Investing.com -- Shares of Yara International (OL:YAR) rose following the company's results, which beat estimates driven by improvements in phosphate rock upgrading margins and stable potash prices year-over-year.
At 5:14 am (0914 GMT), Yara International was trading 4.5% higher at NOK 343.
Yara reported an EBITDA of $585 million for the third quarter, surpassing consensus expectations of $482 million, represents a 21% increase.
Total sales for the group reached $3.654 billion, slightly below consensus projections of $3.756 billion.
The EBITDA margin saw a notable increase of 580 basis points year-over-year, reflecting the benefits of improved product sales margins in Brazil, even as nitrogen prices remained under pressure.
“The drivers of the beat today are to a large extent non-recurring in nature and should, hence, not be extrapolated. While gas prices have increased, so have urea price recently,” said analysts at Citi Research in a note.
Breaking down regional performance, sales in Europe totaled $1.017 billion, generating an EBITDA of $82 million.
The region experienced an 8% decline in deliveries due to limited pre-buying activity in Southern Europe, alongside higher gas and ammonia costs that pressured margins.
In the Americas, sales reached $1.409 billion with EBITDA of $208 million, bolstered by improved commercial margins and a favorable currency impact, despite a 7% decline in deliveries attributed to reduced third-party product deliveries and maintenance activities at Canadian plants.
In Africa and Asia, sales amounted to $718 million, resulting in EBITDA of $88 million, buoyed by a significant increase in Asian margins and a recovery from previous outages.
Deliveries in this region fell by 6% as the company prioritized margin over volume. Global plants and operational sales were reported at $727 million, with an EBITDA of $108 million, marking a recovery from prior losses due to higher production volumes and enhanced operational efficiency.
The clean ammonia segment generated sales of $454 million, leading to an EBITDA of $25 million, driven by a 56% increase in deliveries, attributed to improved product availability.
Lastly, industrial solutions sales reached $628 million with EBITDA of $89 million, showing a slight increase in deliveries and improved production efficiency.
On the financial front, Yara's operating cash flow for the third quarter was $311 million, much lower than the $1.014 billion reported in the same quarter last year, which benefited from a substantial working capital release.
The company's net interest-bearing debt stood at $3.6 billion, reflecting a leverage ratio of about 1.7 times net debt to EBITDA.
While Yara anticipates continued pressures on nitrogen-related performance, analysts at Jefferies noted that the company's guidance for gas prices in the fourth quarter and first quarter of 2025 suggests a neutral to slightly negative impact, forecasting a potential $60 million hit compared to previous expectations.