Yara International (YAR) Q4 2023 earnings summary

Executive summary

• Q4 EBITDA was $586M; EBITDA excluding special items was $576M, down 46% YoY as lower selling prices outweighed lower energy costs; ammonia and NPK margins improved sequentially.

• Q4 crop nutrition deliveries rose 4% YoY; FY EBITDA excluding special items was $1.712B, down 65%, and free cash flow was $1.091B.

Financial highlights

• FY revenue was $15.547B vs $24.051B; operating income was $312M vs $3.827B, net income $54M vs $2.782B, and basic EPS $0.19 vs $10.90.

• Q4 revenue was $3.582B vs $5.464B; operating income was $260M vs $777M, net income $246M vs $766M, and basic EPS $0.96 vs $3.02.

• Adjusted EPS excluding FX gains/losses and special items was $0.88 in Q4 vs $2.46, and $1.11 for FY 2023 vs $10.98.

• FY cash from operations was $2.288B vs $2.391B; Q4 operating cash flow was $93M vs $1.012B.

Outlook and guidance

• Increased buying and rising prices point to potential fertilizer volume catch-up in H1 2024; nitrogen supply in Europe and the US was below normal-season levels.

• Improved affordability and ~6% higher optimal application rates support potential H1 volume catch-up; season-to-date European deliveries remained below historical averages.

• 2024 capex guidance is $1.3B, including ~$900M maintenance and ~$150M for decarbonization and premium-product growth; no 2023 underspend carries over.

• 2024 fixed costs are projected at ~$2.65B; core-business costs are planned at par with inflation, with reductions planned in portfolio units.

• Forward gas markets indicated costs $320M lower YoY in Q1 2024 and $100M lower in Q2, assuming stable purchase volumes; estimates depend on spot prices and local terms.