Potash Corp. says new taxes will clip outlook
Potash Corp. of Saskatchewan Inc. cut its full-year earnings outlook on Thursday due to increased Saskatchewan potash taxes and weaker-than-expected first-quarter performance.
Nonetheless, chief executive Jochen Tilk tried to put a positive spin on the market conditions.
“Looking ahead, we are encouraged by the strength in global potash demand and see momentum accelerating through the second quarter, especially in offshore markets,” he said in a statement.
The 2015 guidance was reduced to between $1.75 US to $2.05 US a share, down from the prior level of $1.90 US to $2.25 US.
Potash Corp. said the recent tax increase announced by Premier Brad Wall’s government should cut profit by roughly seven cents US a share this year, while lower prices, volumes, or shifts in the sales mix of its nutrient businesses should lower profit by an additional 10 cents US.
The company’s firstquarter earnings were $370 million US, or 44 cents US a share. That was up nine per cent on the prior year’s result, but was well below the consensus analyst estimate of 55 cents US.
Potash Corp., the world’s biggest fertilizer company, noted that potash demand eased slightly in the first quarter.
A Chinese contract settlement took longer than expected, demand weakened in Brazil, and the spring planting season got off to a slow start in North America.