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1. Company Snapshot

1.a. Company Description

Yara International ASA provides environmental and industrial solutions in Norway, European Union, Europe, Africa, Asia, North and Latin America, Australia, and New Zealand.The company offers nitrogen-based fertilizers, including urea, urea ammonium nitrate, calcium ammonium nitrate, ammonium nitrate, and ammonium sulfate; compound fertilizers that contain plant nutrients, such as nitrogen, phosphorus, and potassium; and blended products, as well as foliar and fertigation solutions through micronutrients.It also offers farmer centric solutions; solutions for farming, such as crop monitoring, variable rate fertilization, N-Tester BT, and Driving Mode, a mobile app; N-Sensor, a tractor-mounted tool that allows growers to measure a crop's nitrogen requirement; CheckIT, a smartphone app using a library of crop photographs to give a simple and fast identification of nutrient deficiencies; TankmixIT, an app used to check for the physical compatibility when tank mixing; and Tankmix.com, an online service providing advice on the physical mixing characteristics of Yara's foliar products with agrochemicals.


The company sells its products under YaraBela, YaraLiva, YaraMila, YaraRega, YaraTera, YaraVera, and YaraVita brands name.Yara International ASA was founded in 1905 and is headquartered in Oslo, Norway.

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1.b. Last Insights on YAR

Yara International ASA's recent performance was driven by strong Q1 2025 earnings, with EBITDA excluding special items up 47% year-over-year, and net income increasing to USD 295 million from USD 16 million in Q1 2024. The company's robust market share growth and strategic project progress, despite navigating pricing volatility and geopolitical uncertainties, contributed to its strong performance. Additionally, Yara's scale and global optimization provided flexibility, supporting nitrogen upgrading margins in the medium term.

1.c. Company Highlights

2. Yara's Fourth Quarter 2024 Earnings Reflect Strategic Adjustments Amid Challenging Market Conditions

Yara reported mixed financial performance in its fourth quarter 2024 earnings, with revenues declining 1.6% year-over-year, reflecting weaker demand and pricing pressures in key markets. The company's EBITDA margin contracted slightly, impacted by higher energy costs and operational inefficiencies, though management emphasized progress toward its $150 million cost reduction target for 2025. Thor Giæver, CFO, noted that "the current quarter's lower free cash flow is primarily due to higher working capital tied to rising prices and margins," highlighting the near-term cash flow management challenges. Diluted EPS for the quarter was reported at $0.85, down 12% year-over-year, reflecting both the margin compression and higher tax rates. The stock currently trades at a TTM P/E ratio of 531.85, reflecting elevated valuations despite the earnings decline, while the price-to-sales ratio of 0.54 suggests a cautious stance on revenue growth prospects.

Publication Date: Feb -27

📋 Highlights
  • Delay in Clean Ammonia FID:: Yara has postponed the Final Investment Decision (FID) for its Clean Ammonia projects in the U.S. until the first half of 2026, citing the need for further technical development and monitoring of political and market conditions. Profitability remains a key criterion for proceeding.
  • $150 Million Cost Reduction Target:: The company confirmed its $150 million cost reduction target for 2025, with the majority of savings expected in the second half of the year. Lower free cash flow in the current quarter is attributed to higher operating capital due to rising prices and margins.
  • Dividend Reduction:: Yara reduced its dividend payout to manage near-term cash flow cautiously and stay within its leverage target range. However, the positive market outlook suggests potential for future dividend increases.
  • Global Nitrogen Market Tightening:: The global nitrogen market is tightening, particularly in the U.S., due to supply constraints such as production curtailments in Egypt and China, and strong demand in India. This is expected to support fertilizer prices despite uncertainties around U.S. tariffs.
  • Focus on Partnerships and Capital Efficiency:: Yara is leveraging partnerships and joint ventures to enhance capital efficiency in its Clean Ammonia projects. Discussions are ongoing for partnerships and equity funding structures, emphasizing Yara's expertise and market position in clean ammonia.

Strategic Updates and Delayed Investments

Magnus Ankarstrand, CEO, outlined the decision to delay the Final Investment Decision (FID) for Clean Ammonia projects in the U.S. until the first half of 2026, citing the need for further technical development and monitoring of political and market conditions. Ankarstrand emphasized that "profitability remains a key criterion for moving forward," signaling a disciplined approach to capital allocation. Yara is actively exploring partnerships to enhance capital efficiency, leveraging its expertise in clean ammonia production. The company also highlighted strong interest in its Clean Ammonia projects, with ongoing discussions for partnerships and equity funding structures, positioning Yara as a leader in the emerging green energy space.

Market Fundamentals and Operational Insights

Dag Tore Mo, Head of Market Intelligence, pointed to tightening global nitrogen markets, particularly in the U.S., driven by supply constraints in Egypt and China, alongside strong demand in India. While Indian buying is expected to normalize in 2025, uncertainty lingers around Chinese export policies, which could impact global supply dynamics. On the operational front, Yara reported weaker distribution margins in Brazil at $30 per tonne, while working capital remains elevated at 108 days. Management reiterated its commitment to reducing working capital through operational improvements, though no specific timeline was provided. The company also addressed the mothballing of its U.K. plant, attributing the decision to high gas costs and the availability of competitive hydrogen feedstock, with Maria Gabrielsen emphasizing that the closure is not permanent.

Valuation and Outlook

Yara's current valuation reflects a mix of near-term challenges and long-term growth potential. The stock's TTM price-to-book ratio of 1.07 indicates a modest premium to book value, while the enterprise value-to-EBITDA ratio of 7.56 suggests a reasonable valuation given the company's leverage and growth prospects. The dividend yield of 1.52% provides some income support, though the recent reduction in payouts reflects cautious cash flow management. Analysts remain divided on the stock's outlook, with some highlighting the risk of further margin compression, while others point to Yara's strategic positioning in clean energy and its ability to navigate macroeconomic uncertainties. With analyst estimates pointing to a 1.6% decline in revenues for the next year, the market will closely monitor Yara's execution on cost savings and its progress in clean ammonia investments.

3. NewsRoom

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Specialty Fertilizer Market Competitive Landscape Report 2025: Recent Developments, Strategy, Sustainability, Product Launches, Key Persons, and Revenue Forecasts

Nov -24

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Yara International (OB:YAR): Is the Fertilizer Leader Fairly Valued After Recent Gains?

Nov -04

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3 Fertilizer Stocks to Keep an Eye on in a Challenging Industry

Oct -31

Source: zacks.com

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Liquid Fertilizers Market Analysis, Competitive Strategies and Forecasts Report 2025-2033: Market is Moderately Fragmented, with Key Players Like Nutrien and Yara International Leading Innovations

Oct -29

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Crop Micronutrients Market Forecast Report 2025-2030 | Chelated Micronutrients Gain Popularity in Precision Agriculture

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Enel (BIT:ENEL): Is the Current Valuation Overlooking Subtle Shifts in Performance?

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.09%)

6. Segments

Americas

Expected Growth: 4.83%

Yara International ASA's 4.83% growth in Americas is driven by increasing demand for crop nutrients, favorable weather conditions, and government initiatives promoting sustainable agriculture practices. Additionally, the company's strategic partnerships and investments in digital farming solutions have enhanced its market presence and competitiveness in the region.

Europe

Expected Growth: 4.65%

Yara International ASA's 4.65% growth in Europe is driven by increasing demand for crop nutrition and environmental solutions, supported by the region's focus on sustainable agriculture and climate action. Strong sales in key markets like Germany, France, and the UK, as well as strategic partnerships and investments in digital farming, contribute to the company's growth momentum.

Africa & Asia

Expected Growth: 4.65%

In Africa and Asia, Yara International ASA's 4.65% growth is driven by increasing fertilizer demand from smallholder farmers, government subsidies for agricultural development, and investments in infrastructure and logistics. Additionally, Asia's growing middle class and Africa's population growth are driving up food demand, further boosting fertilizer sales.

Industrial Solutions

Expected Growth: 4.83%

Yara International ASA's Industrial Solutions segment growth of 4.83% is driven by increasing demand for clean air and water solutions, growth in the oil and gas industry, and rising adoption of digital technologies. Additionally, the segment benefits from Yara's strong market position, strategic partnerships, and investments in research and development.

Clean Ammonia

Expected Growth: 11.47%

Yara International ASA's Clean Ammonia growth is driven by increasing demand for carbon-free energy, government incentives for green ammonia production, and strategic partnerships to develop large-scale projects. Additionally, the company's expertise in ammonia production and its existing infrastructure provide a competitive advantage, enabling it to capitalize on the growing market for clean energy solutions.

Other and Eliminations

Expected Growth: 4.85%

Yara International ASA's Other and Eliminations segment growth of 4.85% is driven by increased sales of industrial gases, higher prices for environmental products, and a favorable currency impact. Additionally, the segment benefited from the consolidation of acquired businesses, leading to higher revenue and profitability.

Global Plants & Operational Excellence

Expected Growth: 4.65%

Yara International ASA's Global Plants & Operational Excellence segment growth of 4.65% is driven by increased fertilizer demand, improved operational efficiency, and strategic investments in digitalization and sustainability initiatives, enabling the company to optimize production costs and enhance its competitive position in the market.

7. Detailed Products

Fertilizers

Yara International ASA produces a wide range of fertilizers, including nitrogen, phosphorus, potassium, and micronutrient-based products, catering to various crop and soil types.

Crop Nutrition

Yara's crop nutrition products provide essential nutrients to crops, promoting healthy growth and development, and are available in various formulations and application methods.

Industrial Chemicals

Yara produces industrial chemicals, including nitric acid, ammonia, and urea, used in various industries such as pharmaceuticals, dyes, and explosives.

Environmental Solutions

Yara's environmental solutions focus on reducing emissions, improving air and water quality, and providing sustainable solutions for industrial and agricultural applications.

Digital Farming

Yara's digital farming solutions provide farmers with data-driven insights, precision farming tools, and decision support systems to optimize crop management and reduce waste.

8. Yara International ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Yara International ASA operates in the fertilizer industry, where substitutes are limited. However, the company faces competition from organic fertilizers and other sustainable alternatives, which could potentially substitute traditional fertilizers.

Bargaining Power Of Customers

Yara International ASA's customers are primarily farmers and agricultural companies. While they have some bargaining power, the company's strong brand and wide distribution network reduce their negotiating power.

Bargaining Power Of Suppliers

Yara International ASA relies on suppliers for raw materials such as natural gas, ammonia, and other chemicals. While suppliers have some bargaining power, the company's large scale and diversified supply chain mitigate this risk.

Threat Of New Entrants

The fertilizer industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows Yara International ASA to maintain its market position.

Intensity Of Rivalry

The fertilizer industry is highly competitive, with several large players competing for market share. Yara International ASA faces intense rivalry from companies such as Nutrien, Mosaic, and CF Industries, which could impact its market share and pricing power.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.90%
Debt Cost 5.74%
Equity Weight 64.10%
Equity Cost 5.74%
WACC 5.74%
Leverage 56.01%

11. Quality Control: Yara International ASA passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Grupa Kety

A-Score: 6.5/10

Value: 4.1

Growth: 6.0

Quality: 6.2

Yield: 9.4

Momentum: 6.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Navigator

A-Score: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
ICL

A-Score: 5.8/10

Value: 5.2

Growth: 3.7

Quality: 4.2

Yield: 8.8

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Yara

A-Score: 5.8/10

Value: 7.3

Growth: 1.9

Quality: 4.4

Yield: 6.2

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
K+S

A-Score: 4.7/10

Value: 7.6

Growth: 2.7

Quality: 2.5

Yield: 4.4

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

389.9$

Current Price

389.9$

Potential

-0.00%

Expected Cash-Flows