Yara International, the Norway-headquartered fertiliser maker, announced its profits dropped to $1.71bn (€1.59bn) in 2023, down from $4.96bn (€4.6bn) in 2022.
The drop in profit was on a turnover that dropped 40% to $15.5bn.
Yara reported that its weighted average cost for European gas dropped from $31.8/one million British thermal units (MMBtu) in 2022 to $14.9/ MMBtu in 2023.
However, the company said that lower prices and subdued demand more than offset the decline in energy costs in the year.
The drop in demand led Yara to curtail 11% of its European capacity of both finished fertilisers and ammonia capacity in the fourth quarter.
On a full-year basis, deliveries in Europe increased by 3% when compared with 2022, but dropped 8% in the Americas, with Brazil down 13%. Yara said that deliveries to China were “impacted from Chinese domestic prices being decoupled from global prices” in the year.
The fertiliser maker said that production curtailments in Europe are “frequently adjusted according the market conditions”.
The company said that the start of this year has seen increased buying activity and higher prices, which may indicate a catch-up in volumes after a very slow start to the season both in Europe and the US.
Looking at the longer term, Yara said that the period of increasing global urea capacity “is now behind us” and that projections show that future supply growth is well below trend consumption growth from 2024 and beyond.
The historically low number of new projects under construction indicates a tightening supply-demand balance in the coming years.