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By Victoria Klesty
OSLO (Reuters) - Norwegian fertiliser-maker Yara posted stronger-than-expected profits on Wednesday as rising prices more than offset the increased cost of raw materials, while reiterating its worry that the war in Ukraine will hit global food supply.
January-March earnings before interest, tax, depreciation and amortisation (EBITDA), excluding one-off items, rose to $1.35 billion from $585 million a year ago, while analysts in a company-provided poll had expected profits of $1.14 billion.
But Yara also said it expected to pay $1.15 billion more for natural gas in the second quarter than a year earlier, and $750 million more in the third quarter.
The price of natural gas, which is used in the nitrogen-containing fertiliser manufacturing process, hit record highs following the Russian invasion of Ukraine, pushing fertiliser prices higher throughout March.
Yara's revenues almost doubled in the quarter to $5.9 billion from $3.1 billion a year ago, tracking a dramatic rise in fertiliser prices amid fears of global food shortages.
The company has warned that because a quarter of Europe's supply of key crop nutrients nitrogen, potash and phosphate come from Russia, the continent's food production could be constrained.
"Although Yara's business is flexible and resilient, the impact of the war on global food security will be dramatic," Chief Executive Svein Tore Holsether said in a statement.
"We repeat our calls for government action to strengthen food supply chains and decrease dependency on Russia."
The Oslo-listed company, which is one of the world's biggest fertiliser producers, curtailed ammonia production at two of its European sites in March in response to high gas costs, but has since restarted production.
Yara's share price has risen 3.4% year-to-date.
(Reporting by Victoria Klesty; Editing by Terje Solsvik and Edmund Klamann)