Nutrien blames late spring, rail delivery woes for Q1 net loss

A severe winter that slowed potash shipments to Canadian ports and caused a late start to planting season in Canada and the U.S. is responsible for a first-quarter net loss of $1 million, Nutrien Ltd. said Tuesday.

The company, formed at the start of the year from the merger of Potash Corp. and Agrium Inc., earned an adjusted profit of 16 cents per share in the three months ended March 31, missing analyst expectations for 20 cents per share.

Revenue was in line with expectations at $3.7 billion.

“As weather conditions started to improve in late April, we have seen a significant increase in (North American) daily retail sales revenues compared to the previous year,” said Nutrien CEO Chuck Magro.

“As a result, we expect the first half of 2018 retail EBITDA (earnings before interest, taxes, depreciation and amortization) to still exceed last year’s level.”

Nutrien says it expects better results this year despite the first-quarter setback and raised its earnings target to a range of $2.20 to $2.60, up two per cent.

Some of the weakness in the first quarter was attributed to rail transportation problems that prevented ontime deliveries, especially for potash, but both Canadian National Railway and Canadian Pacific Railway have improved service, said Raef Sully, president of Nutrien’s potash division.

However, labour strife may upset this outlook, as CP Rail conductors and engineers represented by Teamsters Canada Rail Conference are to vote on the railway’s final offer from May 14 to 23, a vote ordered by the federal labour minister to head off a strike.

“If there’s a strike, obviously, that’s going to hurt us,” said Sully. “About 80-85 per cent of our export volumes go by CP.”