Reuters — Canadian fertilizer and farm retail dealer Agrium on Thursday reported quarterly profit jumped nearly nine per cent, as higher sales volumes and lower costs helped it buck the sector’s trend of weaker earnings.
Weaker currencies in fertilizer-buying markets such as Brazil and India are weighing down prices, leading rivals PotashCorp and Mosaic Co. to curb potash production amid falling sales and profits.
Agrium shares jumped about two per cent in New York and Toronto, as its bigger-than-expected profit provided a rare bright spot in the slumping sector. Shares of U.S. nitrogen-producing peer CF Industries, which on Wednesday reported a surprisingly large drop in profit, fell seven per cent in New York.
Agrium, North America’s biggest retail seller of seed, fertilizer and chemicals directly to farmers, narrowed its forecast for 2015 profit to $7.10-$7.40 per share from $7-$7.50. The range’s midpoint remained $7.25 per share.
Agrium, which produces nitrogen, potash and phosphate fertilizer, said it benefited during the quarter from higher wholesale sales volumes, although prices were lower. Agrium is ramping up potash production at its expanded mine at Vanscoy, Sask., southwest of Saskatoon.
Agrium has focused on lowering operational costs and benefited from low costs of natural gas, a key ingredient in nitrogen fertilizer production.
Expenses fell nearly 10 per cent to $505 million in the third quarter ended Sept. 30 from a year earlier.
The company’s net earnings from continuing operations rose nine per cent to $99 million, or 72 cents per share, helped by lower costs. Adjusted earnings of 71 cents beat analysts’ average estimate of 67 cents, according to Thomson Reuters I/B/E/S.
Sales fell 13.6 per cent to $2.52 billion, lower than the $2.87 billion analysts expected.
— Reporting for Reuters by Rod Nickel in Winnipeg and Sneha Banerjee in Bangalore.