Yara earnings declined in the third quarter of 2026 as higher European gas costs, delayed fertilizer purchases and production disruptions weighed on profitability. Results announced on October 22 showed EBITDA excluding special items of $675 million, down from $804 million a year earlier, even as the company’s rolling return on invested capital improved.
Key Takeaways
- EBITDA excluding special items fell 16% year over year, while net income declined to $199 million.
- Stronger European nitrogen deliveries contrasted with weak NPK demand, particularly in Latin America.
- Yara maintained its improvement targets, while the Gulf Coast Ammonia acquisition remained subject to closing conditions.
Table of Contents
- Yara earnings show weaker quarterly profit but higher returns
- Gas costs drive selective ammonia curtailments
- European deliveries improve despite delayed seasonal buying
- Improvement targets and acquisition remain forward-looking
- Conclusion
Yara earnings show weaker quarterly profit but higher returns
Yara’s third-quarter results announcement showed net income of $199 million, compared with $320 million in the same period of 2025. Earnings per share fell to $0.95 from $1.33, while EBITDA excluding special items declined by $129 million.
The quarterly deterioration contrasted with stronger longer-term measures. Return on invested capital reached 13.5% on a rolling 12-month basis, versus 8% a year earlier. Year-to-date earnings per share rose 31% to $4.26. Those figures cover different periods from the quarterly results and do not indicate that third-quarter profitability improved.
Lower volumes had a $40 million negative effect on quarterly EBITDA. Yara attributed the pressure to slow demand, especially for compound NPK fertilizers in Latin America, and plant-specific reliability problems.
| Item | Details |
|---|---|
| Quarterly EPS | $0.95 in Q3 2026 versus $1.33 in Q3 2025 |
| Year-to-date EPS | $4.26, up 31% versus 2025 |
| Fixed costs | Up $4 million year over year, excluding currency effects; $14 million below the inflation-adjusted comparison |
| Free cash flow | On par with the prior year, supported by lower operating-capital buildup and reduced inventories |
Gas costs drive selective ammonia curtailments
European ammonia margins turned negative toward the end of the quarter. Management said Yara was curtailing production at an annualized rate of 270,000 tons and could curtail up to 1 million tons annually when producing ammonia was uneconomic.
That does not mean all European fertilizer production faced the same economics. CFO Magnus Ankarstrand said the gas-to-nitrates spread remained positive, allowing Yara to import ammonia and keep nitrate production running while reducing loss-making ammonia output.
The distinction matters for interpreting energy exposure: lower ammonia production can avoid uneconomic costs, but the benefit is a margin effect rather than a straightforward addition to earnings. Yara continued to adjust production and product flows across its global network.
European deliveries improve despite delayed seasonal buying
Yara’s nitrogen deliveries in core European markets increased 4% year over year, against an estimated market contraction of 5%–10%. European nitrate deliveries were ahead of the prior year, and the company ended the quarter with a stronger-than-normal European order book.
Demand was less supportive elsewhere. NPK deliveries slowed, particularly in Latin America, while industrial volumes declined mainly because assets had been placed into hibernation under the portfolio plan.
Purchasing for the 2027 season remained significantly behind previous years across key markets. Management expected improved affordability and crop prices to support demand, but declined to provide fourth-quarter volume guidance. Delayed buying therefore remained an uncertainty, not a confirmed future sales recovery.
Improvement targets and acquisition remain forward-looking
Yara maintained EBITDA improvement targets of $200 million by the end of 2027 and $350 million by the end of 2030. Management said production increases and debottlenecking account for much of the remaining work, with reliability setbacks delaying progress and most remaining benefits toward the 2027 target expected late that year.
The planned Gulf Coast Ammonia acquisition would further diversify gas exposure upon closing, bringing close to 40% of gas purchases onto Henry Hub or Canadian gas references. Management hoped to close in the fourth quarter, subject to regulatory approval and other customary conditions; the earnings contribution would begin only at closing.
Conclusion
The next milestones for Yara earnings are fourth-quarter seasonal buying, production reliability and the pending Gulf Coast Ammonia closing. The acquisition’s timing remains conditional, while delayed fertilizer purchases have yet to translate into confirmed delivery growth.
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