Agrium Q2 Profit Climbs On Strong Demand, Prices - Update
2011-08-03 17:38:24
Canadian fertilizer firm Agrium Inc. (AGU: News ,AGU.TO: News ) reported Wednesday a 39 percent rise in second-quarter profit as robust demand and higher crop nutrient prices boosted its sales above Street projections. The strong growth was despite extremely wet conditions across the U.S. Corn Belt and Western Canada which delayed the spring season significantly, the company said.
For the second quarter, the Calgary-based company's consolidated net earnings grew to $718 million or $4.54 per share from $518 million or $3.28 per share last year.
Net earnings from continuing operations, excluding earnings from AWB Limited Commodity Management businesses, of which the majority was sold to Cargill, Inc. in May, were $728 million or $4.60 per share, 41 percent higher than last year.
The latest quarter results included a pre-tax share-based payment recovery of $10 million or $0.04 per share.
Adjusted net earnings from continuing operations would have been $721 million or $4.56 per share for the just concluded quarter.
On average, 20 analysts polled by Thomson Reuters expected earnings of $4.29 per share for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter climbed 40 percent to $6.20 billion from $4.43 billion in the prior-year period. Fifteen analysts' consensus estimate was for sales of $5.48 billion for the quarter.
Retail segment's sales grew 39 percent to $4.6 billion; due to robust demand for all crop inputs and related services globally, including strong benchmark prices for all major nutrients. In Wholesale, sales increased 54 percent to $1.7 billion with higher realized crop nutrient prices and excellent product demand which occurred later in the spring season.
Advanced Technologies also posted improved results due to substantially higher sales volumes of Environmentally Smart Nitrogen.
Agrium President & CEO Mike Wilson stated, "Despite this spring being one of the wettest and latest in history across much of North America, our diversity throughout the value chain enabled us to deliver record earnings. Growers in the Eastern U.S. Corn Belt and Western Canada in particular were not able to plant all the acreage, or apply all the nutrients, they would have liked to this spring."
Total gross profit climbed 58 percent from last year to $1.68 billion, while the growth was 44 percent in earnings before finance costs and income taxes to $1.05 billion, reflecting an 88 percent rise in expenses. Looking ahead, the company said that global crop and crop nutrient markets remain tight.