Okay, good morning. Welcome to Yara's fourth quarter results presentation. We'll have presentation from our CEO, from our EVP Sales and Marketing, and from our CFO. Without further ado, it's my pleasure to introduce our CEO, Svein Tore Holsether.
Thank you very much, Thor. Good morning to all of you. Before we go into the presentation material, I want to give my overall view on the results, which is that Yara's strategy execution is on track despite a slow market. You can see this in our commercial performance, our cash flow, and our bottom line. As a result, we are significantly increasing our cash returns to our owners. Okay, let's go through the results. As always, we start with safety, and we're pleased to continue to be at a low and industry-leading TRI rate. In addition to the TRI improvement, we have, during the last three years, in particular, seen a significant decline in absence day as a result of injuries. In 2019, it was halved compared to 2018. If you compare to where we were five years ago, we're down by 80%.
This indicates that the severity of the accidents are declining, which is good for our safety work, for our employees, and for the company. We always need to keep in mind that here I'm talking numbers, but behind the numbers are real people, colleagues, and contractors that have been injured at work. We had 91 of these accidents in 2019. We believe that we can ultimately get to zero, and we will continue to work towards that goal. Now, let's take a look at the results. I already mentioned that I'm pleased with our commercial performance, our cash flow, and also our bottom line improvement this quarter. Within commercial performance, I would like to highlight our NPK premium increase and also our new business segment result this quarter.
In terms of production, our plant portfolio is benefiting from lower gas costs, but production performance-wise, the quarter in total for the portfolio was unsatisfactory. We'll come back to all these elements during the presentation. Before we go further into the result, let me provide some comments on the developments this quarter. Starting with urea prices, these were around 20% lower, mainly due to lower input costs than local currency in China. This compares to a year earlier where there was a demand-driven pricing in the beginning of the quarter globally. Production decreased as well, at least in Europe, where gas prices were down 55% compared to a year ago. Also in the U.S., where gas prices were down 38% compared to the same period last year.
Yara's realized nitrate and NPK prices were also lower, much less so than urea, thereby increasing premiums compared with urea and other commodity fertilizers. The publication prices that you see on the chart are lagged by one month to better reflect Yara's P&L, where deliveries made today typically have been contracted roughly a month earlier. As already illustrated, our realized prices for nitrates and NPKs decreased less than commodity nitrogen prices, which explains the major part of the margin expansion for our sales and marketing activities in the quarter. As shown in these two charts here, the commodity value of the nutrients we sold in the quarter was down more than 20% in the quarter, while Yara's realized product prices were down only 8%. Our premium over commodity value actually increased by 8% in the quarter.
I think this illustrates well how sales and marketing reduces the volatility and adds value. This is made possible by operating deep in the markets and working actively to differentiate our offerings. The difference in premium levels between the left and the right-hand side, you see clearly where sales and marketing is able to add the most value. For commodity products, our premiums primarily reflect that we operate deeper in the market. Whilst for premium products, we consistently realize $60-$70 per ton higher premiums than for commodity products. This mainly reflects our ability to create additional value through in-market presence. We have 950 agronomists that are working out in the field, and also 10,800 fully Yara-branded retail stores throughout the world.
Our focus on growing premium product business adds value to Yara, to the farmer, and as I will come back to, also to society by reducing the carbon footprint of farming. Our new business segment has also had a strong performance this quarter. Actually, the 2019 earnings are at a new record level. Also, as you may have seen, we're undergoing a change of leadership within the segment as a result of Yves Bonte leaving Yara to become CEO and Chair of Domo Chemicals. Given this and NewCo’s many interfaces with Yara, we have decided to extend the IPO or spin-off evaluation and scope assessment process to mid-year in order to address this process with sufficient time.
With our cash flow improving and our outlook generally robust, we believe that we can keep our net debt to EBITDA in the upper end of the targeted range of 1.5-2. On this basis, our board proposes to the annual general meeting a 2019 dividend of NOK 15 per share. We also plan to buy back 0.5% of shares outstanding by the end of the first quarter, or approximately 0.8%, including the proportional redemption of Norwegian state shares. In total, equivalent to approximately NOK 3 per share at the current share price. Buyback activity will be actively evaluated on a quarterly basis in accordance with our capital allocation policy that we announced at the capital markets day back in June of last year.
Going back to the field then, and the subject of crop nutrition, efficiency, and sustainability, agriculture is responsible for nearly a quarter of global greenhouse gas emissions globally. On the one hand, that is a big challenge, but it's also a very big opportunity, not least since half of this is due to emissions as a result of change of land use. This means that efficient crop nutrition solutions have a major role to play in solving some of the planet's biggest challenges. On the right-hand side, you can see some of the potential illustrated on the difference between high-yielding and low-yielding farming for some crop types. If we can move some of this less efficient farming over to best in class, that is a huge gain to be realized. Not only can we reduce emissions from change of land use, but we can also be reversed.
That can be done through reforestation and by having a higher carbon content in the soil. We're talking now about creating new carbon sinks to sequester carbon from the atmosphere and storing it in the natural way. As Vice President Al Gore once said, "The best technology for carbon capture and storage is already invented. It's called a tree. When you put several of them together, it's called a forest." Nature-based solutions really hold a lot of promise. Precision farming, digital solutions, and premium products are at the core of Yara's crop nutrition strategy and contribute to reduce emissions from overapplication and maximizing nutrient use efficiency, and then also reducing the need to clear forest or grassland for farming.
According to the Food and Land Use Coalition report, Growing Better, through getting farming right, it's possible to reduce agriculture and pasture land that is currently used for producing food by one-third and turn that back into nature with the impact that that would have on carbon sequestration. We see significant opportunities in this space. Agriculture is now at the top of the agenda for both regulators and food companies. One major obstacle is data, and we are addressing this with some of the largest and leading companies across different industries. Through our partnership with IBM, we have established a data management platform for managing our own data in a way that allows machine learning and artificial intelligence to be used on that. IBM is a world leader in artificial intelligence, and we are a world leader in agronomy.
Together, we're taking this leading position in the field. Two weeks ago, I was in Davos at the World Economic Forum, at a joint session with IBM, we launched an initiative with the objective to establish an open farm and field data exchange. We're inviting players across several industries to take part and join forces to create such an exchange. As we grow the sophistication of our digital offering, we need more and higher quality data, in a secure and trusted way by the farmers. This is about scale. There are about 600 million farmers out there. In addition to tackling the data challenges, we see a closer collaboration with food companies as a key part of this, and we're working on that through our food value chain operation. Let's now take a look at how we're working with that.
Seeing that film reminds me of what I saw myself first time when I was in India back in November. When I was there, I met with Anju Agrawal and her husband, Govind. They are in the Khandauli village, right outside Agra. They have a four-hectare plot where they grow potatoes. They were already fairly advanced in their farming techniques, but with the right crop nutrition program, they have increased their yield by 15%, where really the key ingredient was knowledge. They combined that knowledge with products and turned that into solutions and helped with the soil health. In turn, they get a higher price from the buyer at harvest time because they have a more consistent and a higher quality product. That's really a quadruple win. It means higher profitability for the farmer. It means higher premium sales for Yara.
It means higher productivity and profits for the food processor, and a lower environmental footprint. This is achieved by thinking holistically and addressing the whole value chain. This is only one example, but if you multiply this with tens of millions of farmers, we're talking incremental changes with a world-changing impact. I'd like to now hand over to our CFO, who will take you through our financial performance in more detail. After that, the EVP of Sales and Marketing, Terje Knutsen, will provide an update on our commercial activities. Over to you, Lars.
Good morning, all. It is my pleasure to present a little bit more detail on the fourth quarter results for Yara. In general, the quarter demonstrated a strong financial performance on several parameters. We are, of course, pleased with the continued growth in EBITDA, and consequently, the EPS driven by our strategy execution, affecting both the top and the bottom line positively. In addition to that, we are pleased with the results we're able to deliver on the capital side, with a continued strong focus on CapEx control and a material release of working capital. In totality, this drives our rolling return to around 6.5%, some 3 percentage points up on last year. This continues to support our communicated path towards our more than 10% through the cycle return target.
Yara has, over several years, seen negative free cash flow generation from a significant investment program, combined with low market prices. In Q4, the positive trend from the past four quarters continued, delivering a substantial net cash flow from operations and around $ 850 million free cash flow on a rolling basis. We see this development as a confirmation of implementing both our commercial and operational improvement levers, as well as our capital discipline materializing. EBITDA, excluding special items, increased by roughly $100 million, where commercial margin management and energy cost drives the improvement. An improved mix in line with our value or volume focus provided a positive volume effect, and better margins contributed to the net increase in EBITDA, while we saw a negative impact from lower commodity margins.
The other includes the IFRS 16 effect of around $30 million, a positive effect from lower fixed cost following our Improvement Program, as well as a negative delta effect, mainly due to insurance compensation received in the fourth quarter of last year. If we zoom in on the segments, there was continued profit growth for Sales & Marketing and New Business, as Svein Tore explained on the latter, and Terje will explain in more detail when we talk about Sales & Marketing. Production had a quarter with materially lower commodity margins, which naturally influences negatively, and the quarter did also see operational challenges in some of our plants. As we have discussed earlier, our Improvement Program will see volatility around an improvement trend, and Q4 saw several unplanned outages, which impacted our overall output.
Turnaround performance and reliability planning continues to be on top of our agenda. We should also note that there were several plants with improvements in output. For example, Belle Plaine, which had a record year in 2019. Combining these challenges with the ramped status of our few remaining growth projects, we do see an impact on output in 2020 as quantified on the next slide. However, the 2023 targets are not affected. Zooming in on some of our key projects, we can tick off the box on the three projects to the left now being executed and will be part of our normal performance follow-up.
We do have delays in our remaining projects in Brazil, where we now estimate completion at the end of 2020, and second half of 2021 respectively, which, together with the underlying performance in Q4, provides a negative effect in 2020 in isolation, while the 2023 targets remain unchanged. The effect is also quantified at the bottom of this slide. As to Dallol, the project has a robust profitability, but given Yara's strategic direction, the project is currently on hold, and Yara is aiming to find structural solutions to the project prior to any build decision, minimizing any further CapEx for Yara relating to the project. The ammonia energy efficiency saw a positive development during the quarter, and it supports our strategic targets on reduced greenhouse gas emission.
The fixed cost trend remains flat, in line with the announced targets of beating inflation by around $300 million run rate by 2023. Working capital days increased in the quarter on a rolling basis, both seasonally and in this quarter, in particular driven by deliberate commercial management of inventory levels relative to pricing in an environment with favorable upgrading margins, while the absolute working capital levels in Q4 were significantly reduced. As communicated at the Capital Markets Day last year, the new version of the Improvement Program is focusing on the underlying value drivers to better reflect the value creation. As also communicated at that same day, we will reconcile on an annual basis the Improvement Program performance to our reported EBITDA to demonstrate the link to bottom line. For 2019, the impact was roughly $120 million, with $95 million hitting the bottom line.
If we look at the P&L for the year, lower revenues were due to lower fertilizer prices, but European gas costs contributed to improved margins, and we also saw improved product mix and currency effects. If we look at the foreign currency translation loss, this reflects a loss on the U.S. dollar, denominated debt positions, and internal positions in other currencies than U.S. dollar. The interest expense increased mainly due to IFRS 16 and interest on tax provisions, which is also found in the notes to our financial statements. High results and a tax provision of roughly $40 million gives an effective tax rate of 27%. If you look at the balance sheet, the implementation of IFRS 16 as of the 1st of January 2019 increased our non-current assets with roughly $450 million.
The disposal group held for sale of $175 million, classified as current assets as of the 31st of December 2018, is disposed of during 2019. The IFRS 16 also increased non-current liabilities with $344 million, and current liabilities with roughly $90 million. The decrease in current liabilities reflects the maturity profile of interest-bearing debt with fewer maturities in the coming 12 months. Capital discipline has been a recurring theme for Yara, and Yara has not announced any new large expansion projects since 2016, and this was also a topic that we had particular focus on during the Capital Markets Day last year. This materializes in the CapEx pipeline, where we came in at $1.1 billion versus the $1.3 billion commitment guiding in Q3 due to strict capital discipline. At the same time, we maintain the committed levels previously guided for 2020 and 2021.
As to the CapEx commitment for 2020, it is helpful to note that our underlying maintenance CapEx is in line with our peers, and that the total $0.6 figure also include CapEx from the part of our portfolio not reflecting normal maintenance of nitrogen production. A strong cash flow in the quarter from lower investments and higher cash earnings contributed to a reduction in net debt to around NOK 1.7 at the end of the quarter. As previously communicated, the board, in line with our capital allocation policy, provides a dividend of NOK 15 per share, and a buyback in Q1 of approximately NOK 3 per share. Yara's guiding on energy cost is based on the externally observed forward curves and expected energy consumption gas purchase terms at Yara's production sites.
As such, the effect stated in the report is based on the forward curve at that date and will change as market prices evolve. We positively note that the European forward prices have continued to decrease, and that the forward markets see prices staying lower for longer, which of course benefits Yara. With that, I hand it over to Terje to go through our commercial performance.
Thank you, Lars. A very good morning to all of you. Before commenting on the actual numbers, I would like to provide a little context. The fertilizer markets have been supply driven during second half of 2019. Not only absolute price levels, lower than last year, but maybe more importantly, the price for commodity nitrogen and phosphate has been negative throughout the first part of this season, while the trend was quite different last season. This has had a negative impact on deliveries in the quarter. In Europe, Yara's deliveries were 8% lower, the same development as the total industry and nitrogen industry deliveries. Yara's season to date deliveries are 6% lower than the previous season, while total nitrogen deliveries are down 9%. In addition, our deliveries of commodity products in Brazil were down, resulting in a 5% decline in sales and marketing's total deliveries.
In spite of the lower deliveries, the financial performance in the quarter is good. As pointed out by our CEO earlier in the presentation, we have been able to take out some of that volatility in commodity prices by proper segmentation, and a firm pricing strategy. While urea prices have been down around 20% and DAP even more, our revenues were down only 14%, which contributed to high margins that partly offset the impact of lower volumes. Margins have, in addition, improved as a consequence of better product mix with a higher share of premium products. In addition to higher margins, we have also taken out costs, delivering on our fixed cost targets and benefited from a stronger U.S. dollar. Let me go through some of the regional developments.
As already mentioned, fourth quarter deliveries in Europe reflect the supply-driven market and the negative price trend in global commodity nitrogen markets at a time when fertilizer application is still three to six months away. While the price trend has impacted volume, our ability to keep pricing in a declining market has resulted in improved margins. In Brazil, deliveries for premium products were in line with last year, while commodity deliveries were down 8%, reflecting implementation of what we call the premium first, commodity right strategy. The development in Latin America was negative in fourth quarter, in isolation, with premium product deliveries down 9% and commodity deliveries 25% lower. However, as we have mentioned earlier, the reduction in commodity deliveries is to a large extent wanted. While we do not consider the premium product development to be structural.
We have, during the last year, made good progress in making our operation in this region more robust and profitable, partly by reducing cost levels. We remain firm in our belief that Latin America will be a key growth carrier for Yara in the years to come. Our operations in Africa remain small in a Yara context. The challenge in Africa is to reach critical mass and get scale running a premium business. We have therefore made certain restructuring efforts and revised our strategy in several of the African markets to adapting to the situation in these markets. These restructuring efforts have paid off in 2019 as the profitability for our African business has improved considerably. Although the improvements are not volume driven primarily. Again, we focus on value over volume. As mentioned already, 2019 has been a challenging year for ag markets in general.
Fertilizer markets remained supply driven, reflecting negative factors on both demand and supply side. These factors have clearly impacted our ability to grow volume-wise. While premium products deliveries increased only 1%, we were able, as illustrated earlier, to extract value in a different and difficult market. To add to the positives, as you can see, we continue to grow our deliveries of YaraVita product range at high speed. In case you are new to the story, the YaraVita range are our premium fertilizers for foliar application, a high margin, but knowledge-intensive solution. All in all, we have improved EBITDA per ton by around 20% in a year that clearly can be categorized as difficult, which makes us confident on our strategic direction, and our medium to long ambition communicated at our Capital Markets Day.
Before handing over to Svein Tore again, I would like to give an update on the progress we have made in digital farming, a key strategic pillar in order to deliver on our targets. Svein Tore has already given you an update on the open platform initiative with IBM, and also the video which shows how we work with PepsiCo on potatoes in among other markets, India. This might be seen as complete separate topics, there are clear links and interdependencies. There is value to be captured by bringing solutions to the food companies. Not only providing productivity and quality, but not at least sustainability through, for instance, traceability. With few exceptions, data and digital represents an important ingredient in these solutions, which is why access to data is vital to succeed.
Focus so far has been to develop tools and services based on our own data and knowledge, and the status 2019 is that we are very happy with the progress that has been made, both in the professional as well as in the smallholder segment. Focus so far has been to bring our digital services to scale and to establish a digital relationship with farmers to build a user platform that we can continue to expand on. We have clearly proven our ability to get reach and adoption out there. In the professional markets, we grew more than 320% to reach 10.4 million hectares, or 26 million acres of farmland under management, with particularly strong growth in Latin America. We were therefore able to achieve our 2020 target of 10 million hectares already in 2019. We are currently reaching around 25 countries with our digital offers.
In the smallholder markets, we were able to launch our first scalable digital solutions in 2019, and with very encouraging success. In less than six months after the commercial launch in second half 2019, we were able to build a user base of 750,000 farmers, growing with 5,000- 10,000 users per day. This is achieved basically in a launch in India and Kenya, actually before rolling out these solutions globally. We are presently testing commercial models and will continue to do so throughout 2020. Value creation short term comes therefore primarily indirectly through increased sale of premium products, primarily in Brazil as of now. In 2019, this amounted to $11 million, while direct digital revenues amounted to $5 million. With this, I would like to hand over to Svein Tore, who will give his closing remarks.
Thank you, Terje. Running often, we continue to view our prospects to be attractive. Firstly, the industry fundamentals. We're a growing population, and agriculture's resource and environmental challenges create business opportunities for Yara, as I touched upon earlier in my presentation. Better crop nutrition solutions are key to addressing this and responding to the challenges and turning them then into opportunities. In addition, the market cycle is improving with supply side pressure easing, while demand fundamentals are positive due to a tightening situation, especially for grains. Our cash flow is improving, and this is both due to the cyclical improvement, but also that our strategy execution is delivering improved cash flow from operations while our CapEx is declining significantly. Finally, we have a very strong competitive position with a full focused and sustainable long-term strategy to deliver long-term returns.
With that, I will then hand over to Thor, who will hand the Q&A session.
Okay. We are just setting up for the Q&A session, where the three presenters plus IR will be available. I'll just join over here. If you have a question, please raise your hand. We have either side, my colleagues, Thomas, to my right and Celia to my left, who will hand you a microphone as and when you have a question. Would anyone like to start? I have received a question actually by text from one of the analysts who's not here. I can start with them to warm up. The first question is that our run rate fixed costs are right now lower than our long-term target, and the question is whether we keep them there or whether the target is still the one that people should put in their estimates.
Yeah.
I'm guessing this is maybe one for the CFO.
Sounds like it. We're of course pleased that we are below that target level at this point in time. We haven't changed the target as such. Of course, and needless to say, we are working every day to improve as much as we can.
I'll keep a look out if there are others from the audience, but there were three questions in this one. The next one was, how important is the Pilbara plant in Australia to meet our long-term target of eight and a half million tons of ammonia production?
I can take that. The total output from the Pilbara plant is around 800,000 tons. We have experienced operational issues at the plant, and they've been dealt with one by one. We had an unfortunate incident at the beginning of November after, actually, the organization are having a long stretch of production at the plant at really good energy efficiency levels. We had an issue with the cooling tower that we're now rebuilding. I'm actually, after this presentation, heading over to Australia, and I'll be in Pilbara next week. There is a lot of good work happening there to reconstruct and to deal with issues. Over time, we will reach stable operation in Pilbara as well. Now, given the ammonia prices at the moment and the gas cost, the impact is fairly limited now.
Definitely, this is part of the program to reach the 8.5 million tons. Definitely.
Okay. I'll, at this point, give credit to the person who's asking the question to make sure we don't have a quiet Q&A. This is Bengt Jonassen from ABG Sundal Collier who's asking the questions. The next one is the lower deliveries in Europe. Is this a delay or is it a structural issue, for example, linked to new nitrogen regulations in Europe?
I would say we had a slow fourth quarter, not unexpectedly, and what we see is a typical shift now a bit on the buying pattern. We actually believe that we will come back during the spring. We have a healthy order book as we speak, and there might be a slight decline in the market, but generally we are positive to the outlook for this spring. The nitrogen regulative is actually positive for nitrates, because what is happening is that Germany, for instance, has made regulation where you cannot broad or spread urea. You have to either have it with inhibitor or embedded in the ground which means that nitrates are likely to grow and urea is likely to decline in a huge market like Germany. This obviously is a positive factor for a company like Yara that is more focused on nitrates.
We have a question in the audience.
Andreas Bertheussen, Kepler Cheuvreux. Just to touch a little bit on the digital approach. Obviously, you got some very strong traction there. I was wondering if you could elaborate a little bit on what business models you are looking into with a fairly large user base, especially on the smaller farmers. Can you open up a little bit about alternative business models you can see, perhaps not now, but into the future to monetize this?
I can at least say a little bit about sort of how we think. As we said in the presentation, the focus now is really scale. We have been looking for what could be what we call a hook with farmers. There are many farmers, particularly in the smallholder segment, that are not sufficiently aware that they need crop nutrition knowledge. Everyone is aware that the weather is affecting their fields. What we have done is to launch a hyperlocal weather app that provides very specific information to that farm. That is relevant to many farmers around, and growing fast. We have a lineup of applications connecting to the farm weather. One is Farm Forecast. Another is something we call Farm Health, where we incorporate more and more of the crop nutrition knowledge that we have. These solutions will, for instance, be on subscription models.
We are also teaming up with some telecom companies, et cetera, to find models on how we can, in a practical way, generate value from the many smallholders that we will reach. Where we are encouraged is that we see that this is scaling on itself, which obviously in any digital solution is immensely important. As I mentioned, we have launched it in India and Kenya, basically, and we are now approaching a much more wide rollout. At the same time as we build this more, let's say, crop nutrition-related applications.
Just to add on that, it's also about creating traceability and transparency. There is a big move now in the general markets for food consumption as well to have a better understanding of the environmental or carbon impact of the food that we consume. Today, it's very difficult or impossible to track that fully. Through digital technology, it is possible to trace and then through that pay the farmer a fair price. Today, farmers are not being paid a fair price for sustainable farming. That's something that should be done, and it is possible. There are huge losses in the whole value chain of food production as well. Over time, this is really self-financing through reducing losses, but also incorporating all the externalities.
Just to put it in a broader perspective, the total market value of the food system today is $10 trillion annually. There are some external costs related to health and environment and socioeconomic benefits that's a cost. That's $12 trillion negative. The net negative is $2 trillion of the food system today, according to the Food and Land Use Coalition report. If you can change some of these costs into benefits for the farmer, that gives better farmer income, enabling the farmer to pay for higher quality input, which in turn would support our business model and the farmer.
Thanks. If I may follow up on the regulatory topic here. You are addressing the fact that deforestation is a big part of the CO2 emissions for the agriculture space in general. Of course, then alluding to more focus on premium products, digital farming as a solution. My impression is that within the regulatory system, especially in the EU, they are more focused on fertilizer production as being a CO2 emitter without looking at perhaps the broader picture. Do you agree with this? Are you seeing risks that in this ESG environment we're currently heading deep into, that fertilizer producers will be observed as a problem, and that volumes overall needs to come down?
It's a very fair statement. Obviously, we do consume a lot of natural gas in our production processes, and we are working to reduce our emissions. In fact, we have reduced our greenhouse gas emissions by 50% compared to 2004, and we have a target to reduce another 10% by year 2025. We're also testing out models even for fossil-free fertilizer production in cooperation with the Swedish Lantmännen. This is possible, but it has to be also affordable for the farmers. That's where it's important to look at this holistically. Yes, there are emissions from producing fertilizer, but the impact on more efficient agriculture means more land available for nature. The net of this is positive. When it comes to regulation, yes, there are new legislations out there, more to come.
I think it's important that we put in place systems that incentivize the farmer to farm more sustainably, to support them, rather than to put restrictions on them. That's why it's necessary to see this holistically. If you see the new proposals for agriculture policy in the U.K., for instance, you see this well illustrated, where they are talking about having a system in place that incentivizes sustainable farming, which is something that we fully support and work with through our business model.
If I can link that a bit to digital, this is one of the reasons why precision farming is important and why it is important that we are in the forefront on how you basically can produce more with less, also in a very intensified agriculture like we have in Europe.
Thanks.
Okay. It seems like the idea of sending questions by text is catching on. I've got a couple more here. I think we are close to probably needing to round up, but I will try with two, and then we will have to think about how we manage this going forward. I will just ask them both, and then we can. There is one on nitrates. Can you talk to current nitrate markets? Prices are lower, but how do upgrading margins look into first and second quarter? The second is, can we give more detail on what is driving the delays in Brazil on Rio Grande and Salitre?
On nitrates, I think as you have seen from what we have presented today, we have been able to maneuver through third and fourth quarter in a way that we have captured a, I would say, good margin and a good upgrade on nitrates. We are now approaching full season. We can have an early season, at least January in Norway it looked like we would have one, but everyone knows that can change tomorrow. Exactly when the demand comes really strong onto us remains to be seen. Normally, in such a setting, we are able to keep prices, because now it's about application. It's not to the same extent about buying fertilizer. Then it really depends whether you have an early or late season, when we get into a new price scheme, which, as everyone know, we would typically reach towards the summer.
I would say so far we are pleased with order book and also with the way the market now moves.
On the Brazil question, when it comes to Salitre, we are addressing some issues with the beneficiation process and also with the chemical engineering. When it comes to Rio Grande , it's simply a matter of we're seeing this project takes a little bit longer to complete. I think we can also share some more details on that during the investor call this afternoon.
Okay. On that note, if there are no further questions, there is one more opportunity today. There's always more opportunities, at 2:00 P.M. Oslo time, we have the conference call that anyone is free to dial into. With that, thank you for attending this morning's presentation.