Yara International (YAR) Q4 2020 earnings summary

Executive summary

• FY20 revenue and other income $11.7bn; operating income $1.18bn and EBITDA $2.22bn, both higher YoY. ROIC rose to 8.0% from 6.6%.

• Net income attributable to parent shareholders was $691m vs $599m; basic EPS $2.58 vs $2.20. EBITDA excluding special items was $2.16bn, broadly in line with 2019’s $2.17bn.

• Resilient operations and cash generation supported shareholder returns of NOK 52 per share paid or proposed for 2020, alongside investments in digital farming and clean ammonia.

Financial highlights

• Revenue and other income fell to $11,728m from $12,936m; operating income increased to $1,176m from $989m.

• EBITDA rose to $2,223m from $2,095m; excluding special items, EBITDA was $2,161m vs $2,165m.

• Net income attributable to parent shareholders was $691m vs $599m; reported EPS was $2.58 vs $2.20, while adjusted EPS excluding currency and special items was $3.08 vs $3.09.

• Operating cash flow reached $2,047m vs $1,907m; net cash provided by investing activities was $248m vs $1,044m used in 2019, including $1,006m proceeds from equity-accounted investments sold.

Outlook and guidance

• 2021 outlook described stronger grain prices, increased farmer planting and crop-nutrition incentives, robust nitrogen fertilizer markets, and strengthening prices ahead of the Northern Hemisphere planting season.

• Industrial demand recovered after weakening in Q2 2020; operational focus remains on plant reliability, premium products, digital farming, and green ammonia opportunities.

• Target ROIC above 10% mid-cycle; scope 1 and 2 emissions target is a 30% reduction by 2030 vs 2019, with climate neutrality ambition for 2050.

• Planned 2021 investment is ~$1.3bn; total annual investment is capped at $1.2bn from 2022, covering maintenance and growth investment.

• New-business-model ambition: incremental EBITDA of $300m–$600m by 2025; 2025 targets also include $1.5bn revenue from new business models and $1.2bn from online sales.