Yara International (YAR) Q3 2024 earnings summary

Executive summary

• EBITDA excluding special items rose to $585M in Q3 2024, up 47% year-over-year, driven by improved margins, record production, and lower fixed costs, despite a 3% decline in total deliveries.

• Net income reached $286M versus $2M in Q3 2023, with basic EPS at $1.12 compared to $0.00 a year ago.

• Management shelved the full conversion of the Porsgrunn green hydrogen project due to insufficient incentives and infrastructure, while ramping up the Herøya pilot plant.

• Returns are improving but remain below target; ongoing cost and portfolio optimization efforts continue.

• The Sluiskil CCS project in the Netherlands is progressing on time and on budget.

Financial highlights

• Revenue for Q3 2024 was $3,654M, down 6% year-over-year; operating income increased to $309M from $125M.

• EBITDA excluding special items was $585M, up from $396M; reported EBITDA was $604M.

• EPS excluding currency and special items rose to $0.73 from $0.19 year-over-year.

• ROIC (annualized) improved to 8.9% in Q3 2024 from 3.6% in Q3 2023.

• Net interest-bearing debt remained stable at $3,604M at quarter-end.

Outlook and guidance

• Q4 is expected to continue the trend of higher production than sales due to seasonal effects, with deliveries typically lower in December.

• Capex spend remains in line with year-end guidance of $1.2B, with a target to reduce to $1.0B in 2024/25.

• Second wave of targeted cost reduction measures to begin execution in 1Q25.

• Final investment decision on US ammonia projects targeted for H2 2025.

• Nitrogen market fundamentals are supportive, with tightening supply-demand expected in coming years.