Oslo | Reuters –– Norwegian fertilizer maker Yara plans to cut operating costs and raise investments to become more competitive and grow its business, it said in an update ahead of an investor meeting on Tuesday.
The company raised its estimate for 2016 capital expenditure to 17.9 billion Norwegian crowns (C$2.8 billion) from previous guidance of 14.5 billion, and predicted a decline to 10 billion in 2017 and seven billion the following year.
In 2015, Yara’s capital expenditure was 14.4 billion.
“We believe growth is key to creating further shareholder value, and sustaining and growing our competitive edge. Also, improving our relative cost position and productivity is a key priority,” CEO Svein Tore Holsether said in a statement.
“During the next six months we will establish a corporate improvement program, consisting of several initiatives aimed at reducing cost and increasing efficiency,” it added, without elaborating.
Yara’s Canadian holdings include Yara Belle Plaine — the former Saskferco nitrogen fertilizer plant at Belle Plaine, Sask., east of Moose Jaw — and a deep-water dry fertilizer terminal northeast of Montreal at Contrecoeur, Que.
Yara presented two main scenarios for its earnings per share, ranging from 35 Norwegian crowns in the first to 57 (C$8.84) in the second, and with the potential to add six to seven crowns per share by 2018 under the company’s growth plans.
Both were ahead of Yara’s reported earnings per share for 2015, which rose to 29.38 crowns (C$4.56) from 27.59 in 2014.
“The scenarios are not a prediction of future results, but are ‘what if’ examples based on selected fertilizer and energy price scenarios and Yara’s current business,” it added.
— Reporting for Reuters by Terje Solsvik.