As farmers globally struggled with the cost of fertiliser in 2022, the fertiliser supply chain delivered strong profits.

Yara delivered improved returns for the 2022 half year, citing strong performance from overseas assets. Yara’s results, published last week, show that second-quarter operating income was US$1,223m compared with US$477m a year earlier.

Yara saw substantial underlying increases in EBITDA, earnings per share and return on invested capital in the second quarter of 2022. Yara experienced a net US$900 improvement in margin, despite gas cost increases amounting to more than US$1bn in the second quarter versus the same period last year.

“Our business model continues to perform well as we continue to deliver improved returns in volatile market conditions.

“Overseas assets delivered particularly strong performance with our Americas, Africa and Asia segments accounting for approximately 55% of our EBITDA this quarter,” said Svein Tore Holsether, CEO of Yara.

Higher prices and margins including increased risk premiums to cover production cost exposure due to higher priced gas in Europe were delivered.

Strong returns mean Yara has increased capacity to deliver cash to shareholders, according to the CEO.

The CEO also noted there is a clear risk of nitrogen shortages and further price spikes if the natural gas situation in Europe deteriorates further. However, despite a recent correction in grain prices, farmer profitability remains high.