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US diesel prices reached a record high this week, passing $6 a gallon for the first time. This matters for Yara because energy is a primary cost in producing and moving fertilizer around the world.
While natural gas is the main ingredient for nitrogen fertilizer, high diesel prices increase the cost of shipping products to farmers. If these costs stay high, they could eat into profits or force the company to raise prices, which might lower demand from farmers already facing tight budgets.
Source: Bloomberg Markets and Finance
Yara opened a new facility on Monday that captures carbon dioxide emissions before they reach the atmosphere. This is currently the largest site of its kind in Europe.
This move is part of a plan to turn traditional fertilizer making into a cleaner business. By capturing emissions, Yara can produce low-carbon ammonia, which is increasingly in demand as a clean fuel for ships and factories. It also helps the company stay ahead of stricter environmental rules in Europe that could otherwise lead to expensive fines or taxes.
Source: Reuters
Management has a history of clearing the bar they set, but the business is prone to sudden swings that make their forecasts difficult to rely on for long-term planning.
| Expectation | |
|---|---|
| EPS | $0.75 |
| Revenue | $4.52B |