Yara International ASA

Overview Key strengths Key risks World's largest distributor of fertilizer by volume, with good geographic diversity. Profits anchored in the highly cyclical nitrogen fertilizer industry. Joint ventures in areas where cost of gas is low, along with large, efficient production facilities. The majority of its ammonia production (about 56% of global capacity) is currently in Europe, which exposes Yara to currently high and volatile gas prices. Improving credit metrics, with funds from operations (FFO) to debt forecast to remain within the rating commensurate 30%-45% in 2024-2026. Cash flow swings, reflecting cyclicality of the fertilizer industry. Financial policy commitment to maintaining a 'BBB' rating. Capital intensity and long lead time to add or expand capacity. Yara delivered improved performance in the

...We expect Yara's credit ratios will recover in 2024 on the back of EBITDA growth. Yara delivered improved performance in the first nine months of 2024, in line with S&P Global Ratings' expectations. The company's S&P Global Ratings-adjusted EBITDA increased to about $1.4 billion, compared to $970 million over the same period last year. The results were underpinned by higher deliveries, improved production reliability, and better margins as reduced energy costs more than offset the impact of lower selling prices. Its 2023 results had been adversely impacted by high tax expenses, reflecting the exceptional profitability in 2022,...

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