Yara, one of the world’s largest fertiliser manufacturers, has said that its financial results for the second quarter (Q2) of this year have been impacted by falling prices.

However, the Norwegian company has said that a recovery is likely in Q3 based on the latest price developments.

According to financial results released today (Wednesday, July 19), Q2 earnings before interest, tax, depreciation, amortisation (EBITA), excluding one-off items, was $252 million, compared with $1.4 billion a year earlier.

The company said that this 83% drop reflected lower margins with lower selling prices offset by a decline in energy costs and improved volume/mix.

“Since the fourth quarter (Q4) of 2022, fertiliser prices have been on a declining trend, pushing the industry into a low-margin environment,” Yara said.

Total product deliveries were 2% lower than a year earlier, but with an increased share of premium product deliveries.

The company’s Q2 revenue was $3.9 billon, down from almost $6.5 billion in the same period in 2022.

The documents also show that revenue for the first half of the year (H1 2023) stood at $8.1 billion, compared to $12.3 billion in the first six months of 2022.

A loss of $250 million is recorded for operating income in Q2, the corresponding figure in 2022 was $1.2 billion.

The results outline that ammonia and finished fertiliser production are currently running behind 2022 levels.


Commenting on the latest financial results, Svein Tore Holsether, president and chief executive at Yara, said:

“Second quarter results are impacted by the falling price trend we’ve seen so far in 2023 pushing the industry into a low-margin environment. However, recent price developments indicate stronger demand going forward.

“Yara’s flexible business model has proven resilient through great price volatility and a transformation of raw material sourcing.”

Yara Yara CEO Svein Tore Holsether
Yara CEO Svein Tore Holsether. Image Source: Yara

Holsether said that the European nitrogen industry saw a recovery of volumes during the second quarter and the company’s season-to-date deliveries were in line with a year ago.

Given supply overhangs from last season, he said that this indicates an increase in fertiliser application rates this season.

“For the new season, recent price developments indicate stronger demand and a tighter urea market going forward, despite substantial recent capacity additions.

“Together with healthy farmer incentives and low producer stocks in Europe, this creates a positive backdrop for nitrate markets.

“Based on the latest price developments also for phosphate and potash, margin recovery is likely in third quarter,” he said.