Yara delivered better numbers than expected in the fourth quarter, because the company was better paid for fertilizer and a strong dollar.
Although the result of the fertilizer was destroyed by sharp sharpness in gas prices. Yara does not pay so much for its European gas from the first season of 2014.
Yara European business has had to spend $ 6.6 per million British heaters (MMBtu) in the fourth quarter of 2017, but last quarter of the quarter, The company paid $ 9.4 per MMBtu – an increase of 42%.
Gas is a key factor in composting, and on their own, gas costs are consumed; Reduced enhanced profit profit (EBITDA) with $ 93 million in the fourth quarter.
However, when the company can measure the fourth of the best 2.5 years, this is largely due to higher prices of fertilizer and a stronger dollar.
Read more: Stronger numbers from Yara
"Europe's high heat prices are slowing down the season, but then we have got better margins from higher prices that are very effective, and then we have a positive impact on our innovations we got in India and Brazil, "said CFO Lara Røsæg to Y24 to Y24.
– Gas is the most important thing, says Yara Head of Svein Tore Holsether to E24.
– The quick calculation is that we have one dollar change at our lowest line of $ 160 million. Last year's development, particularly during the summer and to the autumn, is particularly negative, especially for those with a major European production center , he says.
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Holsether says European gas prices are aligned to the price of oil last year's last year, and this week they were around $ 6.2 per MMB. Typically, fertilizer prices are also up-to-date with energy prices, and so on. Costs for more Yara costs.
– If you see it over time, there is a strong link between energy prices and manure prices, but then you can have periods where they are not moving in tact, Holsether says.
– Now they have moved rapidly, both in 2018 and 2019. Last year, gas prices were significantly enhanced, but also made the same prices of urea, and now the way other. Over time, fertilizer prices are enough and will show energy prices, so we'll regaining something back, he says.
Changes in gas price
After being up to $ 10 to $ 11 per MMB over the period 2011 to 2014, the gas price in Europe fell with oil prices. In two quarters of 2016, Yara paid less than $ 5 per MMBtu.
Gas price reduction during this time contributed to strengthening headaches for gas producers such as Statoil and the Norwegian state, but brought tail to Yara.
Read more: Yara serves at the head of the energy business
In recent years, oil and gas prices have been gradually built, which is a major decline in Norwegian companies such as Equinor and Aker BP, giving other effects to Yara. This already marked its company from the beginning of 2018.
Read more: Higher gas prices affect Yara: – It is a concern
Some of Yara's plants in Europe can also be struggling to get larger if their gas price is too high.
Read more: Animal gas can threaten Yara's plants in Europe
Your gas price is & # 39; fall in 2019
In the first season, gas prices have sunk, and some of the reasons, according to Holsether, are the changes in the # 39; global market for loose natural gas (LNG), which is carried by boat.
– Prices have turned and started to go down again. The LNG export for Europe has grown considerably, it began to expand in total in October, November. height and high December. We have not given us a hot weather in Europe, which is also compiled, says Holsether.
After a period of what LNG (dry natural gas) has gone to Asia, its production has expanded so much that there is more scope to do it; exporting to Europe too.
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"We are now seeing the impact of Australian projects in particular, but also American projects, and then it's a good market for it," said Holsether.
More gas on market
The IEA considered last year that a new wave of LNG projects would add 140 billion cubic meters of more gas to the world market from 2018 to 2023. This is a responding to more than the total gas exports of Norwegian gas to Europe.
Of this, there are about 80 billion cubic meters from the United States, with 30 billion cubic meters from Australia and 15 billion cubic meters from Russia.
Read more: The IEA report aims to increase new expectations in the US: A & # 39; Waiting plenty of gas
– We are delighted to have a lot of capacity built on LNG, which means that there is more opportunity to introduce gas to Europe and that is; priced more equally in the world market, says Holsether.
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