Agrium Sees Profit At Top End, Potash Corp. Cuts U.S. Prices

Canadian fertilizer maker and farm products retailer Agrium Inc. said it expects its second-quarter earnings to be at or near the top of its forecast range due to higher prices for some wholesale fertilizer products.

The Calgary-based company has forecast earnings from continuing operations at $4.18 to $4.78 per share, excluding one-time items. Analysts, on average, expected earnings of $4.57 a share, according to Thomson Reuters I/B/E/S.

“The outlook remains very positive, supported by the strong global grain prices and a balanced-to-tight international nutrient supply demand situation,” Chief Executive Mike Wilson said in a statement late Monday.

Meanwhile, the world’s largest fertilizer maker, Potash Corp. of Saskatchewan, cut summer warehouse prices of potash in the U.S. Midwest, arguably on soft demand, analyst Robert Winslow of National Bank Financial said Tuesday.

Potash Corp. posted prices of $510 to $520 per short tonne for granular potash, effective June 11, Winslow said, citing the industry newsletter Green Markets. The prices were 9% lower than company prices about a year ago, he said in a note to clients.

“The short-term low June prices is a likely farmer incentive during the light summer months,” Winslow wrote, adding that Potash Corp. also said it would restore some of the Midwest price cut on July 21.

Agrium, the largest farm products retailer in North America, more than doubled its dividend last week, less than six months after it quadrupled the semi-annual payout.

Agrium, also one of the world’s top producers of nitrogen-based fertilizers like urea and ammonia, is investing about $1.5 billion to expand its potash production capacity and capitalize on rising demand for the crop nutrient.

It is also expanding its farm retail network with the acquisition of the bulk of Viterra Inc’s retail assets, a $1.65 billion ($1.60 billion) side deal as Glencore International PLC acquires Viterra.

Agrium shares rose 1.2% to $79.63 on the New York Stock Exchange, while Potash Corp. added 0.3% at $37.67.

Leave a Reply