Nutrien CEO: 2020 will see strong recovery from this year’s soft fertilizer demand

Nutrien CEO: 2020 will see strong recovery from this year’s soft fertilizer demand
Share this article

SASKATOON — Nutrien Ltd. says global demand for fertilizer is weaker than anticipated this year due to poor weather in North America and offshore buyers that have chosen to draw down their inventories.

As a result, the Saskatoon-based company has lowered key estimates for 2019, including a further reduction on potash sales volume following an earlier downward revision issued in September.

Nutrien’s potash sales for this year are now estimated at between 11.6 million and 12 million tonnes, down 300,000 tonnes from September, and one million tonnes lower than its estimate in July.

The agriculture supply company, which reports in U.S. currency, also lowered its estimate for adjusted net earnings to between US$2.30 and US$2.55 per share — down about 14.7 per cent from between US$2.70 and US$3 per share in September.

Despite the near-term weakness in the fertilizer business, Nutrien said that it expects demand will pick up in 2020 as crop prices improve and fertilizer inventories are depleted in the fourth quarter and early next year.

Nutrien chief executive Charles Magro told analysts that he expects a strong recovery in demand next year as North American farmers put more land into production, with corn and soybean prices higher now than at this point last year.

“We expect improved farmer profitability and crop input demand next year, particularly after the weather-induced reductions this year. All this bodes well for our business,” Magro said.

Nutrien’s stock traded at C$65.99 in midday trading on the Toronto Stock Exchange, up $1.16 or nearly 1.8 per cent.

Nutrien’s revised outlook was issued along with its third-quarter financial results for the three months ended Sept. 30, which included $4.13 billion of overall sales — up four per cent from $3.9 billion a year earlier.

Net income was $141 million or 24 cents per share, which compared with a year-earlier loss of $1.04 billion or $1.70 per share, including four cents per share of profit from discontinued operations.

This report by The Canadian Press was first published Nov. 5, 2019.

Companies in this story: (TSX:NTR)

The Canadian Press

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.