Yara has announced its second-quarter EBITDA, excluding special items, of USD 513 million, up from USD 252 million in the same period in 2023. The company reported a net income of USD 3 million, a significant improvement from the net loss of USD 298 million the previous year. To further enhance financial performance and shareholder returns, Yara is launching a cost and capex reduction program.
Second-quarter 2024 highlights:
- EBITDA excluding special items: USD 513 million, reflecting improved margins.
- Strong cash conversion: USD 500 million operating capital release.
- Cost reduction initiative: USD 150 million in cost reductions and USD 150 million in capex reductions initiated.
- Financial outlook: Set to improve with cost reductions and tightening nitrogen supply.
“I’m pleased to see improved results, with higher margins and deliveries in a more stable price environment. However, returns are not at satisfactory levels. We have been through turbulent, volatile years which Yara has navigated well, but we now need to adjust our priorities and cost base, to improve Yara’s profitability,” said Svein Tore Holsether, President and Chief Executive Officer.
The cost and capex reduction program aims to cut fixed costs by USD 150 million and capex by another USD 150 million by the end of 2025. This will be achieved through a targeted approach, prioritizing high-return core business and scaling down less profitable activities. By optimizing costs and strengthening the balance sheet, Yara aims to improve financial performance, enabling the funding of value-accretive growth and increased shareholder returns.
“Yara has unique competitive edges as an integrated nitrogen producer with a global asset footprint and downstream presence. This gives us scale, flexibility, and optionality in how we optimize our business, including our ammonia production and trade, and it positions Yara well for profitable decarbonization. With a sharpened strategic focus and growing demand for low-carbon crop solutions, Yara is set to increase value creation and shareholder returns going forward,” said Holsether.
