SA News • Oct. 22, 2014
Yara: An Undervalued Scandinavian Fertilizer Giant
- A recent slump in fertilizer prices means the industry has fallen out of favor.
- Yara is both undervalued and institutionally under-followed.
- The Norwegian state's partial ownership in the company limits the potential downside.
- The future thus looks bright for Yara.
Yara International Offers A Tricky Balance Of Quality And Value
- Urea prices have plunged as Chinese producers operate at a loss, but higher-value nitrates have done considerably better.
- Yara is targeting South America and specialty fertilizer products for fruits and vegetables to drive growth and higher margins.
- Sell-side analysts are generally down on Yara, but if 2014 is truly a trough year, the shares could still have upside into the mid-$50s.
Oct. 22, 2014, 11:59 AM
- Norwegian fertilizer producer Yara (OTCPK:YARIY -1.6%) reports a 9% Y/Y rise in net profit on rising revenue, and says it will invest 2.25B kroner ($343M) to boost production capacity at the Porsgrunn plant in Norway.
- Yara's Q3 net profit totaled 1.71B kroner vs. 1.57B in the year-ago quarter but short of analyst consensus estimate of 2.24B kroner.
- Q3 revenue totaled 24.1B kroner, above 20.6B a year ago and expectations this quarter for 21.6B; EBIT was 2.76B, up from 2.39B a year ago but below expectations of 3.16B.
Oct. 16, 2014, 6:35 PM
- CF Industries (NYSE:CF) and Yara International (OTCPK:YARIY) have terminated merger talks that would have created the world's largest maker of nitrogen-based crop nutrients.
- “Although we identified very significant operational and structural synergies, we were ultimately unable to agree on terms of a transaction that met the requirements of all our respective shareholders,” CF says.
- CF and Yara said Sept. 23 that talks toward a “merger of equals” were at an early stage.
- CF -3.1% AH.
Oct. 7, 2014, 7:52 AM
- Yara International (OTCPK:YARIY) says Jorgen Ole Haslestad has resigned as CEO amid merger talks with CF Industries (NYSE:CF), and has appointed Torgeir Kvidal as acting CEO.
- Yara and CF Industries said last month they were in merger talks to form the world's biggest producer of nitrogen fertilizers, but Yara says Haslestad "would not have a role in a potential merged company."
- Kvidal has been Yara's CFO since 2012 and joined Norsk Hydro in 1991, before the Yara de-merger in 2004; Haslestad has been CEO since 2008, and had said he planned to retire when Yara appointed a new CEO.
Oct. 2, 2014, 2:59 PM
- Fertilizer producers are mostly lower after Agrium (AGU -1.9%) announced weak guidance for H2 of its FY 2014: POT -2%, MOS -0.9%, OTCPK:YARIY -2.8%, IPI -2.3%, RNF -1.2%, but CF +2.4%.
- Canaccord and Piper Jaffray downwardly revised their 12-month price targets for the stock, by a respective 1.9% to $102 while reiterating a Buy rating and by 4.2% to $92 while maintaining a Neutral rating; however, BMO and RBC each reiterated their Outperform ratings on the stock with respective target prices of $99 and $115.
- Jim Cramer thinks AGU's woes could reverberate throughout the ag sector, at least in the near-term, with selling possibly spread to the likes of Monsanto (MON -0.4%), Syngenta (SYT +0.1%), Deere (DE +0.1%) and Agco (AGCO +1%).
Sep. 26, 2014, 9:48 AM
- Yara International (OTCPK:YARIY) is again hunting for a new leader after Norsk Hydro (OTCQX:NHYDY) CEO Svein Richard Brandtzaeg reverses his decision to take the top job, partly due to Yara's merger talks with CF Industries that could create the world’s largest fertilizer supplier.
- Brandtzaeg felt Yara breached its contract because he agreed to join the company July 18 but was not aware of the CF talks until he was informed Sept. 9, according to a Norsk Hydro spokesperson.
Sep. 23, 2014, 5:58 PM
- Talks that could lead to the creation of a new fertilizer producing giant are the latest example of how the boom in natural gas from fracking is transforming not just the world of U.S. energy but other industries too, a Bloomberg analysis says.
- CF Industries (NYSE:CF) and Yara International (OTCPK:YARIY) said today they’re in preliminary talks about a merger, and both companies use gas to capture nitrogen from the air to make crop nutrients; the advantage of doing that in the U.S. is stark, as CF’s operating profit margin was 43% last year vs. Yara’s 9.2%.
- Yara needs to have a meaningful business in the U.S. to become a global player; CF’s motivation in talking to Norway-based Yara may be to expand beyond the U.S. in anticipation of rising domestic fertilizer supplies, which may put pressure on prices.
- A combined CF-Yara would have ~$19B in sales, more than any other fertilizer company.
Sep. 23, 2014, 7:20 AM
- Yara International (OTCPK:YARIY) is in talks with CF Industries (NYSE:CF) about a possible merger of equals, a deal that would create a fertilizer giant with a market value of over $27B.
- "The discussions are at an early stage, and there can be no assurances that these discussions will result in any transaction," says Yara in a filing.
- Norway's government and possibly parliament would have to approve of any deal, as the state holds 36.2% of Yara, plus an additional 5% through state pension fund Folketrygdfondet.
Sep. 3, 2014, 8:35 AM
- Nitrogen fertilizer seller Yara International (OTCPK:YARIY) says it plans to build a $2.5B plant in west or east Africa once gas projects come onstream toward the end of the decade.
- CEO Joergen Ole Haslestad says Yara has held initial talks with governments in countries such as Tanzania, Angola, Ghana, Nigeria and Mozambique about building a “considerable and world-class” urea factory to produce for African and foreign markets.
- The CEO says Yara also plans to add to its existing seven African bagging and warehousing facilities by opening a $20M unit close to the harbor in Tanzania's capital Dar es Salaam, and plans a similar venture in Ghana once the economic situation improves in that country.
Jun. 23, 2014, 10:45 AM
- Norway's government says it will retain its current holding in Statoil (STO), backing off a pre-election proposal to cut its stake to ~50% from the current two thirds of the shares.
- Although the new Conservative government had pledged to reduce the state's role in the economy, the trade minister says STOl has a special place in Norwegian oil and gas policy and there's broad political agreement that the state should keep a majority stake.
- The government also plans to keep stakes in fertilizer producer Yara (YARIY, YRAIF), aluminum producer Norsk Hydro (NHYDY) and bank DNB (DNHBY) at current levels.
Oct. 18, 2013, 8:49 AM
- German chemicals firm BASF (BASFY.PK) and Norwegian fertilizer maker Yara (YARIY.PK, YRAIF.PK) are evaluating a potential joint investment in a "world scale" ammonia plant at the U.S. Gulf coast.
- Yara, with its global ammonia network and market expertise, seeks to increase its presence in the U.S.; BASF, which has a strong U.S. presence, is currently a major user of ammonia for its U.S. downstream manufacturing activities and intends to further strengthen its backward integration.
- Other fertilizer producers such as CF, MOS and AGU could see interest today on the news.
Dec. 7, 2012, 6:36 AM
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