SASKATOON - Nutrien Ltd. (Nutrien) announced today its 2018 second-quarter results, with net earnings from continuing operations of $741 million1 ($1.172 earnings per share) and EBITDA3 of $1.5 billion.
HIGHLIGHTS
- Nutrien's second-quarter adjusted net earnings was $1.48 per share4, adjusted for purchase price allocation ($0.02 per share), merger-related costs ($0.02 per share), share-based compensation ($0.10 per share) and dividend income from discontinued operations ($0.17 per share). Second-quarter adjusted EBITDA5 was $1.6 billion, adjusted for merger-related costs and share-based compensation.
- Retail first-half EBITDA was up 10 percent over last year4 as a result of strong seed and crop protection product margins and excellent demand for crop inputs in the second quarter, demonstrating the value of our distribution network in a compressed season.
- Potash segment EBITDA was 34 percent higher in the first half of 2018 compared to the same period last year4 due to higher realized prices, strong offshore sales volumes and lower production costs.
- Nitrogen EBITDA improved by 17 percent in the first half of 2018 compared to the same period last year4 as a result of lower production costs, higher urea prices and increased sales volumes.
- Nutrien full-year 2018 adjusted annual earnings per share and adjusted consolidated EBITDA guidance were raised to $2.40 to $2.70 earnings per share and $3.7 to $4.0 billion, respectively (up from $2.20 to $2.60 earnings per share and $3.3 to $3.7 billion). The adjusted annual earnings per share guidance includes approximately $100 million in additional annual depreciation and amortization in phosphate and sulfate, related to the conversion of our Redwater phosphate facility to produce ammonia sulfate.
- Nutrien repurchased 29.3 million shares under its normal course issuer bid program year-to-date.
- Nutrien enhanced its digital ag and omni-channel offering with the recently announced acquisitions of Waypoint Analytical, Inc. and Agrible, Inc.
- Nutrien decided to close its small phosphate facility at Geismar, Louisiana, by the end of 2018 and will no longer require offshore phosphate rock imports starting in 2019.
- Nutrien agreed to sell its Sociedad Química y Minera de Chile S.A. (SQM) series A shares and its stake in Arab Potash Company (APC), and closed the auction of its SQM series B shares. Total net proceeds of required equity divestments are expected to be approximately $5 billion by the end of 2018.
- Nutrien has achieved $246 million in run-rate synergies as at June 30, 2018 and now expects to achieve $350 million in run-rate synergies by the end of 2018, up from the initial estimate of $250 million.
"Nutrien delivered strong second quarter and first half results, demonstrating the value of our integrated business model and extensive supply chain capabilities, in what was a very compressed spring application season. We also advanced our strategic plan, making significant progress on selling the remaining equity investments, repurchasing our shares and growing our Retail business," commented Chuck Magro, Nutrien's President and CEO. "We have raised our annual guidance due to firm market fundamentals; this, combined with our rapid pace of synergy realization and a strong balance sheet, will provide us with numerous options to enhance shareholder value," added Mr. Magro.
MARKET OUTLOOK
Agriculture and Crop Input Fundamentals
- Most U.S. crop prices have declined over the past quarter, driven by a combination of favorable U.S. crop prospects and uncertainty over escalating trade restrictions.
- The U.S. Department of Agriculture (USDA) is projecting an 11 percent decline in global grain ending stocks relative to last year. Key supportive fundamentals include an estimated 23 percent decline in projected U.S. corn ending stocks year-over-year, an 18 million tonne reduction in Russian wheat production and a significant decline in Argentine corn and soybean production in 2017/18.
- U.S. corn and soybean condition ratings continue to be above average. As a result, growers have invested in plant health and nutritional products to preserve yield potential.
- U.S. crops are developing at a significantly faster than average rate. This is expected to be positive for the fall fertilizer application window, but is still dependent on weather conditions through the fall season.
- Crop protection demand in the third quarter has been supported by missed pre-seed burn-off and resulting increased weed pressure in the U.S.
- Western Canada and Australia have recently received timely precipitation, which has provided support to crop input demand, however, there continues to be dry areas in both regions.
Click here to see more...