Financial reports sample-Yara International-Outlook

（Edited by freelance Chinese translator li – English to Chinese translation or Chinese to English translation services- financial report translation）

Outlook （展望/前景）
Global urea price increases over the last year have been dampened by higher exports from China. China exported 5.3 million tons of urea in 2007 and exports increased further in first quarter 2008. The export tax（出口关税） of 135 % announced by Chinese authorities this week will substantially impact the global urea supply-demand balance. Prices will have to move up to reduce demand to balance the market and/or allow some Chinese export to continue.

Global food markets remain tight, with grain prices at historical high levels（历史高位）, continuing to encourage farmers to expand acreage（耕种面积） and increase fertilizer application rates, even at higher fertilizer prices. The recent sharp increase in rice prices will incentivize（刺激） China and India, the world’s two biggest markets for fertilizer and grain, to continue their efforts to improve agricultural productivity （农业生产力）including better fertilization. This development should support balanced fertilization and long-term growth in Indian fertilizer imports and the curtailment （削减）of Chinese exports.

Start-ups of new urea capacity are currently running at a lower rate than demand growth, as limited engineering capacity（施工能力） and increased construction costs（建造成本） delay of new capacity.

Following an 8 % increase in deliveries for the first three quarters of the season in Western Europe, deliveries for the final quarter are expected to be more in line with last year. The tight supply-demand situation in Europe has increased the time lag（时间间隔/周期） from ordering and price setting（定价） to delivery in the last quarters, but this lag is expected to now head back（返回） towards the normal one-month average. Low inventories as well as the booming global urea market following the Chinese export tax announcement should support prices in the final phase of the European season.

First-quarter EBITDA was a negative NOK 194 million, compared with a negative NOK 23 million last year (see page 22). The negative variance mainly reflects elimination of internal profit in inventories（存货）.

While finished fertilizer markets continue to be firmly demand-driven（需求导向）, the balance for ammonia is weaker. As we enter a seasonal weaker part of the year, and with the recent start-up of new ammonia export capacity, the ammonia market may temporarily turn supply-driven（供给导向） and some European production could be curtailed in the short term. However, the effect on Yara earnings will be limited as Yara is quite balanced in ammonia production and consumption.

Yara’s energy costs for second quarter 2008 are expected to be approximately NOK 1.3 billion higher than last year. Based on the current forward market for oil products and natural gas (April 8), Yara’s energy costs for third quarter 2008 are expected to be approximately NOK 1.2 billion higher than last year. The estimate for the third quarter may change considerably depending on future energy prices. As communicated earlier, 35 % of Yara’s European energy cost is hub gas exposed（受到…的影响）. At this time, Yara has hedged about 10 % of its second-quarter hub gas exposure.

The Board of Directors of Yara International ASA
Oslo, 17 April 2008