Nutrien CEO sees fertilizer demand rebound in 2020
Agriculture supply firm lowers yearly estimates including potash sales
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 Saskatoonbased 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 thirdquarter 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.