Yara sees gas prices surging through March as it curbs output to rein in costs (updated)

Yara International ASA

Today 07:23

Adds production curtailment in paragraphs 1, 4 and 5, CEO quote in paragraph 6, detail on demand in paragraph 8.
Yara expects gas costs to be $450 million higher in Q4 2026 and $445 million higher in Q1 2027
Production curbs cut 150,000 tons of ammonia and 115,000 tons of finished products in Q3
Quarterly adjusted EBITDA totals $675 million, about 10% below consensus
By Tristan Veyet and Alexander Gudbrandsen
Oct 22 (Reuters) - Norwegian fertiliser maker Yara YAR.OL said on Thursday it expected gas costs to surge between October and March, after high costs of the raw material prompted it to curtail production through the third quarter.
     Natural gas is a key ingredient and energy source in fertiliser production, meaning price swings can have a significant impact on production costs and prices paid by farmers.
Yara expects natural gas costs to be $450 million higher in the fourth quarter of 2026 and $445 million higher in the first quarter of 2027 than in the same periods a year earlier.
The company curtailed production by 150,000 metric tons of ammonia and 115,000 tons of finished products in the third quarter, mainly at its Ferrara plant in Italy, it said. Year-to-date, its ammonia production is 11% lower than a year ago.
In September, Czech chemicals group Agrofert also said its AGF Nitrogen unit had reduced ammonia production at plants in Germany, Slovakia, Austria and France due to rising gas prices and the high cost of carbon emissions allowances.
"The acquisition of Gulf Coast Ammonia will significantly reduce our European energy exposure upon closing," Yara CEO Svein Tore Holsether said in the earnings statement. It had agreed to buy Gulf Coast Ammonia's plant in Texas for $1.3 billion in July.
Yara reported adjusted earnings before interest, taxes, depreciation and amortization of $675 million for the third quarter, around 10% less than analysts polled by the company were expecting.
On top of gas prices, deferred fertiliser demand weighed on margins and deliveries in the quarter, it said.

(Reporting by Tristan Veyet and Alexander Klyve Gudbrandsen in Gdansk, editing by Milla Nissi-Prussak)
((Tristan.veyet@thomsonreuters.com;))