Big fertiliser firms post good results
Big fertiliser firms post good results
FERTILISER giants Hydro Agri and Kemira have reported strong results for 2001 as better fertiliser prices boosted earnings.
Hydro Agris operating income hit 2.1bn Norwegian krone (£165m), 61% higher than in 2000. Its plant nutrition arm accounted for the bulk of that, at 1.75bn krone (£138m), a 77% increase on the year.
The volume of fertiliser delivered to Hydros core European markets fell 17%, due partly to advance orders which were included in 2000 results plus poor weather in spring 2001.
However, average prices for key nitrogen products used in Europe increased 10%. In the UK, prices rose about 7%, with nitrogen at £125/t last May compared with £116/t 12 months earlier.
Lower fixed costs also helped the bottom line. Hydro continued its Agri Turnaround programme, which took out 1.3m tonnes of capacity and 2500 jobs in 2000. Last year, a further 1100 jobs went. The whole process has saved the company almost 2.4bn krone (£190m) since 1998.
Kemiras operating income rose almost 50% to k49m (£30m) in 2001. It, too, was hit by slower spring sales, notably for nitrogen, with volumes for the year slipping 5%.
The price of natural gas – the vital feedstock for nitrogen raw material – was higher than 2000. But a plant closure in Holland helped reduce fixed costs.
Sales of specialist fertilisers rose sharply after Kemira took a majority holding in Lithuanian company UAB Kemira Lifosa.
Although UK prices have fallen a little this season, Hydros massive restructuring and the flexibility within Kemira and Terra to avoid amassing large stocks should help in their determination to maintain "modest profitability", said industry comnentator Roger Chesher. "The fertiliser industry is in no mood to revert to the loss-making decade of the 1990s." *