Yara International ASA

Strong profitability, but margins pressured by gas + volumes - Q3 EBITDA (ex. special items): USD 675m, vs USD 804m in Q3’25 (down YoY). - Q3 EPS: $0.95/share (vs $1.33 last year); YTD EPS: $4.26/share (+31%). - Return on invested capital (12-month): 13.5% (vs 8% a year ago) — management notes this includes EUA sales effects. - European ammonia margins turned negative toward end of Q3 due to higher European gas costs, more than offsetting higher nitrogen prices. - Negative volume impact: USD ~40m in the quarter (NPK demand softness in Latin America + plant reliability issues + turnaround spillover).

Operational self-help: curtailment + cost discipline, but reliability is the key drag - Yara curtailed European ammonia (ammonia flexibility) because TTF-to-ammonia cash spreads were negative, keeping only what’s needed for upgraded nitrogen products. - Management says curtailment capability is up to ~1 million tonnes per year of European ammonia; current run rate cited at ~270,000 tonnes. - Cost discipline: Fixed costs up only USD 4m YoY (ex. FX); beat inflation by ~USD 14m in Q3. - Improvement program: USD 60m delivered so far in 2026, on track toward targets (USD 200m EBITDA uplift by 2027; USD 350m by 2030). - Challenge (bad): reliability issues constrained production and realization of debottlenecking benefits: - Noted contributors: Pilbara ammonia outage (Q2 spillover) and Sluiskil nitrate issues; also sulfuric acid issues in Finland.

Demand outlook: delayed buying in Europe; uncertain Northern Hemisphere balance - Europe saw nitrate deliveries up despite a ~5–10% industry market contraction (estimate at the time). - Order book intake in Europe increased significantly through the quarter → suggesting buying may be returning toward a “more normal” pattern, but Northern Hemisphere buying is still delayed vs normal. - Latin America NPK demand remained weak → contributed to the negative volume impact. - Surprising/market-moving factor: Middle East disruption led to a ~20% supply reduction (urea/phosphate), with demand destruction occurring after much of NH season buying was already done → feedstock/import effects visible into the next season.