Q2 2024 Yara International ASA Earnings Call Transcript
Key Points
- Yara International ASA (YARIY) reported a strong EBITDA of $513 million for the second quarter, reflecting improved margins in a stable price environment.
- The company successfully increased deliveries by 3%, driven by higher demand in Europe and lower curtailments compared to the previous year.
- Yara International ASA (YARIY) is initiating a cost and CapEx reduction program, targeting a $150 million reduction in fixed costs and CapEx by the end of 2025, which is expected to improve financial performance.
- The company has a strong strategic position in the ammonia market, with the largest ammonia system globally, providing flexibility and resilience.
- Yara International ASA (YARIY) is well-positioned to benefit from tightening nitrogen markets, which are expected to support margins and drive value-accretive growth.
- Return on invested capital for the quarter was 6.1%, below the company's mid-cycle target of 10%, indicating a need for improved returns.
- The company faced a $126 million currency loss, primarily due to euro-denominated internal funding positions, impacting earnings per share.
- Flooding in Brazil negatively impacted the Americas segment, resulting in a volume impact of approximately 140,000 tonnes.
- The effective tax rate for the quarter was high at 92%, mainly due to unrecognized tax losses in Brazil.
- Despite improved earnings, the return on invested capital remains below satisfactory levels, prompting the need for cost and CapEx reductions.
Welcome to Yara's second-quarter results presentation. The presentation today will be held by our CEO, Svein Tore Holsether; and-our CFO, Thor Giaever. There will be a conference call at 1:00 PM Oslo time where you can dial in and ask questions. You can find dial-in details on our webpage on our investors. And with that, it's my pleasure to hand over to our CEO, Svein Tore Holsether.
Thank you very much, Maria, and good morning, good afternoon, and good evening, and thank you for joining our second-quarter results presentation. As always, we start by looking at our safety performance. And I'm pleased to see our TRI rate at 1.0 at the end of this quarter. In the second quarter, we've had nine accidents. And fortunately, these have all been with low or moderate severity.
I would like to take some time to mention the flooding in Brazil. Yara has more than 2,000 employees living
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