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UPDATE 2-Fertiliser maker Yara braces for more Chinese urea exports
April 22, 2013 / 8:21 AM / 4 years ago

UPDATE 2-Fertiliser maker Yara braces for more Chinese urea exports

* Higher Chinese exports of urea could weigh on prices

* Core profit NOK 4.09 bln vs NOK 4.17 bln forecast

* Shares in Yara fall 3 pct (Adding quotes from CEO)

OSLO, April 22 (Reuters) - Fertiliser maker Yara International is bracing for tougher competition this year as China increases production of urea - one of the Norwegian company’s main products - and energy costs grow.

Reporting lower than expected first-quarter earnings on Monday, the world’s largest nitrogen-based fertiliser maker said urea prices could fall if China continues to increase output and puts more of it on the export market.

“If we get enormous volumes exported from China, then we could see an impact on urea prices,” Chief Executive Joergen Ole Haslestad told Reuters in an interview.

However, he said he doubted China would flood the market with urea, which is used widely in farming as a source of nitrogen: “There will be some impact from it but I don’t think it will be totally destructive”.

Yara shares were down 3.2 percent at 1320 GMT, while the Oslo benchmark share index was flat.

The company expects a rise in energy costs in the second quarter twice as great as previously anticipated. Yara’s factories consume large amounts of gas and some oil.

“The energy cost estimate for the second quarter was quite a large increase and was higher than expected,” said Tomas Skeivys, an analyst at Oslo-based Norne Securities.

Yara said its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) excluding one-off items rose to 4.09 billion crowns ($703.7 million) from 3.94 billion in the year-ago period.

Analysts had on average expected 4.17 billion.

$1 = 5.8122 Norwegian kroner Reporting by Gwladys Fouche and Joachim Dagenborg; Additional reporting by Henrik Stolen; Writing by Gwladys Fouche; Editing by Tom Pfeiffer

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