UPDATE 1-Yara spurs efficiency drive after solid quarter

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OSLO, Feb 8 (Reuters) - Fertiliser producer Yara International will step up its programme to cut costs and boost core earnings in the first half of 2019, the Norwegian firm announced on Friday, after meeting expectations with a 21 percent rise in quarterly profit.

“Yara has identified additional improvement potential and plans to expand both the scope and timeframe of the programme during first half 2019,” the company said.

“Following a period of heavy investments, our focus in 2019 is on ramping up our current growth projects, continued operational improvement and maintaining strong capital discipline,” Chief Executive Svein Tore Holsether said.

Yara shares opened 3.6 percent higher at 360 Norwegian crowns and stood up 2 percent at 354 crowns at 0903 GMT.

Started in 2016, the cost savings and efficiency programme aims to boost annual earnings before interest, tax, depreciation and amortisation (EBITDA) by $500 million by 2020.

As of the end of the fourth quarter, the company said it had made changes yielding annual earnings improvements amounting to $355 million, with $90 million of this achieved in 2018.

Its fourth-quarter EBITDA rose 21 percent to $424 million before non-recurring items, in line with the $422 million forecast by analysts in a Reuters poll.

Yara said it expects spot prices on natural gas, its key cost, in the first quarter to be $20 million higher than a year earlier, but to be $10 million cheaper than a year earlier in the second quarter.

The board proposed to pay a dividend of 6.50 Norwegian crowns per share for 2018, unchanged from 2017 and higher than the 5.67 crowns expected by analysts in a Reuters poll. (Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Jason Neely)