Farm retailer delivers cautious 2017 outlook

AGRIUM INC.

— resulting in a one to three per cent decline in nutrient demand and lower spending on seeds.

However, demand for grains and oilseeds is expected to grow by three per cent this year, more than half the annual average, Magro said.

Potash prices have languished around US$200 per tonne for the past year — from their highs of US$900 around 2008 — amid excessive global supply.

But after months of potash prices hovering around a 10-year low, drawdown on potash inventories has led to stronger demand into 2017, the company said. Agrium expects to produce between 2.4 million and 2.8 million tonnes of potash in 2017.

“We foresee a tight supplydemand situation through the spring,” Magro said.

“Our expectation is for global potash shipments to increase almost five per cent.”

The company saw in 2016 a full-year profit of US$592 million, a drop of 40 per cent from the US$988 million reported in 2015.

Agrium earned US$67 million, or 49 cents per share during the fourth quarter, a drop from the US$201 million, or US$1.45 per share it reported in the same quarter of 2015, largely due to lower year-over-year nutrient pricing, the company said.

Adjusted earnings came in at 68 cents per share, in line with analysts’ forecast.

However, it projected 2017 full year earnings between US$4.50 to US$6 per share; the midpoint of US$5.25, was below analysts’ average estimate of US$5.45. It saw particular strength in its retail sales, helped by the crop protection sales, especially the herbicide business.

The company is in the middle of a merger with fellow Canadian fertilizer giant Potash Corp. of Saskatchewan and says it is awaiting regulatory clearance from the U.S., China, Canada and India.

Agrium expects the deal to close in mid-2017. Calgary-based Agrium Inc., which is awaiting regulatory clearance for a merger with fellow Canadian fertilizer giant Potash Corp. of Saskatchewan, says “prices remain under pressure from last year’s record yields.”