Pre-quarter information, sensitivities and capacities

Pre-quarter information packages

Yara publishes a pre-quarter information package, ensuring that all externally available information relevant to model the upcoming quarter is accessible to all at the same time under Reports and presentations. The pre-quarter package is published the day Yara enters quiet period and Yara does not offer pre-quarter calls. Yara does not provide guidance on total financial results but may communicate guidance and / or targets for discrete activity areas.

In the pre-quarter information package, Yara discloses its outside-in model, which estimates a quarter EBITDA based on development of key market prices and Yara’s published sensitivities. The outside-in model does not include any further quarter-specific adjustments, whether volume impacts or others. However, the pre-quarter package includes key considerations for the relevant quarter that have previously been disclosed or are considered public information, followed by a written Q&A.

The pre-quarter package and outside-in model should not be seen as guiding of financial results, as actual results may differ due to both internal and external factors.  

Sensitivity assumptions

The key market drivers for Yara’s financial results are gas prices on the cost side and nitrogen prices on the revenue side, in addition to exchange rate development of Yara’s key currency rate exposures.

Yara’s sensitivities are based on production capacities as stated in the capacity table below, assuming a 90% utilization rate to reflect regular maintenance across the portfolio. Sensitivities assume no inter-correlation between factors. EPS sensitivities are based on 254.7 million shares and assume 25% marginal tax rate on underlying business.

From January 1, 2026, Carbon Border Adjustment Mechanism (CBAM) was implemented in the EU. A carbon tax on deliveries in Europe will be reflected in prices and European prices will therefore be at an increasing premium to global nitrogen prices reflecting the gradual phase in of carbon costs.

Yara delivers product both in and outside of Europe. The updated 2026-sensitivities mirrors this split, reflecting the de-coupling of European prices from global prices. This split is based on historical deliveries which could deviate from future deliveries.

European deliveries are split into urea and nitrates as the European market has liquid price references for both urea and nitrate-based fertilizers. For Yara’s nitrogen deliveries outside of Europe, urea, CAN and NPK are converted into urea equivalents and linked to one global urea price reference.

The currency sensitivities assume that revenues and raw material costs are USD-driven while fixed costs are exposed to local currencies at the locations where we operate.

The European and North American hub gas sensitivities are based on our gas consumption in Europe and North America that is linked to hub pricing.

How to use the sensitivities

The sensitivities are based on Yara's capacity and assume a utilization of 90%. If sales differ from this assumption, the estimated effects using the sensitivities can be misleading. This is especially relevant when using the sensitivities on quarters when sales volumes, for various reasons, differ from both actual production and the stated capacity. Other factors such as realized prices or margins, changes in time lags between production and delivery may also lead to deviations between the effect estimated by using the sensitivities and actual financial results. Yara does not provide guidance on total financial results.

There is an average time lag of approximately two months before changes in spot gas prices affect our margins. For quarterly estimates, Yara recommends using the latest gas cost guiding provided for the two upcoming quarters. The average time lag for nitrogen prices to affect our margins will typically vary between 0,5-2 months depending on product, geographies and time of the season. Yara generally recommends using an average of 1 month lag for nitrogen prices.  

Other elements impacting Yara’s earnings

Sensitivities do not include changes in the NPK premium. Yara's compound NPKs are typically sold at a premium above a commodity blend and is an important element of Yara’s earnings and a key driver of earnings resilience. Compound NPK prices are typically less volatile than global commodity prices. There are limited market reference prices for compound NPKs available, meaning that estimating quarter impacts of NPK premiums cannot be done precisely. The actual impact of premiums is disclosed in the quarterly reports by comparing a commodity blend to Yara’s realized NPK prices for the period.

In addition to upgrading activities from gas to nitrogen, Yara’s production of compound NPKs includes upgrading activities from phosphate rock to phosphate fertilizers. Yara’s cost exposure of producing phosphate is a mix of own mining activities (~ 2/3 of p-rock demand) and external sourcing of phosphate rock (~1/3 of p-rock demand), in addition to sourcing sulphur for parts of Yara’s NPK production. Phosphate upgrading margins are a key driver to Yara’s earnings and will vary mostly with DAP prices given that only part of the cost exposure is linked to market prices for phosphate rock and sulphur. Due to the long lead time from sourcing of raw materials to delivering compound NPKs (3-5 months), estimating the impact for a specific quarter is challenging. Observation of the development of phosphate rock (applicable for ~ 0.6mt P₂O₅ per year) and sulphur prices (applicable for ~ 0.3mt sulphur per year) compared to phosphate fertilizer prices (applicable for ~1.2mt DAP per year) may provide a directional impact on a quarter’s earnings.

As free allowances under EU ETS are phased out and CBAM is phased in, the carbon cost for European producers and importers will gradually increase from 2026-2034. Yara has accumulated a surplus of EU ETS quotas, which means that Yara will not recognize any cost impact of EU ETS quotas in the income statement until this surplus has been fully withdrawn, currently expected around 2030. As Yara imports ammonia to its European production system, Yara will also face a carbon cost on its imported ammonia to the European production system. However, by utilizing mechanisms such as inward processing, this is not considered to be financially material for the coming years and as such CBAM cost exposure is neither included in the sensitivities.