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Yara reports strong results and strategic growth
Oslo (2006-10-20): Yara International ASA reports strong financial results for third quarter 2006. However, increased energy costs were only partly offset by improved market position and higher prices. During the quarter Yara established a platform for growth in the world's largest nitrogen fertilizer and chemicals market via a strategic partnership agreement with China BlueChemical.


Yara reports third-quarter net income after minority interest of NOK 1,403 million (NOK 4.68 per share), compared with NOK 846 million (NOK 2.70 per share) in the third quarter last year. Third-quarter operating income was NOK 1,149 million compared with NOK 783 million in the same quarter last year. EBITDA for the quarter was NOK 1,947 million compared with NOK 1,505 million in the third quarter last year.

"During the third quarter Yara delivered a strong financial performance and improved its market position in Europe and Brazil. Yara's underlying result, excluding a gain from the sale of its ammonia shipping fleet, is down from last year. This is due to increased energy costs, which are now declining from a second-quarter peak. A tight grain supply-demand balance and increasing grain prices represent good fundamentals for the upcoming fertilizer season," says Thorleif Enger, President and CEO of Yara International ASA.

The Downstream segment's fertilizer sales volumes increased 4 percent on last year, with the acquisition of Fertibras in Brazil generating most of the growth. Downstream's market position in Europe continued to strengthen, with sales in line with last year, while total market deliveries are down 5 percent in Western Europe. Industrial product sales continued to grow in the third quarter. The higher volumes, together with better margins on nitrogen chemicals, significantly improved the Industrial segment's results. Finished fertilizer production was 2 percent down compared with last year due to reduced production in Europe. The Upstream segment's results were positively impacted by the sale of the ammonia shipping fleet, with a net gain of NOK 832 million.

Following the recent decline in oil prices and increased proportion of Yara's natural gas sourced form low-cost regions, Yara's gas costs for the next half-year are expected to decline.

Going forward, reduced grain stocks and increased grain prices improve the prospects of a rebound in nitrogen fertilizer consumption this season. The positive indicators for global demand development reduce the risk of over-supply from new capacity coming on-stream next year.

For further information
The entire quarterly report and the presentation material used during the press and analyst conference are available on
http://www.yara.com/en/investor_relations/financial_reports