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Agrium fourth profits increased 32 per cent


February 8, 2012
By The Canadian Press

Feb. 8, 2012, Calgary — Fertilizer producer Agrium Inc. says profits
increased 43 per cent in the fourth quarter as it overcame a struggling
global economy that has affected commodity prices and made buyers
cautious.

Feb. 8, 2012, Calgary — Fertilizer producer Agrium Inc. says profits increased 43 per cent in the fourth quarter as it overcame a struggling global economy that has affected commodity prices and made buyers cautious.

The Calgary-based company, which reports in U.S. dollars, says profits rose to US $193 million, or $1.20 per share, up from $135 million, or 86 cents per share, in the same period of 2010.

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“These impressive results were achieved despite global economic uncertainties that impacted commodity prices and led to buyer uncertainty in the later part of the year,’’ said Mike Wilson, Agrium president and CEO.

“We believe that the underlying fundamentals for the agriculture sector remain strong as crop inventory levels for most crops remain well below normal levels and in some cases are critically low,’’ he said.
 
The results included an impairment charge of $61 million, or 30 cents per share, related to its investment in Hanfeng Evergreen Inc., the largest producer of slow and controlled release fertilizer in China and Indonesia.

Hanfeng reported a loss in its most recent quarter as production cuts for planned maintenance sharply reduced revenue. Agrium’s sales were up 32 per cent to $3.18 billion. Excluding that charge, net earnings from continuing operations would have been $374 million, or $2.34 per share.

The adjusted earnings beat analysts expectations. Analysts polled by Thomson Reuters were on average expecting earnings of $2.08 per share and revenues of $2.9 billion.

Agrium produces the three main types of fertilizer: nitrogen, phosphate and potash. It also sells farm products at retail outlets across North America, with a growing presence in South America and Australia.

Late last year it approved a one-million-tonne expansion to its Vanscoy potash mine in Saskatchewan. The project will increase capacity by 50 per cent at a cost of $1.5 billion. Construction is scheduled to begin this year and wrap up in 2014.

Currently, Vanscoy, Agrium’s only potash plant, accounts for three per cent of world potash capacity, making the company the 10th largest producer.

In December, Agrium also announced a quadrupling in its semi-annual dividend to 22.5 cents per share, reflecting a bullish outlook for its retail and wholesale businesses. The higher dividend started being paid on Jan. 19.

Full year net earnings were $1.4 billion or $8.68 per share, up from $713 million or $4.51 per share in 2010. Wilson said the company has a positive outlook about the 2012 busy season. “As the spring planting season approaches, farmers have a strong incentive to plant record acreage and optimize the use of Agrium’s full array of crop input products and services to maximize crop production,’’ he said.


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