and a strong performance from overseas assets in the second quarter (Q2) of the financial year.

In its most recent set of results, published today (Tuesday, July 19), the company said the performance on prices and assets “more than offset” higher European feedstock cots and lower deliveries.

Yara’s Q2 operating income was $1.22 billion, compared to $477 million a year earlier.

Svein Tore Holsether, president and chief executive officer of Yara, commented: “[Our] business model remains resilient, and I would like to thank the whole Yara organisation for another strong effort in a volatile market.

“However, there is a clear risk of nitrogen shortages and further price spikes if the gas situation in Europe deteriorates further,” Holsether added.

Q2 earning before interest, taxes, depreciation and amortisation (EBITDA) was $1.48 billion, compared with $775 million in the same period last year.

Net income attributable to shareholders was $664 million ($2.61 per share), compared with $539 million ($2.10 per share) in Q2 of 2021.

The company says that continuity in food production and related value chains remains a top priority globally.

However, seasonally lower northern hemisphere demand combined with the recent European gas price surge is leading to significant “curtailments” in Europe, including for Yara, the company says.

Yara has currently curtailed several of its production plants, currently to an annual capacity of 1.3 million tonnes of ammonia and 1.7 million tonnes of finished fertiliser.

The business has also published its first ‘Green Financing Framework’ today, which it says “underlines its commitment to sustainability as an integral part of its strategy”.

“Eligible green projects are expected to create environmental benefits by decarbonising the food chain, including fertiliser production and application, and by limiting the need the expand farmland,” the company explained.

A statement from the business added: “Yara’s resilient business model continues to generate robust returns, leading to strong dividend capacity going forward in line with Yara’s capital allocation policy.”

The company paid dividends of $796 million in Q2. The board of Yara will consider further cash returns in connection with quarter three (Q3) results.