Yara delivers improved returns in a tight market situation, where higher prices more than offset higher feedstock costs and lower deliveries. First-quarter operating income1 was USD 1,039 million compared with USD 322 million a year earlier.
“Yara’s business model is robust and performs well even in a volatile situation. I want to give credit to our employees for their hard work to sustain our operations and deliveries amid war, supply disruption, and market price volatility”, said Svein Tore Holsether, President and Chief Executive Officer of Yara.
“Although Yara’s business is flexible and resilient, the impact of the war on global food security will be dramatic. We repeat our calls for government action to strengthen food supply chains and decrease dependency on Russia", Holsether said.
The war in Ukraine has major impacts on both the food and fertilizer industries, with Russia and Ukraine being significant in the global food value chain, representing a major portion of the world’s production and export of grains. Furthermore, Russia is one of the world’s largest producers and exporters of essential crop nutrients and natural gas. Yara has stopped all sourcing from suppliers linked to Russian sanctioned entities and persons and is utilizing its global sourcing, production, and distribution capabilities with the objective to keep supplying customers and secure continuity in food supply chains.
As a result of the high gas prices, Yara curtailed production at several of its European ammonia and urea facilities in early March, but these have resumed production as the margin situation improved. While raw material price increases in isolation are negative for Yara, higher-end product prices create offsetting positive effects, as higher grain prices improve farmers’ profitability and demand incentives for agricultural inputs.
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