With both expecting even more substantial improvements to come in the crop input market, Canadian fertilizer giants Agrium and PotashCorp have both reported higher third-quarter sales and profits alike.
Agrium on Wednesday posted net earnings of $57 million on $2.009 billion in net sales for its third quarter ending Sept. 30, up from $26 million on $1.844 billion in the year-earlier period.
PotashCorp on Oct. 28, meanwhile, posted Q3 profit of $402.7 million on $1.575 billion in sales, up from $247.9 million on $1.099 billion in the year-earlier period (all figures US$).
“Rapidly rising prices for a number of key crop commodities pushed our industry past the inflection point, as demonstrated by stronger demand and the beginning of pricing momentum for all nutrients, including potash later in the quarter,” PotashCorp CEO Bill Doyle said in that company’s release.
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
“Given the ongoing need to improve global food productivity and the significant void that must be filled after two years of reduced fertilizer movement and applications, we believe this quarter represented a meaningful step in our long history of value creation for our shareholders.”
Saskatoon-based PotashCorp, currently trying to fend off a hostile takeover bid from Australian mining giant BHP Billiton, emphasized in its Q3 report that its “long-term approach to business reflects our belief that time is one of our most powerful allies.”
“Looking ahead, we believe market conditions will provide an extended opportunity to show the full strength of our operations in all three nutrients — particularly potash — and to deliver substantially greater value to our shareholders,” Doyle said. “This is our time to demonstrate how our patient, long-term approach delivers returns for all stakeholders.”
PotashCorp said its potash segment delivered nearly two-thirds of the company’s quarterly gross margin and potash’s year-to-date total exceeded the contribution generated by all three nutrients — potash, phosphate and nitrogen — for the entire year of 2009.
“Even more evident”
Calgary’s Agrium, which on the other hand is working toward a friendly takeover of AWB Ltd., the former Australian Wheat Board, reported increased net sales in its retail division’s crop nutrient and seed businesses, and in its wholesale phosphate and potash segments.
The company’s advanced technologies division also reported increased net sales, due largely to higher sales volumes for its Environmentally Smart Nitrogen (ESN) and the transfer of Agrium’s turf and ornamental business from the retail division late last year.
“We believe the outlook for Agrium’s products and businesses are as good as they have ever been, supported by excellent fundamentals for the agricultural and crop input markets,” Agrium CEO Mike Wilson said in the company’s release Wednesday.
“While EBITDA (earnings before interest, taxes, depreciation and amortization) from our Retail operations this quarter was almost double last year’s level and Wholesale’s rose by more than 60 per cent, we expect the improvements in the crop input markets to become even more evident in the fourth quarter of 2010.”
Agrium, he said, expects strength in both crop input demand and prices to continue into the spring of 2011, “benefiting all three of our strategic business units.”
