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Yara’s production volumes and deliveries suffered from the curtailed European production, but the extraordinary market situation still allowed for good margins albeit not extraordinary. The situation in the gas markets seems to have peaked as the company guidance is for lower, but still extremely high spot prices.
Yara’s Q3 figures were a consensus-beating surprise (sales: +17.5%; adjusted EBITDA: +37.6%). Another positive catalyst is the lower-than- previously-anticipated gas costs (USD540m v
Companies: YARA INTERNATIONAL (YAR:STO)Yara International ASA (YAR:OSL)
Yara reported consensus-beating Q2 sales (beat to consensus: +1.7%) and profitability figures (operating income: +9.5%). The strong profitability increase was mainly fostered by the higher sales prices as production volumes suffered from lower ammonia production. Once again, management guided for higher gas prices, based on the crucial assumption of if it is available, especially in Europe.
Reported figures broadly confirmed our view on the company, but it is a bet on quite normal gas flows in
Companies: Yara International ASA (0O7D:LON)Yara International ASA (YAR:OSL)
Yara’s very profitable start came on the back of significant price increases, whereas sales volumes were subdued due to farmers’ reluctance to buy expensive fertilizer. The situation might have eased had Gazprom not announced that it was stopping gas transport to some European countries. This might additionally tighten the European nitrogen market helping Yara to cope with higher gas costs.
The reported figures slightly missed consensus expectations for the top line (-1.2%), whereas operating
Yara’s FY figures were strong, but EBITDA followed the top line more distantly than expected (miss to consensus top line: -2.4%; EBITDA: -11%). EBITDA’s +26% increase was held back by skyrocketing gas prices as well as by higher impairments. On a quarterly adjusted basis, the picture looks more favourable as higher sales prices outweighed the extremely high energy costs in Q4.
In our view, 2022 will be quite a profitable year despite the to-be-expected declining gas prices, if the Russia-Ukrai
Yara did better than the street had expected (top line: +5.1%; EBITDA: +2.5%), but that was the past. Central questions in today’s call were around the impact of the currently ongoing curtailment of its European production capacities and farmers’ willingness to accept continuously increasing prices. Management remained quite vague in this regard due to its conservatism, but clearly flagged that nitrogen is crucial for farmers to produce certain yields.
Yara and CF Industries, two leading ammonia producers, have announced they are to curtail quite a high share of their European production. This comes after the soaring gas prices, which can not be passed on to the farmers. The lower European production comes with the impact of Hurricane Ida. The heavy winds had caused severe damage and sudden shutdowns in the Mexican Gulf region, so the global supply balance has been hit. It looks to us as if this is becoming another perfect storm.
Yara reported a strong set of figures primarily driven by the implemented higher sales prices beating our cautious expectations, whereas consensus was more moderately beaten (top-line: 6; profitability: +2). In our view, the price increases overcompensated for the higher energy costs and weighed on volumes. However, the times of increasing prices is not over as management guides for higher forward prices until the year-end.
The world lusts for nitrogen-containing fertilisers as availability dominates pricing negotiations with ammonia prices flying up since the beginning of Q1. Being part of the story, Yara was one of the beneficiaries despite volume’s tiny performance. The higher sales prices could be introduced also because of the sharp (!) increase in natural gas prices yoy and sequentially. Our not too ambitious expectations were beaten, especially on the profitability level, but consensus was missed on all line
Yara reported a good set of figures, beating our more moderate view in 2020 as we has factored in a stronger negative from higher energy prices. The latter has been counteracted by higher volumes and better pricing momentum in Q4. In the light of the fading effect from low energy prices, the provided outlook and already signed contracts will help profitability to be maintained in the first months of 2021, at a minimum.
Consensus was not met.
Companies: Yara International ASA
Yara will release its Q4 results on 9 February, and we expect an EBITDA (Yara definition) of USD 495m (499). We have implemented firmer European gas prices and updated FX assumptions, representing headwind for earnings. This has been partly offset by higher price assumptions. Following our estimate revisions, we see limited scope for raising our NOK TP, and we hence downgrade the stock to Hold (Buy).
Targets new USD 300-600m EBITDA by 2025
2020-21 CapEx unchanged, 2022 higher than expected
Unchanged financial targets
Plans for 500’t green ammonia plant in Norway
Yara reported an EBITDA (Yara def.) ex special items of USD 558m – in line with our expectations. The board proposed an extraordinary dividend of NOK 18 per share, reflecting the Qafco divestment and to be paid in Q4/20. We have kept our price assumptions unchanged in this update, and consequently, we have only fine-tuned our estimates. We still expect share buy-backs and EO dividends will provide downside support, and we reiterate our BUY rating and TP.
... Yara lifted FCF as well as ROIC to new levels. Operating figures were impacted by various effects, the most dominant one being lower sales prices. The impact of lower energy prices started to level out earlier than expected. This was not well explained as management shared future gas prices. Incidentally, AlphaValue had removed the share from the active portfolio just some days ago as investors had bought more into risk.
EBITDA (Yara def.) ex of USD 558m (Arctic: USD 541m, Cons.: USD 656m)
Proposes an additional NOK 18 per share in extraordinary dividend
Energy cost guiding broadly in line with expectations
Minor estimate changes expected, but EO dividend supportive
Yara will release its Q3/20 results on Tuesday 20 October. We have revised our Q3/20 estimates lower, mainly due to a stronger NOK as well as a weaker than previously expected CAN price. We have only fine-tuned our estimates for Q4/20 onwards, and stick to our Buy rating as well as our NOK 400 TP. The buy-back programme as well as extraordinary dividends should provide downside support, but an improved market balance is needed in order to raise our TP further.
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Strix has issued a trading update today following a disrupted period due to China’s continued Zero Covid policy approach and ongoing macro uncertainty. This has so far restricted business activity for two of Strix’s top five major OEM customers, with further disruption expected. Revenues for the full year will be below initial expectations whilst profitability is impacted more heavily due to the operational gearing in the business. These difficult market conditions see Zeus full year revenue for
Companies: Strix Group PLC
Invinity has announced a record new order, for 15MWh of its vanadium flow batteries (VFB) for Everdura Technology in Taiwan with 255MWh of follow-on-order potential. This marks Invinity's sixth announced sale this year and its fifth in 2H22. For the YtD that brings total firm orders to 37.7MWh, almost 3.5x the previous annual record. The evidence continues to mount that Invinity has a commercially competitive product, yet it trades at well under half the market capitalisation to book value accor
Companies: Invinity Energy Systems PLC
Calima Energy (CE1 AU)C; Target price of A$0.60 per share: Market cap paid back in 2 years, even after incorporating higher differentials - Four wells out of the five well 4Q22 programme have now been drilled with two wells already in production. Gemini#10 is producing in line with the type curve (IP of 120 boe/d gross and 60 boe/d net to Calima 50% WI). Gemini #11 was put into production on 24 November while Gemini#12 will be brought
Companies: PEN TCFF ALV CE1 HHR ALV RHC RHC SOU EOG ENQ ZPHR IOG PMG NOG SDX CHAR PEN
Companies: Yu Group PLC
Invinity have announced their largest single battery sale to date through a 15MWh contract with Taiwanese industrial technology company Everdura. This comes on the back of another recent deal in the Taiwanese market, as well as notable sales in the US and Europe. We see sales momentum for Invinity’s flow battery accelerating as renewable penetration increases creating urgency for proven, low-cost, safe Long Duration Energy Storage (LDES) technology.
Positive interims, with LFL revenue growth of 9.3%, adjusted EBITDA growth of 45.7%, a 5% increase in the dividend and an in-line outlook statement. There is clearly added uncertainty going into 2023, the diversity of both its product base and customers means it remains in a good position. The share price has behaved more like a housebuilder and in our view, this fails to reflect the diversity of its model and the fact that the group's earnings continue to rise. On revised forecasts the shares t
Companies: Brickability Group PLC
Companies: SThree plc
Invinity has announced a further sale of its vanadium flow batteries (VFB), this one comprising 2.2MWh of its VS3 model. The purchaser is Bei Ying International Corporation, a Taiwanese industrial equipment wholesaler which is acting as a reseller for Invinity. This brings total sales announced since the interims to 14.3MWh and to 22.7MWh for the year to date. Given the run rate, we believe there is a high likelihood of further sales before year end, confirming solid demand for Invinity's VS3 pr
Changes in planning policy in Scotland create risk and a potential delay to Powerhouse’s second UK project but could result in a more stable planning environment in the longer run if it creates a positive test case for the company’s low carbon waste-to-hydrogen technology.
Companies: Powerhouse Energy Group PLC
Dish of the day
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What’s cooking in the IPO kitchen?**
Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.
AT85 Global Mid-Market Infrastr
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Companies: Atome Energy PLC
DX Group has reported strong full year earnings; we reinstate our estimates and valuation following the relisting of the shares in October. Trading has been resilient despite widely reported, but now resolved, corporate governance issues. Growth was healthy in DX Freight driven by the 1-Man delivery service, and with higher parcel revenues in DX Express. Current trading is reportedly in-line with expectations, and the medium-term operating margin target of 7.5%-10.0% (FY22a: 5.8%) has been reite
Companies: DX (Group) Plc
Dish of the day
BWP REIT joins the Wholesale Segment of the International Property Securities Exchange (IPSX). BWP REIT is a newly formed single asset company and has raised £35m by issuing 35m new ordinary shares at 100 pence per share to acquire Bridgewater Place, an office-led mixed use property in central Leeds and valued at £63m. The property is one of the tallest buildings in Yorkshire, comprising 234,000 sq. ft of office space, and is close to 90% let to EY, as well as multinatio
Companies: RNO BEM BOIL DOTD NTQ KMK PMG EYE EVG ENET
Energy from biomass or waste can be genuinely low carbon and sustainable, representing a major tool in the decarbonisation toolbox. The ability to add carbon capture technology creates an immediately available negative emissions solution and adding liquid fuels allows the decarbonisation of sectors previously seen as challenging. Demand for all these solutions is likely to grow as decarbonisation and energy security become essential requirements in the energy mix.
Companies: VLS DRX PHE EQT
Companies: RNO DOTD NTQ KMK PMG EVG