Hello, and welcome to Yara's second-quarter results presentation. The presentation today will be held by our CEO, Svein Tore Holsether; and CFO, Magnus Krogh Ankarstrand.

I would like to remind you that once the presentation is done, we will move straight into the Q&A session. I will come back with instructions on how to ask questions in the Q&A.

First, let's start the presentation. It's my pleasure to hand over to our CEO, Svein Tore Holsether.

Thank you, Maria. Good morning, good afternoon, and thank you for dialing into our second-quarter earnings call.

As always, I will start with our safety performance. In first quarter, we reported an increase in accidents, and this is also reflected in our second-quarter numbers.

This is something that I take very seriously, and we've been working diligently across the entire organization to continue emphasizing the importance of our safety culture. We had our annual safety day on April 28th, which engaged colleagues across the world to increase the awareness and the commitment to the Safe by Choice approach because we know how to improve safety.

I am pleased to see that we have seen improving numbers towards the end of the quarter and hope that we're able to continue to turn the negative trend that we've seen in the recent year. This is our license to operate.

Every accident is avoidable, and we will bring our TRI down to zero. Let's then look at the key elements for the quarter.

We report an EBITDA, excluding special items, of $906 million. That is an increase of 39% from last year, driven by increased margins.

In addition, we did sell a part of our surplus EUA quotas with a gain of $153 million, and that is a special item to our EBITDA. This is the highest quarterly EBITDA in the last decade except for 2022.

Return on invested capital is 14.3%, reflecting strong quarterly margins, further supported by sale of EUA quotas. While margins have been strong, continued market uncertainty impacted demand in off-season markets, particularly in the Northern Hemisphere.

As a result, demand was deferred to third quarter, and we report crop nutrition deliveries 17% below same quarter last year. Since late last week, we have, however, seen an uptick in buying activity again, with demand resurfacing and prices gradually moving upwards.

Earlier this month, we announced the acquisition of the Gulf Coast ammonia plant in Texas. The acquisition strengthens Yara's position on the global cost curve, enhances portfolio flexibility, and represents an important step in delivering on our strategic priorities.

Looking at the EBITDA variance for the quarter, the 39% increase compared to last year mainly reflects increased nitrogen margins. This is Yara's highest quarterly EBITDA since 2022, driven then by increased market margins, but also solid underlying finances.

Prices have increased, and this is more than offsetting higher gas cost. We do report a negative volume impact in the quarter of $240 million, and approximately half of this reflects lost volumes due to reliability issues in our Pilbara ammonia plant, and in addition to lost volumes due to the planned maintenance at our Belle Plaine plant.

On top of that, we report $120 million volume impact due to demand deferral, reflecting the 17% lower fertilizer volumes reported in the quarter. Fixed costs continue to reflect the cost reduction measures that we delivered on in 2025.

As presented at the Capital Markets Day, and a quarter increase then of $8 million, that is a strong beat of inflation for the quarter. Return on invested capital has increased from 7% last year to 14.3%, also supported by the $153 million gain from selling EUAs, which contributes to approximately 1 percentage point of return on invested capital.

The volatility in the quarter has had a profound and also unusual impact on the market dynamics. The closure of the Strait of Hormuz led to a supply shock, driving prices sharply upwards, and then peaking when India purchased 2.5 million tons of urea at over $900 per ton in April.

However, this occurred at a point in time when the European season was largely complete. The combination of high prices and significant volumes going into India and, among others, Australia meant that demand was reduced dramatically elsewhere in the world.

Simply put, customers and farmers who did not need nitrogen for prompt application delayed regular purchasing for the next season to avoid buying at peak prices. This market uncertainty led to a delay of the new season in Europe and also deferred demand elsewhere.

As the graph in our presentation here shows, there were large variations between regional price references, clearly illustrating the demand volatility across markets during the quarter. In recent days, demand for the new season has significantly resurfaced, and prices have rebounded in many key markets, with urea FOB Egypt prices increasing from around $410 per ton at the end of July, with the latest reported sale well above $500 US per ton.

This is reflecting increasing demand globally, and Europe now being willing to pre-buy for the next season again. Market to supply risk is also resurfacing now with an unresolved situation in the Middle East.

As mentioned already, Yara announced the acquisition of the Gulf Coast ammonia plant earlier this month, and this represents a significant milestone and largely fulfills our ammonia strategy. The acquisition will strengthen our ammonia cost position and enhance flexibility across our integrated production and distribution network.

The plant is located in Texas and will have a nameplate capacity of 1.3 million tons per year. Yara will own the ammonia plant, and Air Products will supply hydrogen, nitrogen, and utilities under a long-term agreement.

The purchase price of $1.3 billion will be paid upon closing and represents an attractive entry point into a highly competitive US ammonia production. The asset is expected to generate strong cash flows and deliver solid returns, fully aligned with Yara's disciplined and returns-focused capital allocation framework.

Bringing this plant into our portfolio really structurally improves our competitive position while also increasing our flexibility for ammonia optimization. The acquisition demonstrates how Yara can leverage our global platform, our market position, and operational flexibility to capture attractive opportunities and strengthen long-term value creation.

I will now then hand over to Magnus, who will take a closer look at the financials for the quarter. With that, over to you, Magnus.

Thank you. As mentioned by Svein Tore, EBITDA is up 39% on a strong second quarter 2025, predominantly driven by increased nitrogen operating margins.

This is translated into an 84% increase in earnings per share. We clearly see the effect of increased earnings on a stable capital base and better utilization of our installed capital is core to our improvement potential.

This also translates into a significant increase in return on invested capital, 14.3% for the last 12 months versus 7% at the same time last year. However, please also note that this number includes the sale of EUAs, which had a cash effect of $153 million US, which is classified as a special item.

Looking towards the cash side, the delayed start to the season as well as the increased price environment has led to a small buildup in operating capital compared to what is usually a release in the second quarter. This will subsequently be released when prices stabilize and volumes catch up.

This impacts cash from operations, which is lower than second quarter 2025, which benefited from a normal operating capital release. Finally, our net investments are down to $100 million US as the $152 million US divestment of parts of our surplus EUAs is booked here.

That leaves us with a free cash flow of the quarter of $583 million. As mentioned, the price surge in the second quarter came at a point where sales for the ongoing seasons in the Northern Hemisphere was at the very end.

Deliveries for the ongoing season went on as normal, but there has been a significant delay of the new season where deliveries usually pick up end of May. As Svein Tore mentioned, this is linked to low willingness to participate at elevated price levels for customers not in an immediate need of product, particularly when India purchased 2.5 million tons at more than $900 per ton of urea, significantly over market prices everywhere else.

Consequently, our deliveries are down, especially in Europe. The majority of other reduction of own-produced products is linked to the scheduled turnaround in Belle Plaine and Babrala.

Beyond that, we have a reduction in third-party traded volumes in the Americas and Africa-Asia, but these are volumes with more limited EBITDA impact. Looking closer at Europe and the season as a whole, we see that a much more stable picture than the tail end of the seasons.

Yara's deliveries in Europe for the season as a whole are stable on a season-to-date basis. Imports of urea to the European market, however, are also significantly down for the season, and this is a trend that has continued into the second quarter.

That increases Yara's relative market share considerably. As mentioned, Yara's Q2 deliveries in isolation reflect a slow start to the new season.

However, there is a significant pickup in marketing activity in European market in July, and as you will have noticed, global nitrogen prices are on the rise as well. Renewed tensions in the Middle East casts further uncertainty about nitrogen and phosphate availability for the third quarter and the upcoming season in the Northern Hemisphere.

While demand is deferred, Yara remains focused on maximizing and increasing the utilization of our assets. Looking at actual production tons and including the effect of turnarounds, Yara's had a solid organic production growth over the last years.

Also during the current volatility, Yara has been able to profitably uphold production, which is critical. The quarter in isolation saw some reduction in produced volumes due to the scheduled turnarounds in Belle Plaine and Babrala as well as a previously reported outage in Pilbara ammonia production.

Both Babrala and Belle Plaine are now back producing, while Pilbara has been taken offline in July for the scheduled maintenance. As the Strait of Hormuz was blocked in March, significant demand rationing was required to meet more than a 20% reduction in available nitrogen trade.

This was exacerbated by India's purchase of 2.5 million tons above $900 in April. This also is illustrated at the top of this slide, showing major reductions in imports to key consumption regions, with Europe and Brazil lagging the most.

Europe, of course, affected by the very strong imports in Q4 ahead of CBAM. Consequently, a lot of buying remains to happen.

Despite demand reduction in nitrogen application, application as a whole for the season cannot be skipped. The renewed tensions in the Middle East also adds uncertainty to the supply picture.

Chinese supply, currently quota being 3 million tons, will be a key factor to balance the market, and India consumption will also be another important factor to monitor. Looking to the medium term, the urea balance remains tight, with a limited number of projects coming over the next years compared to historical demand growth.

It remains unclear to what extent projects have been further delayed by the ongoing war in the Middle East. As mentioned, the significant increase in EBITDA in the quarter is driven by increased margins.

Looking at nitrates upgrading margins from both our TTF- and Henry Hub-linked gas cost exposure, margins have expanded significantly as nitrogen prices increased more than TTF, and Henry Hub stayed below $3 per MMBtu. A similar expansion in margin is seen in our NPKs, also helped by the phosphate upgrading margin.

This is particularly relevant for Yara as two-thirds of our NPK production does not require sulfur in the production process of upgrading phosphates. Sulfur shortage has been a major driver of phosphate price increases in the last two quarters.

This also erodes significant production margins for producers using the phosphoric acid route. As mentioned, Yara does not require sulfur for two-thirds of its production.

At the very high price levels during the quarter, premium calculations become less of a driver for our earnings, particularly given the high increase in overall margins. I recognize that this makes it challenging for analysts to forecast margins, particularly given that our sensitivities are based on global urea references.

For the current quarter, both the large gap between global and local references as well as premium being consumed by the production margin contributes to deviation between our outside-in model and reported results. Summarizing the quarter and the impact on the balance sheet, we see that net debt stays relatively stable despite the dividend payout in the quarter.

This is sustained by strong cash earnings as well as the $153 million US gain from the sale of EUAs. This puts our balance sheet in robust position in anticipation of the regulatory closing and subsequent payments of the Gulf Coast ammonia acquisition.

Looking to this acquisition, it is not only a major strategic milestone, but should provide clarity to the capital markets on Yara's approach towards ammonia, which has been in development for some time. With this acquisition, Yara achieves major strategic objectives in terms of lowering ammonia production costs with Henry Hub-linked gas and a larger production asset as a result.

The acquisition represents a very attractive entry point, with a CapEx significantly below other acquisitions in US Gulf when adjusting for size and operating cost. As previously mentioned, the plant consists only of the back end of an ammonia plant and is supplied with hydrogen and nitrogen and certain other utilities from Air Products.

Energy consumption is charged through directly, and this will be among the most energy-efficient plants in Yara's portfolio. For the hydrogen and the nitrogen, there is also a base fee paid to Air Products, as is normal in the industrial gas industry, also similar to the arrangement we have in our Freeport ammonia plant.

This replaces what would otherwise have been a construction CapEx of the front end of an ammonia plant as well as the sustaining CapEx and the fixed cost of operating a front end of an ammonia plant. As such, this ammonia plant is among the most competitive in the US, seen from a total cash flow perspective.

Also when looking at total cash costs per year, including the full operating cost, the plant is in the area of the first to second quartile on the cost curve. Post closing, this acquisition will have a significant impact on Yara's energy exposure.

Coming from a time before Freeport, when less than 15% of our gas purchases were in North America, our portfolio will now be close to 40% exposed to Henry Hub or AECO. Of the remaining European TTF exposure, half of the exposure is linked to nitrate production, where locally produced ammonia can be replaced by imports if the gas to ammonia spread is negative.

The acquisition also adds considerable length to our internal balance of ammonia between equity-owned production and own consumption, which allows even greater flexibility on further portfolio adjustments. This opens for adjusting the relative energy exposure further in favor of low-cost production.

On the topic of decarbonization, Yara remains strongly positioned in the carbon-taxed European market, also with this change of our portfolio. Firstly, because what the introduction of CBAM does is to expose imports to the same carbon costs as European-produced products.

This increases the price they have to take for their products of imports and levels the playing field. Yara's basis for carbon costs are average emissions intensity, and this is lower than the average of imports, leading to a margin gain for Yara.

This is not by coincidence, but due to structural investments in energy efficiency and emission reductions over time, which, irrespective of accumulated free quotas, have had a very short payback time. Yara can also increase this positive delta further by replacing gray ammonia productions with low-carbon ammonia imports and by reducing emissions further, like, for example, the CCS Sluiskil project.

For Yara's imports into Europe, we expect to utilize inward processing mechanisms for re-exporting finished fertilizer, significantly reducing our import exposure to CBAM. The financial benefit of having carbon intensity below benchmarks is illustrated by Yara's accumulated surplus of EUA quotas equaling 5.2 million by year-end 2025.

During the second quarter, we have divested 1.7 million of these, leading to a cash impact and gain of $153 million US, reported as a special item in this quarter. This illustrates the added value of previous projects that have been done, and also how we can monetize reduced emissions in projects like CCS Sluiskil as well as potential carbon reduction measures in our US plants.

Then moving to capital allocation, Yara maintains its policy after the Gulf Coast acquisition. Our overarching target is always to maximize returns to our shareholders through return on invested capital, and where this quarter is a big testimony to that.

Delivering on our improvement program is a first priority in achieving that. As previously mentioned, the GCA acquisition will also expand our EBIT margins further by significantly lowering our cost position.

Beyond that, Yara will maintain our strict capital discipline, focusing on reprioritizing sustaining CapEx towards the highest-return assets and ensuring realization of benefits from executed growth investments. Post closing of the acquisition, it will be a priority to maintain a strong balance sheet, ensuring that we have the capability for high-quality investment opportunities at the right timing, while, of course, maintaining attractive shareholder distributions.

Concluding, with the improvement program, the successful and continued implementation of our cost program and adaptation towards more flexibility puts Yara in a much stronger financial position than before 2024. The improvement program extends from our cost program, covering a broader range of initiatives, with a significant portion focused around increased asset utilization and expanded production output.

Additionally, ensuring cash flow delivered from completed growth investments, such as our YaraVita plant in the UK and NPK expansion in Colombia, are core focus areas. The program is in its early stages, but currently delivering according to plan, with $56 million US of the 2027 target realized so far.

Continued follow-up remains our core priority. With that, I give the word back to Svein Tore.

Thank you very much, Magnus. Looking beyond the quarter, then, Yara remains focused on strengthening long-term competitiveness and creating shareholder value through disciplined execution.

First, capital discipline remains the foundation of our approach. We continue to prioritize returns-focused capital allocation to execute on our EBITDA program and to maintain a robust balance sheet.

Second, we remain committed to high-quality, value-accretive growth. The Gulf Coast ammonia acquisition is a testament to how we allocate capital to opportunities that strengthen our competitive position while meeting very strict return requirements.

Finally, our approach to decarbonization remains unchanged. One of the strengths of our business model is that we have multiple pathways to profitable decarbonization, providing flexibility to optimize timing, risk, and returns as market conditions evolve.

This flexibility allows us to advance our climate ambitions while maintaining focus on competitiveness, capital discipline, and long-term value creation. To conclude today's presentation, Yara remains committed to continue to deliver sustainable cash flow expansion.

We continue to see positive traction from our cost reduction program that we concluded in 2025. As Magnus already mentioned, we are on track with our EBITDA improvement program.

Despite being below consensus in a very volatile quarter, the quarterly results represent a significant increase from last year, almost 40% up, and is one of the strongest quarter outside the record year in 2022. Strict resource prioritization and active portfolio management are key levers in strengthening Yara's competitiveness further.

With a strong balance sheet, capital discipline maintained, and a clear commitment to our credit rating, Yara is well-positioned to deliver sustainable, long-term value creation. With that, I'll hand back to Maria.

Thank you, Svein Tore. That concludes today's presentation.

We will now move to a Q&A session. If you wish to only listen to the Q&A, you can just remain in the webcast you're in now.

If you wish to ask questions, you can press the link under the webcast window to enter into the Teams meeting. We will just take a few minutes to set up, and then we will revert shortly.

Thank you for watching. Welcome back to everyone.

We're now ready for the Q&A session. This is Maria speaking, and I'm here joined by today's presenters, our CEO, Svein Tore Holsether, and our CFO, Magnus Krogh Ankarstrand, in addition to our Head of Market Intelligence, Dag Tore Mo.

For those that only want to listen in on the Q&A, you can just remain on the webcast page where you watched the presentation. If you wish to ask questions, you need to join the Teams meeting by pressing the link underneath the webcast window.

Once you are in the Teams meeting, please raise your hand if you wish to ask a question. If you're joining by phone and wish to ask a question, please press * followed by 5 to raise your hand, and then when it's your turn, you need to press * followed by 6 to unmute.

When it's your turn, I will introduce you by the name that pops up in the Teams meeting, and I will ask you to state your name and the company you're calling from. With that, we're ready for the first question.

David Symonds, please unmute and ask your question.

Morning. Thanks very much for the opportunity to ask questions.

Three questions, I think, from me, please. Magnus, you touched on it in your presentation, but the margin item in the bridge was 20% below the outside-in calculation.

I was hoping you could give some more color on where the shortfall was. Was there just a timing thing?

Secondly, in a similar vein, could you talk about the forward sales level for Q3 versus normal? Should we be shortening the pricing lags in our Q3 estimates given that volumes are seemingly picking up at a lower price level and that forward sales could be lower than usual?

Then, thirdly, could you talk about the motivation for the sale of the EUA credits? Is that linked to Sluiskil's carbon capture, which I think is starting up soon, or was there some other motivation for that?

Thanks.

Thank you. Had a little bit problem hearing your second question, but let's see if we can get back to that.

I think on the margin side and sort of the miss compared to the outside-in view, I think, obviously, this quarter there's more volatility on pricing, which, of course, makes deviations and misses easier. I think the main driver for this is also on the volume side, right?

That when volumes are sold, at which point in the quarter or even before the quarter. I think what sort of particularly makes it a bit difficult in this quarter when you had such a delay in particularly the buying for the new season is, of course, that the price references, as they're published, are published every week regardless of 50,000 tons were sold that week in the market or 1 million ton, right?

When you sort of average our volumes out on the price references, you can get a very different number. I think particularly when prices were at the highest, of course, also particularly when customers in the Northern Hemisphere didn't have an immediate need to buy, of course, there was hesitation, and people wanted to wait to see how things were going.

I think the volume weighting is probably the biggest single explanation for that deviation. I think your second question, in terms of how to think about the third quarter and sort of whether or not to sort of change the lag, I don't think there's any reason to change as such.

I think, obviously, price levels are more normalized now than what they were a few months ago, even though, of course, as we see now, that activity is picking up and also the situation in the Middle East, prices are quite a lot up in the last week. I think as a starting point, we wouldn't sort of recommend that.

I do think it's important to sort of have a view particularly at the differences between various global references. If that sort of discrepancy gets very high, then, obviously, that can have an impact on how prices will look like as well, and on the realized pricing.

I don't know, Maria, if you have anything to add.

I can just add that quite often when we enter into the third quarter, we do often have a longer order book than normal, right, because we take a lot of orders at the end of second quarter. That has not been the case this quarter, there's no reason why you should obviously increase the lag due to a longer order book now as demand has been more soft.

It's more as demand is picking up and activity is picking up, those prices will be the key prices for third-quarter earnings. Yeah.

I think even, of course, if, obviously, results are impacted by how your sales sort of hit the different price levels and so on. I think always good to consider that if you have extreme peaks, then, of course, customers will always be a bit more hesitant as you get closer to application, and of course customer flexibility is lower as well.

I think we leave it at that. With regards to the EUA sales, I think the decision to offload some of our long position, which is what we did this quarter, is also, of course, a financial decision.

We don't sort of speculate in EUA trade as such, and I think sort of sitting on a very long position would only make sense if you think that keeping them would sort of see a price increase, including our discount rate that would sort of merit keeping the EUAs for a longer time. I think it's partly risk management, finance management to sort of take down our long position there.

I do think what is important, and you link it to CCS Sluiskil, and that's, of course, that when we reduce our CO2 emissions in Sluiskil by 700,000 tons each year, that in isolation, of course, means that our long position becomes longer, right? I think we have a long position that with Sluiskil CCS now takes us through 2029 just based our current emissions.

Then again, the decision to how we sort of deal with the surplus is more a financial decision and how we view the market.

Got it. Thank you very much.

Thank you, David. Angelina, it's your turn.

Please unmute and ask your question.

Hello. Thank you very much for taking my questions.

It's Angelina Glazova from JPMorgan. I have a couple of questions around the demand environment and then a quick follow-up on emission certificate sales.

You have already given us quite a lot of color on how demand has developed through the second quarter, and deferral is a term that has often been used to describe what's happened. Now, obviously, we haven't been in that period for a very long time, but over the past week we have seen a pickup.

I think the most notable was Europe. On that point, I wanted to ask, to what extent do you think it is driven by some support or subsidies that have been provided to the European farmers?

Then when you think about other regions into the third quarter, so, for example, LatAm, and in general the fact that it's the Southern Hemisphere that will be in the season in the

Angelina, we lost your sound. We can start answering the first question and then see if we can get you back online by the time we've answered that.

I think that as a general comment globally, when the disruptions in the Arab Gulf happened and the supply was lost, there was simply a requirement to ration on demand somewhere in order to balance the market that drove the prices so high. I think if you then count in that neither India nor China wanted to take part in that demand rationing by keeping domestic prices stable or low, there was quite a burden on most private markets in the world to ration on demand.

Of course, there is quite a bit of demand deferral, and I think your point of Latin America is a star example there where you see that Brazil, for instance, so far this year, through June, has imported 23% less nitrogen than last year, and are now coming into peak season, as you mentioned, there would be logical to expect a pickup. Of course, in the Northern Hemisphere, and also countries like Australia, I think even South Africa, some other places, there has also been lost demand for the season that we have now finalized.

If you just look at Europe, for instance, the European Union has imported 25% less urea during the season that we have now ended than the previous one, clearly indicating that there has been lower application of nitrogen, which you can say then is lost. A combination.

I think just what's important here is sort of the distinction between demand destruction and deferral and season and out of season, right? I think in the beginning of March and to some extent in April, when Northern Hemisphere was in season and, of course, needed tons promptly, as did India and others as well, and then suddenly a big portion of supply suddenly disappears, then you have to have demand destruction, right?

Because there's no extra supplies anywhere. If 20% of supply is gone, then 20% of demand has to go away as well.

I think the way that played out was that, a bit simplified, that India said, "We want to buy 2.5 million tons, and we'll pay almost anything to get it," right, ended up paying $930, significantly above market price. That price was enough to release 2.5 million tons from others who otherwise would have bought it, right?

That, of course, leads to demand destructions in the season that farmers apply less or shift from corn to something else and so on, right? That kind of demand destructions ends with the season.

It's not like they're going to stop buying nitrogen forever, right? I think what we see post the season is deferral is to say that, okay, at this price, I'm not going to buy something that I'm not going to need until January, February, right?

You can do that for a while, but you cannot do that forever. I think, to the extent that turns into destruction for the next season, well then, of course, that would be rationed by price again, right?

I think that that's kind of important to remember that this isn't sort of demand that goes away for forever.

Angelina, I can see that you're back on the line. Could you unmute and ask the rest of your question, as we lost you a bit earlier?

Yes, apologies about that. Thank you for the opportunity.

My follow-up was on the EUA sale. The comments that you've provided earlier, should we treat that as a sign that you are open to further sales potentially later this year or further down the line?

No,

I think for us it is really a question of how much we're going to need going forward and what the price outlook on EUA sales or the EUA price is going to be. We don't have any sort of firm message around how we think about that going forward, but I think for now we thought it was a good idea to lower our long position on EUA sales somewhat.

Understood. Thank you very much.

Thank you. Then we move to Tristan.

The line is yours.

Hi, thanks. Tristan from Deutsche Bank.

Two questions, please. First is, are there any special things like outages or turnarounds to consider in Q3, and how large will the Pilbara maintenance impact be for Q3?

Then second one is a bit more high level. I was wondering if you could talk maybe about the potential impact of El Niño on crop prices and the kind of balance between higher crop prices being a benefit for fertilizers, but then it also causes demand destruction as well.

How do you see those kind of factors playing out together? Thanks.

Thank you. No, thanks for your question, Tristan.

On the turnaround side, I think what we have scheduled for the third quarter is Pilbara. As mentioned before, we have the unfortunate outage there, and we ran it for June, but then came the planned, scheduled turnaround that we have to perform, so that's going to be out for a month or so in Q3.

Other than that, there are no other major turnarounds scheduled. Dag Tore, do you want to talk about El Niño?

When it comes to kind of previous El Niños, I think that most professionals that I've seen, and also be consistent with our own agronomists, is that it's hard to find a very strong link between an El Niño and global production, that there are more local and regional differences. Whether this will also be the fact now that we are talking about this super El Niño, I guess is a little bit early to say.

I see there are concerns in part of the world including Australia, Southeast Asia, India, etc. Then I'm not sure exactly how efficient grain markets are, but I would hope they are reasonably efficient, so that the fact that grain prices are not through the roof is a sign that the market is not kind of overly concerned on a global level.

Having said that, the prices have improved quite a bit over the last week or two, and we see that USDA now reduced their inventory projections in their July report. There are a little bit more talk about concerns.

We had the winter wheat in the US to begin with. Now there are concerns about the corn crop in Europe, for instance, where acreage is sharply down in France, and the heat wave is affecting crop progress as well.

These are things that are kind of ahead of the El Niño, I think it's something that we follow extremely closely, and one of the topics that we are most kind of uncertain about is whether it's all of these issues that part of which you raise, lowered nutrient application and other, whether all of that is reflected in the numbers yet. We look forward to how this is going to progress through the year.

As to the link to fertilizer, I think you can, yes, of course, higher food prices makes it more difficult for particularly the poor part of the world to secure food. From a fertilizer perspective, it's clearly positive that food prices increase.

Okay. Then we move to John Campbell.

The line is yours.

Everyone, it's John. Thanks for taking my question.

I was thinking about kind of how production and deliveries have evolved in Q3. Production, it was down 7% year-on-year.

I know there's some turnarounds there. Deliveries is down 17%, you've built a little bit of inventory incrementally, I guess, in Q2.

How should we think about kind of your earnings relative to the sensitivities given the fact, for example, that you had a $12 per MMBtu gas cost in Q2 and now you're guiding us to something 10-ish percent lower, at around $11 per MMBtu? I guess if you're selling some of the inventory, some of it might have been recognized at a higher cost of production, and therefore the sensitivities might potentially overstate the profitability of those tons.

Again, correct me if I'm wrong, and help me maybe try to think about this, how I calibrate my model. Thank you.

I can start. Yes, you're right, if you have very big swings in the especially the gas cost, right, that will impact how we use the sensitivities.

The gas price has changed a bit, but it's been fairly stable, I don't think you should adjust too much necessarily for that because if you look through the months of from May to at least April, May, June, that shouldn't impact too much. There will be an impact, but you should take it in the volume bucket, right, where both if you're more on inventories now and we have different volumes than the normal assumption that sensitivities is based on, which is based on 25% volume delivery every quarter, right?

That's where you take any adjustments on volumes largely. It makes sense to look at costs for the last few months because we have a longer inventory than normal.

Yeah. No, and

I think the only thing we can add there for the second quarter, I think, as mentioned, the delay in volumes or the lower volumes really came towards the end for the new season. The first part of the quarter was actually quite strong on the volume side, so that also sort of means that the sort of impact of lagging gas prices is a bit less.

Okay. Thank you.

Then

we move to Mollie Gorman. The line is now yours.

Good afternoon. Thank you for taking my question.

Mollie Gorman from S&P Global Energy here. I just wanted to ask about the GCA acquisition, and if it includes the OCP offtake agreement for about 800,000 tons per year, and if not, what is happening with that offtake agreement?

No, thank you.

As mentioned in the press release, the plant was offered for sale without any current offtake in place. I think beyond that, just cautious that closing has not occurred yet, we are not really in a position to sort of comment on commercial matters related to GCA as of yet.

Of course, that's something that we will revert to at a later stage.

Thank you.

Next question is from Bengt Jonassen from ABG.

Yes, good day. Thank you for taking my questions.

I have two questions if I may. One is related to the fixed cost, which increased quite materially quarter-over-quarter.

How much of that was currency? Then the second question would be on the ammonia acquisition, where you state that you expect full operation, I think, by the end of next year if I remember correctly.

As such, should we think of a dilutive to earnings in the first quarter, i.e., negative EBITDA contribution for the first quarters of 2027? Thank you.

For the fixed cost in the quarter-over-quarter, we have an increase of $8 million in fixed cost, but that's a large beat to the inflation for the year, which is estimated to roughly $35 million. It's a strong beat to inflation within the quarter.

The currency effect

is

quite significant in the quarter.

The last 12 months, currency effect is roughly $65 million.

Yes.

Thank you.

Could you repeat your second question, Bengt?

I think you're stating in your presentation that it will reach full, let's say, contribution from the end of next year. Then if we should assume that there will be a small dilution to earnings in the first part of 2027?

Yeah.

Oh, end of 2026. I read it wrong.

I'm sorry, you can just delete that question.

Sorry. Yeah.

No, but just on the sort of in general terms, of course, it also depends on when closing occurs, so that's of course dependent on the regulatory process. The transaction won't close until that's complete, of course.

Thank you.

Thank you.

There are no more questions, it seems, online. If there's not coming anything through now in the next few seconds.

Nope. Then I just thank you for your attention, and wishing you all a good summer.

Thank you for now, and bye.