Street Calls of the Week
Investing.com -- Yara reported stronger-than-expected third-quarter earnings, helped by higher fertiliser prices and ongoing cost reductions.
Adjusted EBITDA came in at $804 million, up from $585 million a year earlier and around 3% above the $781 million expected by analysts in the company’s consensus.
Despite the beat, the company’s shares slid around 4% following the report.
Revenue for the period was $4.10 billion, coming in just below the $4.18 billion forecast.
“Our continuous focus on improvement is delivering solid results, and we are pleased to report another strong operational quarter," said Svein Tore Holsether, President and CEO of Yara.
"The group is prioritizing cash conversion by allocating resources to high-return core assets while scaling back non-core and lower-yield activities, ensuring increased capital productivity."
Looking ahead, based on current forward prices for natural gas and assuming stable purchase volumes, Yara expects gas costs in the fourth quarter of 2025 to be $40 million lower than the same period last year, and $75 million lower in the first quarter of 2026.
Capital expenditure guidance remains unchanged at $1.1 billion, while cost saving targets of $180 million were reaffirmed.
Management did not provide a fresh confirmation of the Blue Ammonia Final Investment Decision (FID) timeline and reiterated that the project must meet a double-digit return threshold.
"Outlook commentary highlights Yara is an attractive partner for any clean ammonia project," Jefferies analysts said.
"It continues to explore the most value accretive option, noting double digit returns remain a key requirement for potential FID and any equity contribution would still enable shareholder distributions in line with its capital allocation policy."