Canadian potash producer Nutrien sees record earnings as Ukraine war drives fertilizer demand | CBC News

Nutrien Ltd. has considerably hiked its earnings forecast for the 12 months after saying a report first quarter revenue pushed by surging commodity costs and considerations about world meals safety as a result of Russia’s invasion of Ukraine.

The Saskatoon-based firm, which is the world’s largest producer of fertilizer and experiences in U.S. {dollars}, earned a report $1.4 billion US within the quarter ended March 31. That works out to $2.49 per share, greater than 10 occasions the 22 cents per share it earned in the identical interval of 2021.

Nutrien additionally hiked its earnings steering for the total 12 months 2022 by 50 per cent. It mentioned Tuesday it now expects to earn between $16.20 and $18.70 per share this 12 months, up from a earlier goal of $10.20 to $11.80.

Nutrien — which was created in 2018 because of the merger between PotashCorp of Saskatchewan and Calgary-based Agrium Inc. — has seen its share value enhance by greater than 20 per cent for the reason that first of March as a result of impression of geopolitical occasions on fertilizer markets and costs.

Based on the corporate, Russia and Belarus account for roughly 40 per cent of world manufacturing and exports of potash, a key plant nutrient utilized in agriculture.

Monetary sanctions imposed on Russia and Belarus as a result of struggle in Ukraine imply that potash exports from the area had been roughly 20 per cent decrease within the first quarter of 2022 in comparison with the identical interval in 2021.

“There is no easy or quick resolution to beat this degree of provide disruption,” mentioned Nutrien interim CEO Ken Seitz on a convention name. (The corporate has not but named a everlasting substitute for former CEO Mayo Schmidt, who stepped down in January after simply 9 months on the job.)

“We imagine these points might prolong properly past this 12 months.”

Nutrien has over 20 million tonnes of capability at six potash mines in Saskatchewan. It additionally has two massive phosphate mines within the U.S., and is the world’s third-largest producer of nitrogen. Potash, phosphate and nitrogen are the three predominant plant vitamins utilized in industrial fertilizer.

For 2022, Nutrien mentioned it expects to supply between 14.5 to fifteen.1 million tonnes of potash. This displays the corporate’s March announcement that it’ll enhance potash manufacturing capability by almost a million tonnes to assist meet world demand.

Manufacturing would possibly broaden

Nevertheless, Seitz mentioned Tuesday that the corporate is presently exploring the feasibility of increasing manufacturing much more. He mentioned extra particulars might be forthcoming on the firm’s investor day on June 9.

“We’ll carefully monitor world market developments as we assess alternatives to extend our potash manufacturing functionality past 15 million tonnes,” Seitz mentioned.

“Growing manufacturing on a sustained foundation requires opening up new floor, putting in extra gear and infrastructure, hiring extra individuals and securing outbound logistics. These are selections that require cautious planning as they’ve long-term impacts on our operations and our individuals.”

In an e-mail, Edward Jones analyst Matt Arnold mentioned Nutrien has been cautious to not hurt fertilizer pricing by including an excessive amount of capability up to now, and mentioned he expects the corporate to stay disciplined with future selections as properly.

“We’d solely anticipate vital capability additions if the corporate is assured the Russia/Ukraine battle will impair Russia and Belarus exports on a extra sustained foundation, and never simply this 12 months,” Arnold mentioned.

Nutrien’s gross sales within the quarter totalled $7.6 billion, up from $4.7 billion within the earlier quarter.

The corporate’s share value was buying and selling at $137.05 within the early afternoon on the Toronto Inventory Change, up $9.22 or 7.2 per cent.

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