Nutrien CEO sees re­bound ahead in fer­til­izer de­mand

Agri­cul­ture sup­ply firm low­ers yearly es­ti­mates in­clud­ing potash sales

The Peterborough Examiner - - BUSINESS -

SASKA­TOON—Nutrien Ltd. says global de­mand for fer­til­izer is weaker than an­tic­i­pated this year due to poor weather in North Amer­ica and off­shore buy­ers that have cho­sen to draw down their in­ven­to­ries.

As a re­sult, the Saska­toon-based com­pany has low­ered key es­ti­mates for 2019, in­clud­ing a fur­ther re­duc­tion on potash sales vol­ume fol­low­ing an ear­lier down­ward re­vi­sion is­sued in Septem­ber.

Nutrien’s potash sales for this year are now es­ti­mated at be­tween 11.6 mil­lion and 12 mil­lion tonnes, down 300,000 tonnes from Septem­ber, and one mil­lion tonnes lower than its es­ti­mate in July.

The agri­cul­ture sup­ply com­pany, which re­ports in U.S. cur­rency, also low­ered its es­ti­mate for ad­justed net earn­ings to be­tween $2.30 and $2.55 (U.S.) per share — down about 14.7 per cent from be­tween $2.70 and $3 per share in Septem­ber.

De­spite the near-term weak­ness in the fer­til­izer busi­ness, Nutrien said that it ex­pects de­mand will pick up in 2020 as crop prices im­prove and fer­til­izer in­ven­to­ries are de­pleted in the fourth quar­ter and early next year. Nutrien chief ex­ec­u­tive Charles Ma­gro told an­a­lysts that he ex­pects a strong re­cov­ery in de­mand next year as North Amer­i­can farm­ers put more land into pro­duc­tion, with corn and soy­bean prices higher now than at this point last year.

“We ex­pect im­proved farmer prof­itabil­ity and crop in­put de­mand next year, par­tic­u­larly af­ter the weather-in­duced re­duc­tions this year. All this bodes well for our busi­ness,” Ma­gro said.

Nutrien’s stock traded at $65.99 (Cana­dian) in mid­day trad­ing on the Toronto Stock Ex­change, up $1.16 or nearly 1.8 per cent.

Nutrien’s re­vised out­look was is­sued along with its third-quar­ter fi­nan­cial re­sults for the pe­riod ended Sept. 30, which in­cluded $4.13 bil­lion (U.S.) of over­all sales — up four per cent from $3.9 bil­lion a year ear­lier.

Net in­come was $141 mil­lion or 24 cents per share, which com­pared with a year-ear­lier loss of $1.04 bil­lion or $1.70 per share, in­clud­ing four cents per share of profit from dis­con­tin­ued op­er­a­tions.

CODIE MCLACH­LAN STAR ED­MON­TON FILE PHOTO

Nutrien’s es­ti­mated potash sales for 2019 are down 300,000 tonnes from Septem­ber and one mil­lion tonnes from July.

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