Good morning, welcome to the presentation of Yara's second quarter 2020 results. Today's presentation will be by our CEO, Svein Tore Holsether, CFO, Lars Røsæg, our EVP for Global Plants & Operational Excellence, Pål Hestad, our EVP for Farming Solutions, Terje Knutsen. We'll have a Q&A session after the presentation. With that, it's my pleasure to hand over to CEO Svein Tore Holsether.
Thank you, Tore. Good morning, good afternoon, and good evening, depending on where you're calling in from. We will, as always, start with safety. As you can see on the screen, our TRI rate is stable at the low and also industry-leading level, despite the COVID-19 challenges. We see a material impact or improvement year-over-year, and a stable development from the first quarter. Our long-term target of zero injuries remain the long-term ambition. I do believe that our Safe by Choice way of working has been key to our rapid response to the COVID-19 situation. Through our already systematic work over several years on health and safety, we were able to quickly roll out the additional health measures required to operate our business with resilience in this new situation. Let's take a look at the results.
Our EBITDA increased by 8%, mainly through improved margins and lower fixed costs. I'm pleased to see that our organization is performing well in a demanding situation. Although second quarter saw weaker pricing and somewhat lower volumes, first half deliveries were in line, despite weaker industrial nitrogen demand due to COVID-19. We continue to show strong cash flow at $1 billion for the rolling four quarters. The QAFCO transaction closing is expected within the next two to three weeks, and we are initiating a 5% buyback upon completion and receipt of the proceeds. Further cash returns will be considered in connection with the third and fourth quarter results, in line with our capital allocation policy. Before we go further into the result, let me provide some comments on the market developments this quarter.
We start with urea, where we see a significant drop from last year when Chinese producers had fairly good margins. This quarter, they are low or zero, but it is positive that the floor has held through demand this quarter. Turning then to gas, there's been a drop of 60% in gas prices in Europe compared to the same quarter a year ago. This more than compensates for the urea price fall. Nitrates and NPK prices are lower as well, but more resilient. As you can see, they are falling less. We'll come back to nitrate performance later on in the presentation. EBITDA, excluding special items, increased roughly $40 million compared to the same quarter last year, as improved margins and lower gas costs more than offset the effect of lower deliveries.
We have a $42 million positive currency effect, mainly due to our fixed costs in the Euro, Norwegian kroner, and Brazilian reais translating then into a lower US dollar amount. As already mentioned, we have continued to reduce fixed cost. The negative $19 million portfolio effect reflects operations no longer in our results, such as the Trinidad plant that we closed at the end of 2019. I'm pleased to see that we're continuing our improved cash flow trend, improving both above and below the line. Better operations, lower investments. This is a $1.2 billion improvement last 12 months compared to where we were 12 months earlier. We recently announced a new organizational structure with a regional setup, replacing our operating segment structure.
This is to sharpen customer focus and empower regional and industrial solution units to run operations in a fully integrated setup with production, supply chain, and commercial operations. The Global Plants & Operational Excellence unit will operate Yara's largest production plants and optimize global product allocation. Farming Solutions has a global mandate to drive the transformation of our core crop nutrition business. Our corporate strategy is unchanged, and we will continue to leverage our global production and market presence. Restated the 2019 and first half 2020 financials will be made available to you before the third quarter results. Regional EVPs will be presented in the future quarterly presentations and other events. I'll now hand over to CFO Lars Røsæg, after which you will hear from the status from Pål Hestad and Terje Knutsen. Many of you know Terje from earlier.
This time he will be giving you a status both from his outgoing sales and marketing role and also on the way forward for Farming Solutions. Pål Hestad has long experience from Yara's production operations and also has been heading up and still heads up our COVID-19 crisis response team. First, over to you, Lars.
Good morning. Good afternoon, everybody. It is my pleasure to take you through some more details on the financial results. As mentioned, the EBITDA increased by around 8% year-over-year, which was driven by higher margins and also lower fixed costs. The EPS excluding currency and special items, also increased in the quarter driven by the higher operating result. Capital discipline and focus on free cash flow is a key focus area for Yara as a basis for efficient capital allocation and shareholder returns. In the quarter, net operating capital decreased, driven by lower receivables as the season ended in Europe, and we also saw that investments were lower in the quarter. Cash flow from operations increased compared to last year, and this is continuing the trend over the past year with a significant higher level of cash generation in the business.
Given the improved operating results, lower investments, and lower operating capital, our return on capital has also shown a significant improvement, representing a step on our improvement journey. Then we turn to the results by segment, the production output was in line with the year earlier and Pål will get a little bit back to this. We saw somewhat higher margins as the gas price improvement more than offset the decline in nitrogen and phosphate prices. For new business, the COVID-19 impacted the industrial demand and activity, mainly in maritime. As far as sales and marketing is concerned, I will leave that for Terje to go through a little bit later. Then we turn to the CapEx profile, there is no change to the committed CapEx.
As we also communicated in the first quarter, our focus on sustaining operations amid COVID-19 and hence our focus on optimizing timing of turnarounds to avoid prolonged outages, may lead to some phasing into 2021. The improved operating margin saw cash earnings more than fund the dividend payment of NOK 50 per share in the second quarter. There was also a positive effect from receivables in Europe and seasonal prepayments in Brazil, resulting in the net debt EBITDA coming down from 1.7 to 1.6 during the quarter. This places us in the lower end of our mid to long-term target range of 1.5-2 in our capital allocation policy. As you will have seen, we have announced a buyback for utilizing the AGM mandate and will align with this policy, evaluate further cash returns at Q3 and Q4.
In line with our mission and focus on sustainable value creation, it has been natural to take concurrent measures to further broaden governance and performance management, in particular with regard to non-financial parameters. Concretely, the board audit committee has been expanded to the scope of Audit and Sustainability Committee, and sustainability governance is now reporting directly to the CFO, utilizing existing reporting and control mechanisms to increase quality of non-financial reporting further. We're also driving a holistic performance management approach covering financial, environmental, social, and operational performance. We have integrated reporting, as you will have seen in our annual report and the TCFD framework under implementation. By that, it is my true pleasure to hand over to you, Pål.
Thank you, Lars. Good morning, good afternoon. Let me give you an update on the Yara Improvement Program. Starting with the production volume performance. Top priority has been and is to sustain the operation through the still challenging COVID-19 situation. Production and operation have been running without material disruption. In our Babrala plant in India, we have had temporary rate reduction due to lockdown leading to raw material shortages. The overall Q2 COVID-19 effect is around 30 kiloton ammonia and about 75 kiloton finished products. If we compare the last 12 months production to the status one quarter ago, ammonia has been stable, while finished product are up with 35 kiloton. An update on reliability on our production plants, which remains a top priority. Current status. Last three years growth of one million tons of ammonia and 2.4 million tons of finished products.
We see improvements in several plants, but others continue to struggle. There is a clear link between the best performing plants and YPS maturity level. YPS is the Yara Productivity System, our system for continuous improvement. Our overall performance is in line with peers, but we strongly believe we can further improve and are looking further outside our own industry for higher benchmarks and more ideas. Focus going forward: people and organization. We have created the operational excellence unit by merging three units into one to ensure increased focus and better prioritization. Launched an operational committee to drive performance management, continue to build competence through our Community of Practice. We do not believe we need more investment funds to improve reliability, but we do see further potential in competence building. Move to the plant.
We want to move more central functions to the plants to ensure proper support at plant level. Program and tools. Reliability continuous improvement program. For the sites where we struggle, we see that we need to go deep with central team to ensure learning both from own and other plants' problems. We want to strengthen the rotating competence, as we see it is one of the main areas for outages. Within engagement and involvement, we also see we have potential for further engage our workforce in the improvement journey, learning from what we have successfully done in safety and within Safe by Choice. If I take status on the non-volume improvement KPIs. Energy efficiency. Improvement compared with 2019 mainly reflects the Yara Trinidad closure at the end of the year. Within fixed cost, recent reduction in central fixed cost account for improvement versus 2019.
We are on track, but important to recognize we still have cost inflation going forward. This is why we need to take out the cost now in order to achieve the 2023 target, which is basically to beat inflation. Within operating capital, as you can see, we have bigger gap to close here. However, we are comfortable having somewhat higher operating capital right now as we have strong margins both on inventory and receivables. One additional comment for those who are into the details on this topic, we do not include customer prepayment at this operating capital KPI. This concludes my part of this presentation, and I will now hand you over to Terje Knutsen, who will update you on the sales and marketing activities.
Thank you, Pål. A very good morning and good afternoon to all of you from me as well. Sales and marketing delivered a strong quarter financially with an EBITDA increase of 24%, driven primarily by higher margins, lower fixed costs, and currency effects. The latter is primarily linked to weaker Brazilian real, which improves our competitiveness in what is basically a US dollar margin business. Total deliveries were 2% lower than a year ago, while premium product deliveries were 3% lower, both of which reflect early spring phasing in Europe. Revenues declined 14%, reflecting a combination of lower deliveries and lower commodity nutrient values. As already mentioned, the phasing of the deliveries in Europe reflects an early spring, with higher than normal deliveries in Q1 and is somewhat lower in second quarter. Full season fertilizer deliveries in Europe were 3% higher than the previous season.
I will comment on the commercial performance of the season now ending in Europe in a minute. We are also satisfied with how the new season has started in Europe in June. The strong first quarter development in Latin America continued into the second quarter, and we also had a strong development in Brazil, partly offsetting the development in Europe. As mentioned, full season fertilizer deliveries in Europe were 3% higher than the previous season. We're also happy with our overall commercial performance in Europe over the season, and this chart shows the accumulated realized nitrate premium over the season, accounting for both price and volume. As you can see, we performed better in the 2019, 2020 season than we have done in any of the previous three seasons.
All in all, we remain confident in our strategic direction and our medium to long-term ambition communicated at our Capital Markets Day. The fact that we have improved the EBITDA margin per ton by 30% since 2018 illustrates that we are well on our way to deliver on our ambition. Over the last 12 months, our premium deliveries have increased with almost a million tons. COVID-19 has had limited impact on our traditional business as we have been able to engage customers and end users digitally. However, growth of our YaraVita deliveries have suffered somewhat during the COVID period, as this is a product range that requires demand creation to a larger extent, and that has been more challenging in the recent months. Yara's digital journey started three years ago, and we are so far very satisfied with what we have achieved.
It will continue to play an important role in our transformation, which I will come back to shortly. Before doing so, I would like to recap a bit what we have achieved so far. The first step in capturing value is to prove the concepts and get adoption, which has been our focus so far. As illustrated, we have managed to get very good traction in the market for what we have launched. In the professional markets, the number of hectares where farmers have signed up is almost three times higher than a year ago, and we have reached 120,000 users. We have also started to test out commercial models, and although numbers are still small, we see clear signs of willingness to pay for services.
In the smallholder markets, the number of smallholders that have downloaded our Farm Weather app passed more than 2 million in May, tripling only since December. The number of active users has passed more than 1 million. We are starting to build an ecosystem around this, adding new features that over time will enable value capture. We have, for instance, just launched a concept called Farm Care, which is an end-to-end production support for rice farmers. The concept includes in-field sensing using a smallholder N-CLIP that helps the smallholder farmer to apply just the right amount of nitrogen. Two weeks after launch, more than 12,000 farmers in India signed up, and we have in addition, been contacted by four local banks interested in collaboration. We believe this is just the start, and we are very excited about this future. The agriculture and food landscape is changing rapidly.
Technology clearly opens up new opportunities, and the realization that food production needs to become more sustainable creates both opportunities, but also risks that we need to deal with as legislation will impact how farming is done in the future. Food companies are responding to changes in consumer behavior by integrating more backwards. All these changes create significant opportunities, but also risks that Yara should mitigate. This requires a transformation of Yara, where the transformation is not a goal in itself, but we see it as an enabler to mitigate risks and more importantly, capture value where new opportunities arise. By changing to a regional model, we have taken a conscious decision that we want to drive this transformation through the regions, but with Farming Solutions as an incubator, with a purpose to facilitate and lead that transformation.
To position Yara in this evolving landscape, we want to firstly take a leading position in farm sustainability. Secondly, we want to secure connectivity between Yara and the farmer. We want to become the preferred partner for food chain players. Last but not least, take a leading position in the digital channel disruption. What does this mean in practice? I will now give you some examples of the transformation and explain how you should think of this in a financial context, although without going into numbers. Our transformation will happen along two dimensions. Firstly, we will shift or transform existing revenue streams. The product we deliver can remain the same, but we will transform both how we monetize the product and the channel we use to do so.
Rather than selling a ton, we will transition towards selling outcomes and thereby capture more of the value we add for the farmer. We will drive the channel disruption and go more directly and thereby shortening the channel to capture a bigger portion of the value. The channel transformation is also a key enabler in realizing the transformation on the business model changes. We see, for instance, Brazil as a key market for this kind of channel transformation.
Secondly, we will add new revenue streams by creating new offerings where physical products are not necessarily part of the offering at all. Much of that will be digitally enabled. Examples are digital subscription services such as Atfarm or YaraIrix, as already mentioned. Bringing such solutions into platform concepts will open up opportunities where value can be captured by monetizing the data towards third-party players, such as insurers or banks. These are just examples. We have a long list of models that we are presently working on. By combining these new service offerings with potentially a product concept that is easier to handle and be competitive from a logistical point of view, we will also move into new geographies where Yara previously has not been present. In conclusion, by shifting or creating new revenue streams, we will add new earning opportunities for Yara.
With this, I hand over to Svein Tore, who will give his closing remarks.
Thank you, Terje. Running up then, we continue to consider our prospects attractive. Firstly, the industry fundamentals, where a growing population and agriculture's resource and environmental challenges continue to create business opportunities for Yara. In addition, the market cycle is improving, primarily due to easing of supply-side pressure. Our cash flow is improving, and this is both due to cyclical improvement and that our strategy execution is delivering improved cash flow. Finally, we have a strong competitive position with a focused and sustainable long-term strategy to deliver improved returns. Finally, on the subject of agriculture's resource and environmental challenges that are creating business opportunities for Yara. This is from the Food and Land Use Coalition report that I very much urge you to read. As you can see, the market value of the global food system is at $10 trillion, which is a large number.
As you can also see, the externalities or hidden cost of our global food system exceed its current market value. Today, the farmer is only paid for her or his crop. Let me highlight one of many examples and opportunities related to this. If farming is done right, 40% of existing farmland could be turned back to nature with a huge carbon sequestration impact. There's a lot of talk about carbon capture and storage technologies today. The best technology is already invented. It's called a tree, and when you put several of those together, it's called a forest. Using nature to solve climate challenges. Simply by moving cost to society, that it's already paying for environmental damage today, to incentives to the farmers to farm more efficiently, we would create an additional revenue stream for the farmer.
We would create additional business opportunities for Yara, and we're doing something that is very positive for the environment. It's a triple win. Yara is collaborating with food value chain players and tech companies to drive this development. You can definitely expect to hear more from us on this topic going forward. At this point, I'll hand back to Tore, who will manage the Q&A session. Thank you.
Thank you, Svein Tore. Before we go into the questions, just a quick word on the format. We have, with COVID-19, had a different format on both the presentation and the Q&A, with email questions, and I know that probably most of you out there prefer a more interactive format, and just to say that we expect to go to a more interactive format from the next results presentation. Having said that, thanks to everyone who sent in questions. We've received quite a few. We will cover, I think, if not all of them, I think we'll cover most of the topics. We will also look through at the end for those that came in a bit later and make sure that we respond to those separately. I'm going to start. We have three questions from Bank of America, Alexander Jones.
I think the first two are for our CFO. I can read them both. The first one is on cash returns. We've stated in the past that buybacks will be a supplementary lever of shareholder returns rather than the main driver. Is this still the case, despite the announced buyback being bigger than this year's dividend? Or would you consider seeking EGM, extraordinary general meeting approval to do even more buybacks over the next few quarters. That was the first question. The second was CapEx guidance. Our spend in the quarter was very low. Do we still expect to spend $1.2 billion this year, or is some of this delayed, and/or capital discipline allowing us to keep the budget lower than guided?
Yeah. Thanks a lot, Alex, for your questions. To your first question, where we are always guided by our capital allocation policy from the CMD last year. Dividend is still our main lever in line with that policy. What we're doing now is that we're fully utilizing the buyback mandate from the AGM, which then runs until April next year. Then we have been clear that we will consider further cash returns in Q3 and Q4 in line with our policy and the mid to long-term target range of 1.5 to 2. I think your second question was on CapEx spend in the quarter. We've indicated also in the presentation that there may be some phasing.
I do at the same time think it's useful to remember that we normally, seasonally have a higher spend in the second half of the year, but indeed, phasing may occur.
Okay. The third question from Alex, I think will go to Terje Knutsen. It's on the demand outlook. It says, "You mentioned in the report that some of the strong demand recently in some regions may be caused by inventory buildup due to fears of COVID-19 disruption. Do you see a risk of corresponding destocking in the second half of the year? Has this effect been relatively minor?
Yeah. Thank you. I'm not sure that is actually an accurate interpretation of what we tried to say. Let me split a little bit by internal and external. Maybe most relevant is the external part. I start with that. We actually see a rather firm market right now. Globally speaking, we do not see any special buildup of stock. Rather that product is moving into the markets quite well. We can see in India, for instance, that had a very strong second quarter. We can see, which you also can see in our numbers, Brazil, that has had a strong demand. Overall, I would say that we do not see actually an inventory buildup in the external.
Maybe the comment is a little bit related to our own situation where, as we have commented, the demand or deliveries in Europe were somewhat lower than a year ago. That combined with quite attractive production cost, has led to a situation where we by design, in a way, run our plants full blast and consider this just, let's say, quarterly nuances that we see beneficial to have that product for delivering on our order book and into other markets. All in all, I think we are fairly comfortable with the situation we have at hand.
Okay. Thanks both to Lars and Terje. I'll move then to UBS, Andrew Stott. Firstly asked what was the background for the organizational change. I think that one we've probably answered in the presentation. Andrew, please reach out to me afterwards if you have more questions. Second one, I think goes to Lars again, our CFO. What percent of the $1 billion proceeds, I guess this is QAFCO, will Yara aim to return? Can you also confirm if there is any tax on those proceeds?
Yeah. Thanks a lot. We established, as I mentioned, our new capital allocation policy at the Capital Markets Day last year. We're driven by that policy, which we hopefully also demonstrated over the past year. Now we are fully utilizing the buyback mandate, but we've also then been clear that we will consider further cash returns for Q3 and Q4. As to QAFCO, we'll have no tax effect on the proceeds.
Thank you, Lars. Next questions, three questions from Citi, Thomas Wrigglesworth. First two I can do, I think they can both go to Terje Knutsen. One, what are your expectations for the nitrogen market in second half 2020? Do you see current spot prices as a fair reflection of the supply and demand balance? That was the first question. The second is, sales and marketing margins have improved. Do you see this as the new base for margins going forward? What further improvements are there that could support higher margins?
Yes. Thank you. If we start with the expectation for second half, again, if we look at the situation we have at hand, it has been fairly stable. I would say underlying slightly positive. I guess most of you are following the Indian tenders, one coming in today. We see that the situation is such now that there is again need for the Chinese production, which we consider a positive. Some of the crop environment has been, maybe price-wise, on a downward trend, but so are input costs. If we look at farm economy, it's actually fairly stable or even positive. Also from a demand side there, we do not see that we have any, let's say, significant negatives coming on the horizon.
Generally, I would say we have a slight positive outlook in the sense that we see now an increased need for Chinese nitrogen. On the second question with sales and marketing margins have improved. Yes, I think we have been quite clear that we have a strategy for the whole area on how we position Yara going downstream, moving more towards the premium products and also adding more services and building truly crop solutions. I would say that the developments we see now are quite consistent and have been so over some time, and are part of the strategy that we already went quite into depth during our Capital Markets Day, for instance. I would say that the whole strategy is about building resilience and building a margin business where we move from volume to value.
I can also add that we start to see more income streams that are not directly linked to volume as such. As that increases, that will obviously also help as we still express our revenue as revenue and earning per ton.
Thank you, Terje. One more question from Citi. I think could maybe start with Svein Tore, our CEO. It's on the European Green Deal. As a large producer of hydrogen in the EU, how do you interpret the current ambitions of the EU? Will Yara incur higher CapEx in the coming years as you look to decarbonize your hydrogen production?
Well, I think I partly addressed that on my final slide, and I see it's still up there. Let me use that as a reference as we go through or as I make some comments on this. There is definitely a huge movement now in Europe to reduce the overall carbon footprint and for the food system in particular. That's also something that we see on the global arenas with some of the most innovative food companies out there, really making big statements now and taking action to lower the carbon footprint of food. What I would like to emphasize is that this is not a burden that we need or should put on the shoulders of the farmers alone. We need to see this in a much broader context and create incentives for the farmers to support and to drive this change.
The good news to that is really illustrated on this graph. We're already paying these costs to date. They're just in different categories, like health and environment. As I touched upon, if we can reduce the size of the farmland through higher productivity, we can do carbon capture through that. Health, for instance, I think in past years, we referred to the example from Finland, where the government realized that the selenium level in the Finnish population was too low and looking at the various alternatives and supplements and so on, they came to a brilliant idea to add that into the food system through fertilizers, and through that was able to increase the selenium level in the Finnish population. Moving a huge cost on health through a small cost added to the food system.
That in a way tells the possibilities that can be done and realized through agriculture to solve challenges. I could go on and on this topic. It creates business opportunities for the farmers, and it will also support our business model. There's also a lot of focus on in-field emissions, where I think we're particularly well-positioned. When it comes to green ammonia or green fertilizers, we have already launched a project together with the Swedish food company Lantmännen to create the world's first-ever certified carbon-neutral food chain. We're looking at the further opportunities to build on this at a bigger scale. How we do that is something that we'll get back to look at various structures on how we source or produce that hydrogen.
Also here, our normal capital allocation and the capital return requirements are the same as for all other investments in Yara.
Maybe I can just add very concretely in this season, we have seen the first signs of shift from urea, UAN, towards nitrate. We have relatively been capturing market share for nitrates, and we believe this comes partly as a consequence of the regulations, for instance, introduced in Germany, with broadcasting of urea, which both creates complication for the farmer. More importantly, as Svein Tore mentions, a lot of the focus now is on the in-field emissions. We believe that with our position in nitrates, we have a good starting point to address some of the issues that now are being addressed through the European Green Deal.
Thank you, Svein Tore and Terje. Moving to J.P. Morgan now, Chetan Udeshi. We have three questions there. I think the first one is probably mainly to Pål on production. I won't go into all the numbers here, but I think the gist of it is the improvement targets that we have for 2023 clearly involve a large volume step-up, both on ammonia and finished fertilizer, from where we are today on the last 12 months. The main question is how realistic are these targets? Then there's an associated question on assuming we reach these targets, is there a sufficient market there to sell that additional production? Maybe start with the realism part, Pål.
Thank you, Tore. Let's say we absolutely believe they are achievable and also realistic. We also see that our plants with the highest maturity in terms of implementing our Yara Productivity System also have a strong improvement. A significant portion of the volume is also linked to growth projects realization. Clearly there are some risks linked to the COVID-19 measures, for instance, in Brazil, which can curtail project execution. Just also want to underline that we also think that when we look to some of the longer outages, what we have had, for instance, in Pilbara, that they are clearly avoidable.
On the market side, I think we have commented on this, but we see relatively low growth on the supply side for the coming years. We actually think that we will be able to absorb that volume, and we see room for that in what we have of plans on the market side.
Okay. Thanks, Pål and Terje. The second 2 from J.P. Morgan can go to the CFO, although I think one has been answered because the third one was on tax on QAFCO. The second 1 is on CapEx. Why is maintenance CapEx $200 million higher in 2021 versus 2020? Is this a new run rate per year? Will there be additional growth CapEx over and above the 200 indicated currently?
Thanks, Chetan, for your question. Two turnarounds. The main driver for variance is the number and size of turnarounds per year, which naturally will vary. As Pål mentioned also earlier, we believe that we are in line with our peers on a like-to-like basis, but as also highlighted in today's presentation, we are continuously looking for opportunities to improve our performance further. To your point on growth, I believe we've been very clear that strong capital discipline and focusing on executing our current projects is our key priority.
Thank you, Lars. We'll move then to ABG Sundal Collier, Bengt Jonassen. Two questions. I think the first one can go to Terje. It's on NPKs versus nitrate deliveries in the quarter. NPK held up better. Why is that? Any specifics on regions, crops or other factors?
I think we can say that that has a quite simple explanation. It's basically a phasing of the European season. As you probably know, our relative volume for nitrates is stronger in Europe. When we have seen the development now in second quarter of somewhat reduced volume on nitrates, that explains, let's say, the volatility on the nitrate. We see that purely as a phasing. NPK is a product which we have positioned into many crop segments globally, and therefore, in a way, we see much less of these, let's say, seasonal fluctuations in NPK. We don't think you should read any trend into this other than the typical seasonal swings that we have on the nitrates.
Thank you, Terje. The second question I think goes to Pål. It's asking about our production targets and basically the impact of the divestment of our share in QAFCO.
The QAFCO volumes have not been included in our YIP program. From that part, there is no effect on the YIP targets. Having said that, QAFCO has also been a part of the rollout on our YPS system, so they are working the same method as we have done.
Thank you, Pål. As I mentioned at the start, we have had a lot of questions. I know quite a few have come in also after the ones we've asked. At this stage, we are going to round off this session. As mentioned, we will make sure that we will respond to all of your questions. Hopefully we've covered many of the main topics here. I think with that, thanks to everyone for attending the call.