Welcome to Yara's fourth quarter result presentation. Today's presenters will be our CEO, Svein Tore Holsether, and our CFO, Thor Giæver. There'll be a conference call at 1:00 P.M. Oslo time where you can dial in and ask questions. With that, it's my pleasure to hand over to Svein Tore Holsether.
Thank you, Maria. Good morning, good afternoon, and good evening. Thanks for dialing in. As always, we start by looking at our safety performance, where we're at a stable and low TRI level. It's the third year in a row now where our TRI is between 0.9-1.1, which is industry-leading. When you consider the difficult operating environment, this is very solid. Unfortunately, we did see an increase in the fourth quarter, and this relates to incidents with a lower severity, but still this concerns me. TRI of 1.1 is a ratio. It does translate into 60 accidents, meaning 60 of our colleagues were injured at work. Together with my colleagues, I go through all of these incidents in detail, and I can only conclude that all of them are avoidable. We continue to work towards zero injuries. It is absolutely possible.
Turning to the main elements of the fourth quarter. EBITDA for the quarter is $586 million, and this is down from last year when market prices were much higher. But we see a significant improvement since second quarter, and also compared to pre-2022 levels. Yara's fertilizer deliveries were up compared to last year, despite a slow market with reluctance to take positions across the value chain. Full-year cash flow for 2023 is $1 billion, demonstrating that our cash flow is resilient, also in a lower margin environment. Operating capital for fourth quarter increased as expected due to seasonal buildup of inventories and also lower payables. At the start of 2024, we have seen increased buying activity and prices, signaling potential volume catch-up for first half of 2024 as we enter into the main application season.
Finally, according to our capital allocation policy, Yara proposes an annual dividend of NOK 5 per share for 2023 to be paid after approval in the annual general meeting. Our earnings have been significantly impacted by market volatility in recent years, as you can see in this chart. 2023 has, in general, been a challenging year, and margins for most of 2023 have been lower, also compared to earlier years. However, we have seen an improving trend since summer, and EBITDA for fourth quarter is in line with pre-2022 levels. The EBITDA improvement comes despite the lower deliveries, reflecting an underlying margin improvement in fourth quarter, mainly due to improved ammonia and NPK margins. Although EBITDA is down 65% for the full year, cash from operations is stable year-over-year.
This shows the robustness of our cash generation as lower prices and margins are typically offset by a release of operating capital, an effect we've seen also in previous periods with significant margin shifts such as 2008-2009. Combined with strict CapEx prioritization, this has delivered a full-year free cash flow of $1 billion, a comparable level to recent years despite a clearly more challenging margin environment. Yara's capital allocation policy remains firm with an overarching objective to maintain a mid-investment-grade rating. As you have seen, 2023 has been a challenging year both operationally and earnings-wise, and we ended the year with our net debt to EBITDA slightly out of our target range of 1.5-2 times. However, with the improved margin trend, we absorb a fourth quarter run rate net debt to EBITDA rate of 1.6, well within our target.
On this basis, Yara proposes an annual dividend of NOK 5 per share for 2023, representing 43% of net income, excluding currency and special items. With that, I will now hand over to our CFO, Thor Giæver.
Thank you, Svein Tore. So as we've already seen, our earnings are lower year- over- year, mainly due to lower margins, a similar pattern to what we've seen throughout 2023. The decline is stronger for earnings per share compared with EBITDA, as our net income last year also benefited from a significantly higher foreign currency exchange gain compared to 2023. Our return on invested capital for the last 12 months is down from 25.7% in 2022 to 2.9% in 2023, again mainly reflecting the lower margin environment compared with the stronger levels in 2022. However, as Svein Tore mentioned, results and margins have improved sequentially during the second half of 2023. For the quarter in isolation, we have a return on invested capital of 8.1%, making this the best quarter in 2023, also in terms of returns.
Operating cash flow for the quarter was positive but was partly offset by a seasonally normal increase in operating capital. Investments increased in line with our guidance, mainly related to production-related maintenance and projects. Turning to the variance analysis, although total deliveries were slightly higher than a year earlier, we had a slight negative mix effect due to lower deliveries of ammonia produced outside Europe, lower industrial product deliveries, and lower NPK deliveries. The year-over-year margin decline is the main driver for the lower results, with a pure price effect of almost $1 billion, partly offset by roughly 40% lower energy costs. Now, using Yara's published sensitivities, you may have modeled an even larger negative price effect, but this was dampened by the significant curtailments and negative position effects due to declining prices that we saw in the fourth quarter of 2022.
So the full sensitivity impact did not feed into our results. And then on the other variance, this relates mostly to other income items not classified as special items, mainly a $10 million insurance compensation and $5 million of white certificate sales that we've generated in Italy. So looking at the results by segment, the lower margins are reflected across all commercial segments and regions. In Europe, EBITDA was 69% lower as lower selling prices more than offset lower feedstock costs and 6% higher deliveries. In Americas, industrial solutions and clean ammonia, these were all impacted by lower deliveries in addition to lower margins. For Africa and Asia, deliveries increased, but results were negatively impacted by lower margins and deliveries from our ammonia plant in Pilbara, Australia.
For global plants, EBITDA was in line with a year earlier as higher production volumes due to improved reliability and lower curtailments were offset by higher fixed costs. Total deliveries were slightly up compared to one year ago, reflecting a slow market where all parts of the value chain were reluctant to take positions. Crop nutrition deliveries increased 4%, mainly reflecting higher commodity product deliveries compared to the situation a year earlier with significant curtailments in Europe. The 13% increase in Africa and Asia reflects Asia demand picking up ahead of application season and recovering compared with a weak demand in the quarter a year earlier. The increased crop nutrition deliveries were partly offset by lower deliveries of industrial and ammonia volumes, reflecting lower downstream industrial and fertilizer demand.
Our net debt increased approximately $450 million this quarter as the seasonal operating capital build and increased investments more than offset strong cash earnings. The other item includes new leases of around $60 million, fair value adjustments, and currency effects on debt due to weakening of the U.S. dollar versus Norwegian kroner during the quarter. All of this brings our net debt to EBITDA ratio to 2.16 and net debt to equity ratio to 49% at the end of this quarter. Fixed costs for core business for 2023 has developed in line or even below inflation. This on a provisional basis as some of the reference inflation data for 2023 is not yet available. For 2024, our target remains to keep fixed costs in core business in line with inflation, while for the portfolio units, we aim to reduce costs through strict prioritization.
Further cost optimization is planned for 2025 based on expected value creation across plants, markets, new business areas, and portfolio units. Our total capital expenditure for 2023 of $1.2 billion came in at the lower end of our guidance from third quarter, where we reduced the guidance from $1.7 billion to $1.2 billion-$1.4 billion. The reduction in guidance was related to uncommitted growth projects that we chose not to execute. For 2024, we remain firm in our capital allocation policy with a net frame of $1.2 billion in real 2022 terms. 2024 spend is focused on maintenance and reliability investments in our core plants, together with a portfolio of premium product expansion projects and decarbonization projects. Turning to our operational performance, we have higher operating rates compared with a year earlier when significant curtailments were in place due to the energy situation.
For ammonia, we've seen consistent performance across most assets, and for finished products, the performance across several key sites has been strong, as you can see in the improvement during the quarter. We've made significant improvements in GHG intensity, driven by better reliability and fewer curtailments in the second half of 2023. In December, we reached an intensity of 2.8 tons of CO2 per ton of nitrogen, which is almost at the targeted level for 2025. Operating capital days increased towards the end of the year as expected as the price effect lifted inventory days during this period. In 2023, we had a decreasing trend towards the end of the year. But overall, the 2025 target of 92 days remains within reach. Now, let's take a look at our full-year P&L statement.
First of all, the price decline compared to last year or the year before is due to the significant price shift, as we had a high price environment in 2022 and decreasing in 2023 as we see this reflected in both revenues and raw material costs. Operating income is significantly lower, mainly due to lower margins, but also due to impairment loss, mainly for the Tertre plant in Belgium. The increase in payroll expenses mainly reflects normal salary adjustments for the year. For 2022, we recognize the currency loss of $32 million as a loss on U.S. debt positions, partly offset by internal positions effects in other currencies. I said for 2022. It is, of course, for 2023. In total, our basic earnings per share decreased from $10.90 in 2022 to $0.19 per share in 2023.
Excluding currency and special items, the earnings per share in 2023 was $1.11, down from $10.98 in 2022. On the balance sheet, total assets were 28% lower compared to last year, mainly reflecting lower prices, which impacted both inventories and receivables. The change in equity mainly reflects our $1.3 billion dividend payment. Lower liabilities also reflect the lower price environment, in addition to lower prepayments in Brazil. All in all, we've kept a solid balance sheet in a year with challenging operating conditions and significant volatility. Turning to our integrated scorecard, we've already covered many of the key elements already, but I'd like to highlight a few more. Our engagement index and diversity and inclusion index score, both of these remain high but just below the threshold for our target to be in the top quartile.
We're studying these results, and we'll continue our work to reach and keep these targets. We had good progress also on our female senior managers indicator, up to 32% from 29% a year earlier, but somewhat behind target for the year but progressing towards the long-term target. Our Scope 1 and 2 GHG emissions remained stable amid continued curtailments, especially in the first half of the year. We've made further progress within GHG projects, and as mentioned, we've seen this in recent GHG intensity performance. Finally, we had a strong premium generation this year, above 2022 and significantly above historical levels. Taking a look at the market fundamentals, deliveries halfway through the season are lagging both in the EU and in the U.S. compared to normal. In addition, optimal application rates have increased compared to a year ago, further supporting farmer incentives as we approach the main application season.
Both of these factors indicate a volume catch-up during the first half of 2024. With that, I'd like to hand back to Svein Tore.
Thank you very much, Thor. Several of the key global trends form the backdrop of Yara's strategy. The climate emergency has been at the top of the global agenda for quite some time now. In addition, geopolitical uncertainty and the need to transform global food systems. All of this significantly impacts our business environment. Yara's strategy and key priorities are designed to both address these challenges and to seize the opportunities that they also provide. With a challenging energy situation in Europe and a strategic priority to decarbonize, Yara can strengthen its premium product core in Europe through low-carbon ammonia, reducing its exposure to European carbon taxes. In addition, low-carbon ammonia sourcing from outside Europe shifts our energy position away from uncompetitive European gas prices.
Since 2005, Yara has reduced emissions in our European system by approximately 55%. Now we're taking further steps to adapt to the low-carbon future. Our first major project to address this is the CCS project, Carbon Capture and Storage in Sluiskil, where FID was confirmed this year. And this is a groundbreaking project that positions Yara as a frontrunner for decarbonization in Europe. During 2024, fertilizer produced from green ammonia will be rolled out from our pilot plant in Porsgrunn. And this is a key learning project, providing invaluable experience for future green ammonia projects. In line with our strategy, we will also continue expanding our product portfolio to provide solutions that promote regenerative and sustainable agriculture, mainly through organic growth and partnerships. We will also continue to mature our blue ammonia projects in the U.S.
These are important large-scale projects which are carefully being addressed with FID planned for second half of 2025. Urea has more than 50% share of global nitrogen consumption. As a result of that, it's the most important product for global nitrogen prices. We do not expect this to change in the foreseeable future. However, urea physically contains CO2 as the production process, in simple terms, combines CO2 with ammonia to create urea. It's therefore a tall order to decarbonize urea. This means that the pricing of all nitrogen products in Europe, including nitrates and NPKs, will be based off a urea price which will be subject to carbon tax once CBAM is fully implemented. This creates a unique and profitable decarbonization opportunity for our premium nitrate and NPK products.
Unlike urea, nitrates and NPKs do not contain CO2 and can therefore be produced with a much lower carbon footprint using low-carbon ammonia as feedstock. For Yara's European production, with an annual need of 3.5 million tons of ammonia to produce finished fertilizer, switching to low-carbon ammonia feedstock can significantly reduce our emissions and carbon tax cost. The world is beginning to understand the importance of the food system in tackling the climate crisis, the need to protect nature and to focus on soil health. The only way we can achieve this transformation is to support farmers with both incentives and solutions to optimize their practices. Yara is uniquely placed to lead this transition. We have the agronomical competence with more than 1,000 agronomists working in the field with the farmers every day.
In addition, we have a product portfolio that supports farmers in optimizing their inputs, further complemented by precision farming tools. Let me be very clear. The world needs to act, and it needs to act now. Yara's decarbonizing pathway is maturing, and we are progressing on our project pipeline to profitably reduce emissions. But by being part of the solution, there is no doubt in my mind that Yara will continue to provide strong shareholder returns while also creating a fit-for-future Yara and also supporting a fit-for-future global food system. Thank you for your time. I will now hand back to Maria.
Thank you, Svein Tore. I'm just wrapping this up by reminding you once again about the conference call starting at 1:00 P.M. Oslo time. You can find login details on yara.com under Investors. That concludes today's presentation. Thank you for watching.