Saskatoon-based firm takes $587-million loss on phosphate fertilizer plants writedown
Posted November 3, 2020 9:15 am.
Last Updated November 3, 2020 9:18 am.
This article is more than 5 years old.
SASKATOON — The CEO of Nutrien Ltd. says strong growth in global food demand combined with promising harvest and fertilizing plans in the United States and elsewhere around the world bode well for the company going into 2021.
Chuck Magro says demand for fall fertilizer application in the U.S. is up as the harvest is well ahead of schedule and crop prices are rising on strong demand and lower production, while affordability is high for potash and nitrogen fertilizers.
The Saskatoon-based company, which reports its results in U.S. dollars, is less optimistic about long-term price prospects for phosphate fertilizers, however, and is taking an $823-million writedown in the value of that business related mainly to its two production facilities in Florida and South Carolina.
The impairment resulted in a third-quarter net loss of $587 million, compared with net earnings of $141 million in the same three months a year ago, while adjusted earnings before interest, taxation, depreciation and amortization fell 15 per cent to $670 million from $787 million.
Nutrien reported sales in the three months ended Sept. 30 of $4.2 billion, up from $4.17 billion in the year-earlier period.
Analyst Joel Jackson of BMO Capital Markets said in a report the results were “mixed,” with Nutrien beating the street on earnings but missing on adjusted earnings.
“While most companies and industries have seen an impact to their businesses due to the COVID-19 pandemic, agriculture has been more resilient than most and is now demonstrating real strength as we head into 2021,” said Magro on a Tuesday conference call.
“This underscores the consistent growth in global food demand even through a global economic and health crisis.”
Nutrien’s retail operations delivered 13 per cent higher adjusted earnings in the first nine months of 2020 as total sales through its digital platform, driven by the pandemic lockdowns, exceeded $1 billion.
That’s more than double the company’s goal of $500 million for the year and accounted for 43 per cent of North American sales of products available for purchase online.
This report by The Canadian Press was first published Nov. 3, 2020
Companies in this story: (TSX:NTR)
The Canadian Press
