Potashcorp misses expectations

SASKATOON — Potash Corp. of Saskatchewan Inc. failed to hit analysts expectations in the fourth quarter, but CEO Bill Doyle said 2013 will be a much better year for the company.

“As we look ahead we see tremendous potential for earnings growth,” Doyle said in a conference call.

The Saskatoon-based fertilizer giant had a dismal fourth quarter as profits fell 38 per cent with revenue for the quarter at $1.64 billion, down from $1.86 billion a year earlier.

It’s net income was $421 million US, or 48 cents per share, in the last three months of 2012. Analysts surveyed by Thomson Reuters were, on average, expecting PotashCorp to post earnings of 57 cents per share.

During the same quarter of 2011, PotashCorp posted earnings of $683 million, or 78 cents per share. Doyle said delays getting contracts with China and India affected other customers, as well.

The company expects global potash shipments in 2013 to be between 55 million and 57 million tonnes — well ahead of the 51 million tonnes it shipped last year.

Canpotex, which markets potash abroad on behalf of the major Saskatchewan producers, finally reached a deal with a major Chinese customer about a month ago to sell one million tonnes of the nutrient at a reduced price in 2013.

That should act as a “catalyst” for other Asian countries to come to the table, Doyle said.

PotashCorp forecasts its 2013 sales will be between 8.5 and 9.2 million tonnes.

“WE SEE TREMENDOUS POTENTIAL FOR EARNINGS GROWTH.”

CEO BILL DOYLE

The company provided earnings estimates for the first quarter of 2013 and the full year, calling for between 50 and 65 cents per share in the three months ending March 31 and between $2.75 and $3.25 per share for the full year.

The company is nearing the end of a multi-year expansion and at the end of 2013, PotashCorp will have the operational capability of producing 12.4 million tonnes.

Doyle said more than 80 per cent of the anticipated spending on expansion is “now behind us,” and that expansion gives greater flexibility to meet market demands.

“Our expanded operation capability has created an important surge capacity in our system. This will improve our ability to meet the just-in-time needs of our customers as they ebb and flow through the year,” he said.

With the addition of 2,000 new rail cars in the system over the past three years and a new distribution centre in Hammond, Ind., the company is well-positioned to deliver in that market environment.