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Edited Transcript of YAR.OL earnings conference call or presentation 18-Oct-19 12:00pm GMT

Q3 2019 Yara International ASA Earnings Call

Oslo Oct 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Yara International ASA earnings conference call or presentation Friday, October 18, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Dag Tore Mo

Yara International ASA - Head of Market Intelligence

* Lars Røsæg

Yara International ASA - Executive VP & CFO

* Terje Knutsen

Yara International ASA - EVP of Sales & Marketing

* Thor Giæver

Yara International ASA - Head of IR

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Conference Call Participants

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* Andrew Gregory Stott

UBS Investment Bank, Research Division - MD and Research Analyst

* Chetan Udeshi

JP Morgan Chase & Co, Research Division - Research Analyst

* Eivind Sars Veddeng

DNB Markets, Research Division - Analyst

* Joel Jackson

BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst

* Lisa Hortense Maria De Neve

Morgan Stanley, Research Division - Equity Analyst

* Thomas P Wrigglesworth

Citigroup Inc, Research Division - Director and Chemicals and Basic Materials Analyst

* Ziad Saada

Scotiabank Global Banking and Markets, Research Division - Associate

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Presentation

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Lars Røsæg, Yara International ASA - Executive VP & CFO [1]

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Good morning, good afternoon all and welcome to Yara's Q3 results conference call.

I'm sure most or all of you have seen our report and presentation from this morning, so I will limit my opening comments. The EBITDA, excluding special items and IFRS 16, increased by 49% in the quarter. And the results reflect the lower energy cost, higher production and strong premium deliveries in line with our strategy where we prioritized value over volume.

We are delivering on our long-term targets operationally with higher production, reliability and energy efficiency and commercially with strong premium product sales and realized prices, improving sales and marketing EBITDA per tonne.

As you may also have seen, we, this morning, also announced the share buyback program. This is the first quarter where we are within our target range of 1.5 to 2x net debt-to-EBITDA, which we announced as part of our capital allocation policy at the Capital Markets Day in June, and the announced buyback program would, by the 30th September numbers, bring our net debt-to-EBITDA back to approximately 2x.

This means that we will buy back approximately 0.5% of our outstanding shares by the end of the year. But this represents 0.8% of our shares outstanding when we also include the proportional redemption of shares owned by the Norwegian state or equivalent to approximately NOK 800 million at today's share price.

With these introductory remarks, we are ready for the Q&A. So operator, can we please now open for questions?

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Questions and Answers

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Operator [1]

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(Operator Instructions)

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Lars Røsæg, Yara International ASA - Executive VP & CFO [2]

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Operator, it looks -- from our side, it looks like there are several people waiting to ask questions, so please go ahead.

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Operator [3]

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As of the moment, sir, no questions that I'm seeing on the queue. (Operator Instructions) We now have our first question, and this comes from the line of Thomas Wrigglesworth.

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Thomas P Wrigglesworth, Citigroup Inc, Research Division - Director and Chemicals and Basic Materials Analyst [4]

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Three, if I may. Firstly, on the share buyback. How should we think about this going forwards? Is it each quarter, you're going to renew the buyback? Or will it be as we get towards the end of the year, you'll make a decision about top-ups for buybacks? How should we think about the continuity of the share buyback program?

The second is -- would focus on near-term earnings. Obviously, you started the fourth quarter, and we've seen a little bit of weakness in urea prices. But I wonder if you can give us an overall picture for the fourth quarter because it looks to me that the consensus is still relatively light on a full year basis versus if you were to kind of repeat the same level of third quarter performance again in the fourth quarter, which looks sensible given the gas price benefit that you forecast.

The third question, sorry, is about Indian production. So you highlight with your data on the supply growth that we've seen a very significant amount of capacity addition in India over this year and last year, and yet, production is weaker in India year-over-year in 2019. I wonder if you can share any insights as to what you think is happening with regards to the Indian level of production given that we all probably thought that was going to be a positive, i.e., production would we higher this year.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [5]

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Yes. Thank you very much for those questions. If I may start on the question on the buyback. As I alluded to in the start of the call, we have a new capital allocation policy from the Capital Markets Day in June, where our targeted range of net debt-to-EBITDA is to be within 1.5 to 2. And this quarter, we are at 1.9, a little bit above that. And as such, what we're doing now is announcing a buyback program, which by the 30/9 will bring us back up to 2.

Going forward, we will base our decisions on this capital allocation policy. But what we have said is that under this policy, the current improved market fundamentals combined with the extended improvement program and the increased hurdle rate for new investments may lead to increased dividend capacity beyond the ordinary payout ratio going forward.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [6]

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This is Terje Knutsen, Sales & Marketing. On the market side for Q4, obviously, the Northern Hemisphere is in the low season, so it's quite normal that this is a quarter which is -- could go both ways, either weight and have a relatively heavier weight in Q1, or we could see renewed buying now during Q4.

So far, quite normal season. A lot of market still remaining in Europe, relatively low urea positioned in the market in Europe, which is positive. But exactly how these will play out between Q4 and Q1 obviously remains to be seen.

Brazil, I think you will see that we will continue what we have tried to do, which is to optimize our portfolio and partly step out of the most marginal sales that would typically be low-margin blends. And we are continuously trying to position ourselves in segments where we can grow our premium product range. This is -- has been successful during third quarter, and we expect that we will continue this strategy into fourth quarter, which obviously is in-season quarter in the Southern Hemisphere.

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [7]

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On your India question, it's correct in that the table with new capacity, certainly one of our own assessment is the CRU assessment that we use due to our own guiding policy that a large part of the presumed capacity growth for 2019 would be in India, while the facts are that production in India is stable. So far this year, compared to last year, it was actually lagging quite a bit. But due to relatively strong production in August and September, it's kind of, more or less, caught back to equal same period last year.

And there are a number of issues. There is actually a new plant that has started off. So that's not a wrong assessment, but they are having problems on the production side partly due to technical issues with some other plants partly due to weather issues. One had to close due to lack of water, for instance, et cetera, because of very hot and dry summer they had initially until the monsoon really hits. And I don't know if you've also seen now that one producer, [Swide], just now announced that they are closing down everything, so -- temporarily because they do not have cash basically because of the delays in the subsidy payments from the government, so that's also kind of a [power game] that's still ongoing.

So I think it's important to see the whole India situation a little bit beyond just those plants that have been revitalized to put it that way. There are 2 more in the pipeline that are struggling with gas pipelines, actually, and it'll be a little unclear exactly when they will be able to produce. So India is with a strong demand development. They've been very active buyers, and you've probably seen that yesterday, they got [30] -- they got approval from the Department of Fertilizers to buy 1.1 million tonnes of urea. And at least some of the consultants are actually -- think they actually -- they were actually looking for more. So this could also be positive going forward.

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Operator [8]

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And we'll now take our next question, and this comes from the line of Ben Isaacson.

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Ziad Saada, Scotiabank Global Banking and Markets, Research Division - Associate [9]

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This is Ziad Saada in for Ben. So just on Slide 30 of your presentation, you show how nitrogen supply growth is going to go down, but you do -- you are excluding China. So could you just please talk a bit about how you see the development of the Chinese nitrogen market? Specifically, could you comment on their policy for negative demand growth domestically, maybe how you see permanent versus temporary plant closures, how much new capacity you think is coming online and then what that all means for exports?

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [10]

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Yes. Those are local issues, of course. I mean they -- China, on the policy side, on the demand side, they initiated a 0 growth policy a couple of years back, which you could say is already a little bit outdated, you might say, because of the supply issues they've had over the last years, and they've produced 70 million tonnes of urea in 2015 and now just about 50 million tonnes at the moment. They had a huge rationalization because of cost pressures, and even more important, maybe the environment, the concerns from a lot of these plants. So they haven't -- on nitrogen, they haven't basically achieved these political targets on the demand side and more.

So I think that it's the market forces that is going to be the most important, and there is very little new capacity in the pipeline, and there are still plants that are, we think, due to close. And a couple of key provinces, again, reiterated that there is going to be curtailment also this winter going forward as there has been in the past. So yes, it doesn't look good, like there is a lot of kind of the dynamics on the demand versus supply side. But of course, what we are probably wanting to kind of assess is the whole kind of availability from China would kind of match the need for Chinese exports from the rest of the world. And so of course, you don't have to tweak the parameters too much to get quite a wide range of, let's say, outcomes. So yes, it's a key question.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [11]

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And I think, domestically, in China, this is positive for a company like Yara. We try to do more with less, as we say, and this is very much what also the Chinese government would like to see in agriculture. So our more, you could say, high-end way of producing with premium products and not at least the knowledge base we have will open up opportunities for Yara going forward.

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Operator [12]

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And we will now take our next question, and this comes from the line of Joel Jackson.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [13]

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Joel Jackson from BMO. I had a few questions I'll ask one by one. Typically, in the last few years, we've seen nitrate prices or cyan prices be strong in the third quarter and hold that strength in the fourth quarter. It's a little bit different here. Maybe you can comment a little bit about that nitrate pricing being a little bit different now than we've seen in the last couple of years.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [14]

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Yes. First, I think we, as we've said this morning, we feel that we got off on a good foot, so to say, in Europe on the pricing. I think we have seen a somewhat falling price trend on nitrogen during the second half of the quarter, which obviously influences the buying pattern. I think we are, as was said in the introduction, looking at value over volume. And we keep -- believe that there is a lot of market left in Europe. And we try to price our product according to the, let's say, return for the farmer on grain in Europe. And there, we have had a quite stable pricing on the nitrates versus grain. So we look at many parameters when we are pricing our product, and we will continuously look at both the commodity underlying prices, but also for sure, the farm economy in Europe.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [15]

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Okay. And the NPK premium was, I think, strong again in the third quarter, similar to second quarter, and these are some of the strongest NPK premiums you've had in a few years. What is the trend on the premium there? And what's affecting the market in the fourth quarter?

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [16]

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Yes. So obviously, on NPK, we have had a falling price trend on, particularly, P and K. And we are, as Yara, in many segments, which are much less exposed to the commodity pricing than the more extensive crops, which are typically more exposed. We are also working very deep in the markets, deep into the value chain where some of the volatility is, let's say, being, yes, less radical or less -- there is more slowness in it. So I think it is a part of our business model that we would see less volatility in our NPK than in the general commodities.

And in periods when commodities fall like they do now, we would typically benefit. And there is a slowness in the adjustments, which obviously, is by design. So we feel that we have had a good balance between margin and volume. This is always something we look at very carefully. And right now, we have felt that we can hold price and continue to focus on those market segments that allow us to take out that premium.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [17]

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Maybe I'll ask 2 more questions. So how much of your gas is locked in right now in both the fourth quarter and the first quarter?

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Lars Røsæg, Yara International ASA - Executive VP & CFO [18]

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Yes. So our policy and our exposure is spot. So what you have is you have delay by 1 month to the spot prices into our system. But we are and we have always been spot on the gas prices.

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Joel Jackson, BMO Capital Markets Equity Research - Director of Fertilizer Research & Analyst [19]

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Making sure nothing changed in the first quarter. And then my final question would be where -- what is your view on consolidation in the nitrogen industry right now. Do you think another wave of consolidation is needed? We've seen some interesting moves in the last weeks that have been finalized here. Do you think another wave of consolidation is needed? And what might that look like if you're able to comment?

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Lars Røsæg, Yara International ASA - Executive VP & CFO [20]

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Yes. So as we've said at our Capital Markets Day and many times before, our focus now is on increasing our returns through delivering on our strategy and delivering on our committed investments and our improvement program. So that is really the main priority that Yara has and which we believe is really what is the most important priority for us to have as a company. And then we, of course, we are in the industry as everybody else, but that is our priority, to deliver on that strategy.

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Operator [21]

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And your next question comes from the line of Andrew Stott.

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Andrew Gregory Stott, UBS Investment Bank, Research Division - MD and Research Analyst [22]

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A couple of questions, 1 short term, 1 medium term. Can I come back to the mix comment? I listened to the webcast this morning, and you explained the gross margin improvement and the limited impact from the 5% drop in volumes as the NPK element. Is that just a reference to blends versus compounds? Is that what's happening there? Even then I struggle a bit with the math, so if you can help me just -- if it's the case that selling 50,000 more compound material gives you that uplift in gross margin, just, yes, just anything you can help me on that. I'm just struggling a bit squaring that.

Secondly, the Nel JV on the clean hydrogen. Just wonder where you are with that from a chronological standpoint, from a capital commitment standpoint. And I'm most interested in anything you can tell me about the process because it wasn't particularly clear to me.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [23]

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Yes. So NPK for us consists of the compound NPK but also some of the blended NPKs. And typically, we would be much more exposed to the commodity pricing in our blended NPKs versus the compound NPKs. That has to do with the market segments that we serve with our compounds. We typically position them into cash crops or higher-value crops, where again, the farmers are more after productivity and quality of the end produce than necessarily, let's say, fighting for the cheapest input on the NPK. And I think you can find in the report the split between compound and blended NPK.

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Andrew Gregory Stott, UBS Investment Bank, Research Division - MD and Research Analyst [24]

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Yes. Well, but that was really my question because you've only sold an extra 50,000 tonnes, so 3% growth. And your total NPK portfolio is down 5%, which is in line with your total deliveries. So I'm just surprised about each -- I mean if you tell me that margins are so good in compounds, then that's fine. But otherwise, I struggle a bit with the math.

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Thor Giæver, Yara International ASA - Head of IR [25]

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So Andrew, this is Thor here. I mean we have linked the NPK strength to this. But the mix effect more broadly is describing that we have had a better development for our own produced products, which we normally have higher margins on compared to the more trade and commodity side. And so there is quite a wide range of, let's say, dollar per tonne margin, let's say, between a third-party sourced sale -- trade sale and a high-margin NPK, or for that matter, urea produced in Belle Plaine. So it's a broader comment, which is about NPK.

And maybe just for the second question, Andrew, would you mind repeating because we picked up it was about the Nel Corporation. But could you repeat the full question?

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Andrew Gregory Stott, UBS Investment Bank, Research Division - MD and Research Analyst [26]

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Yes. Just looking for more background on it. That will be helpful. Just what the production process is, what sort of CapEx would you be looking at, just where we are with the current JV because I wasn't too familiar with it.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [27]

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Yes. This is Lars. Thanks for asking. As you would recall from the Capital Markets Day, reducing our CO2 footprint and look at decarbonization is one of our strategic priorities. And then -- and this is not essentially a joint venture. This is a collaboration agreement, which is really about looking into different pilot technologies around decarbonization and a renewable production of hydrogen. And there is no material capital associated with that collaboration.

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Andrew Gregory Stott, UBS Investment Bank, Research Division - MD and Research Analyst [28]

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And would you put it on a time frame that's meaningful? So are we looking at the next few years or the next decade? Or is it too early to know?

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Lars Røsæg, Yara International ASA - Executive VP & CFO [29]

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Yes. No. So what we've said is a 10% reduction towards 2025 when it comes to CO2 equivalents and for us to be climate neutral by 2050. And this is one of many initiatives that we have within that space to sort of support that venture.

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Operator [30]

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And your next question comes from the line of Lisa de Neve.

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Lisa Hortense Maria De Neve, Morgan Stanley, Research Division - Equity Analyst [31]

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So most of my questions have been asked, but 2 small ones. So one, could you walk us through the change in net operating capital for the quarter? And in your net -- in your improvement program, a little bit more granularity on that and the main movements. And I'm not talking about the prepayments, which are unwinding, but the other changes. And then back to the sales and marketing department, which was up 24%. I'm just wondering, you discussed the NPK side but there are other movements that are worth mentioning in that.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [32]

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Yes. Thanks. This is Lars answering your first question. As we said this morning, in the quarter, in isolation, then from Q2 to Q3, the increase is actually lower than last year. But, of course, these are prepayments in Brazil, a reduction in that, and also related then to the gas subsidy payments in India where there is a time lag. If you look at the KPI where we are measuring operating capital based on a rolling 12-month basis, a main -- the main driver behind that is an increase on the inventory side where we have made, as Terje has been talking about earlier, deliberate commercial decisions about the trade-off between value and volume in the marketplace in line with our strategy.

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Lisa Hortense Maria De Neve, Morgan Stanley, Research Division - Equity Analyst [33]

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Okay. So you're actually saying that -- sorry, on the first question. So the change in inventories is mainly due by the fact that it's higher earned produced inventories rather than third-party inventories. Is that correct?

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Lars Røsæg, Yara International ASA - Executive VP & CFO [34]

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Yes. Yes.

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Operator [35]

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And your next question...

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Lars Røsæg, Yara International ASA - Executive VP & CFO [36]

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Sorry. There's was a follow-up, operator, to that question.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [37]

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And I think it was a question on prices, whether this was only NPK or also in other areas. I think if you look at Page 5, you will also see that the realized price on nitrates is clearly up from a year ago, as is our NPK. So I would basically say that all our nitrate-based products generally have had a good margin increase. Also in the falling nitrogen markets, we tend to get premium on the more differentiated urea products that we have, like urea [processed]. So generally, we have been able to have a lift in our margin on most of our premium products.

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Thor Giæver, Yara International ASA - Head of IR [38]

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And Lisa, this is Thor. Just to add, just be aware that when you're looking at the sales and marketing results in isolation, that's kind of the flow-through external factor here, which is, as Terje describes, higher realized prices relative to most of the reference. But there's also an internal pricing element because when the production segment sells to sales and marketing, it's at a fixed premium so that if you like the variation in the premiums, it goes to sales and marketing.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [39]

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And it's also an element here of the higher-value products like the growth in YaraVita, which brings a quite interesting margin element. Although volume-wise, it is a small product.

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Operator [40]

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And the next one comes from the line of Chetan Udeshi.

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Chetan Udeshi, JP Morgan Chase & Co, Research Division - Research Analyst [41]

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A couple of questions from my side. First is just going back to the discussion on NPK compound. Is it fair of you to assume that given the decline in potassium and phosphate pricing, you'll benefit from that in the short term given that your NPK prices on the compound side tend to be more sticky, I guess? And is there a way you can quantify that impact at all in the next few quarters? If possible, maybe it would be easier if you could give us how much potash and phosphate you buy from third-party suppliers annually. Maybe that might be useful.

Second question is on your committed growth, I'm struggling to see where is that visible in the numbers in the third quarter because if I look at your overall deliveries are down. You said it's value over volume strategy. But even the premium deliveries, when I look at Q3 versus last year, it's essentially flat. So maybe can you help us understand where is the benefit from the committed growth programs visible in the third quarter?

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [42]

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Yes. So on NPK, I think we have commented in the sense that we are in segments that are less exposed to the commodity nutrient side. We have also said that we have balanced value versus volume, so we have, to some extent, prioritized to get out value. But it's also important to say that obviously, over time, there is a price correlation. And over time, I think we will see that we are able to continuously take out the margins that we typically have seen.

There is, for us, short term an advantage when P and K is dropping in the sense that we can to be able to extract more of a fixed price policy, if you like, in periods where the commodities, the underlying commodities are dropping. So it depends a bit on how the development, the further development of P and K, whether we will choose to adjust and maybe use that as an element to take back some volume or whether we hold price and we'd see that we can go through this period of decline in P and K. That really depends a bit now on the continuation of the P and K market.

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Thor Giæver, Yara International ASA - Head of IR [43]

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Okay. And Chetan, this is Thor. I'll try to answer your second question. I think the first is a disclaimer in that I think when you're looking at an individual quarter, you will be normally more impacted by your sales rate and how the markets -- what volumes the market can absorb that quarter. And it's not -- I would say given the flexibility we will normally have on inventory, it's not normally whether an individual growth project has started up or not that impacts what you sell in a quarter.

But having said that, I think when you look at our -- for example, on Slide 4 in the presentation, we have increased NPK sales because we have been expanding our NPK plant. So you can make the link there. We also have some urea expansions. We have higher urea sales. And on nitrates, it's down a bit. But as we mentioned in the presentations, third quarter last year was a record quarter. So I think there, we sold more than we produced.

Our -- we will -- we recognize the kind of need to make this link more strongly, and I think you can expect us to do that, in particular, in connection with the full year results. So that's probably about what we can say right now.

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Operator [44]

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And the next question comes from the line of [Christian Schlimm].

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Unidentified Analyst, [45]

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Two questions from my side. The first one is the dividends from associates, I noticed they were flat, broadly flat on a 9-month basis, whilst your own EBITDA is sharply up. I'm not aware of an investment project at Qafco. So could you maybe explain why distribution hasn't gone up?

And the second thing is I'm missing a bit in the regional market comments. Any color on North American market? You have deemphasized reporting a bit on the U.S. market, so any input on season-to-date deliveries and imports, et cetera, would be helpful.

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [46]

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I can take it.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [47]

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Sorry. Go ahead.

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [48]

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No. Well, Terje kind of maybe comment on our position with. We've been very, very plain, and Canada can -- might be a bit different than the top North American market. But as we -- it's probably with the expansions in North America and the fact that we don't really know how much nitrogen they have produced until, let's say, 5 months after the end of the quarter, and if I announce their numbers, of course, we follow trade and so on, we follow imports and exports. And so far, let's say, in the -- for the 2 months this is -- that is reported, July and August, imports of nitrogen is roughly similar to same period last year. But that grounds in the -- in what was produced and then those numbers are not public yet, so we don't feel like there's any point in kind of -- for us to make kind of short-term comments on the development in our North American market when it would be so much guesswork.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [49]

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Yes. And this is Lars. On the other question, if I look then to our notes on Page 14 of the report, the dividends from equity accounted investees are indeed in line with last year of 97 million this year versus 98 million last year.

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Unidentified Analyst, [50]

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Yes. And why is that?

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Thor Giæver, Yara International ASA - Head of IR [51]

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Well, yes, could you please maybe repeat the question, Christian, because...

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Unidentified Analyst, [52]

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Yes. I mean I'm wondering why that is given that everywhere else, you're posting profit increases, and we don't see -- it doesn't seem to be reflected at Qafco. So is there any other things going on offsetting that or...

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [53]

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I think that's, of course, they're quite -- Qafco's business is quite different to Yara's business overall. So where we are kind of mainly exposed to the urea price and producing and selling about the same as they did last year, Yara has, of course, many other products, many other markets, which in sum have improved. And for example, the European gas situation has been a big positive for us and has not impacted us. So I don't know if others would add to that, but that is the difference.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [54]

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Yes. I think I can also add to that, that the share of net income and equity accounted in this piece is also indeed in line with last year of $52 million this year versus $54 million last year.

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [55]

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And the 1-month urea price is basically the same.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [56]

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Yes. So again, if you look at Page 5, you'll see that there, we are using FOB Egypt, but it's particularly exactly the same. And given that gas cost probably is pretty stable as well in Qatar, it is to be expected that the number is pretty much the same.

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Operator [57]

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And we'll now take our next question, and this comes from the line of Eivind Sars.

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Eivind Sars Veddeng, DNB Markets, Research Division - Analyst [58]

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It's Eivind from DNB. Just 2 questions, one on the gas forecast for Q4. In Q2, you said you have $160 million expected benefit in Q4. You repeat that now in Q3. However, looking at the details in your slide pack, it seems like the underlying gas price assumption for Europe is roughly $1 or $0.88 lower. What's driving that, please?

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Thor Giæver, Yara International ASA - Head of IR [59]

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Eivind, I think that's one where we'll probably need to follow up separately.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [60]

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Yes. Because like I said, the amounts we specify each quarter are just mechanically following our sensitivities on the forward price. But we're happy to follow up with that separately to clarify.

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Eivind Sars Veddeng, DNB Markets, Research Division - Analyst [61]

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Okay. Second question is on the market side in Europe. We have heard a lot of press releases and talks lately about Romania restarting up to 1.5 million tonnes. To my knowledge, these are assets that have been curtailed for more than 5 years. Have you seen any increased sales from Romania? Or what's your thoughts on these restarts?

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Dag Tore Mo, Yara International ASA - Head of Market Intelligence [62]

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Yes. No, I mean in January, I think you understand -- can understand the logic when gas -- the way gas prices in Europe has collapsed that people are looking at are there something that they can -- way of exploiting this. And okay, here we are. There are some more -- some plants that have been down for some years. Can they try to get them back into production? I guess that's a logical thing. A little bit too early yet to say how successful it will be in the end. As you said, they have been all down for many years. And sometimes, there are -- you don't just find, let's say, skilled labor and so forth easily. So that's, of course, not -- that's never easy, to put it that way. So -- but that's right. There are ongoing efforts.

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Terje Knutsen, Yara International ASA - EVP of Sales & Marketing [63]

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And then when it comes to the Yara side of that, we haven't seen much movement yet. We, as we always do, we balance out globally our position, and we play with the stock position we have, and we play with the overseas opportunities we have to try to balance out the market as best as we can. And that's also what we are doing presently.

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Operator [64]

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No further questions that came through at this time, sir. Please continue.

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Lars Røsæg, Yara International ASA - Executive VP & CFO [65]

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Okay. Then, I think, thank you to everyone for participating and look forward to keeping in touch and watching the market and results develop. Thank you. Bye.

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Operator [66]

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Thank you. That concludes our conference for today. Thank you all for participating. You may now disconnect. Speakers, please standby.