* Adjusted EBITDA NOK 3.22 bln
* Earnings in line with expectations
* Plans big investment with BASF
OSLO, Oct 18 Norwegian fertiliser firm Yara
posted a 23 percent drop in third-quarter core earnings
as Chinese overproduction dragged prices lower, and said it was
considering a major investment in the United States to increase
its presence there.
Yara, the world's biggest nitrate fertiliser maker, said on
Friday earnings before interest, tax, depreciation and
amortisation (EBITDA) excluding one-off items fell to 3.22
billion crowns ($542.75 million) from 4.18 billion a year
earlier, in line with expectations.
Its realized prices for urea, a key fertiliser component,
fell 24 percent while ammonia prices were down 30 percent,
primarily as a Chinese tax credit stoked production and other
low cost markets also stepped up output, the firm said.
"The increased supply from China turned the market
supply-driven, as the highest cost producers needed to curtail
production to balance the market," Yara said.
Banking on its size, a relative advantage, Yara said it was
in talks with chemicals giant BASF to jointly invest
in a "world scale" ammonia plant around the U.S. Gulf of Mexico
coast, supporting the German firm's expansion plans.
Yara's earnings have suffered this year as global fertiliser
prices fell, but analysts say prices may have bottomed out.
Increasing consumer demand and the ending of a low tax
window in China could support prices, though analysts said any
recovery would be very slow.
Yara shares, trading at 8.7 times expected 2013 earnings,
are among the cheapest in the sector, trading well below peers'
average of 13.6 times, according to Thomson Reuters data.