A combination of higher volumes and higher prices on tight world fertilizer markets led fertilizer maker Agrium to a significant boost in its third-quarter profits, the company said Thursday.
The Calgary company posted net earnings of $51 million on $1.04 billion in sales in its quarter ending Sept. 30, up from $1 million net on $869 million in sales in the year-earlier period (all figures US$).
During the quarter, wholesale nitrogen sales rose seven per cent to $345 million, potash sales 27 per cent to $65 million, and phosphate sales 61 per cent to $108 million, the company said. Retail fertilizer sales were up 34 per cent to $201 million and retail chemical sales up seven per cent to $161 million.
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The company expects tight world fertilizer markets and strong domestic and international fertilizer demand to continue through the next quarter, along with normal application rates based on weather patterns and no major shutdowns or supply outages expected.
Agrium prepared for a further tightening of potash supply last week. The company told Reuters it was holding back on making new potash sales, waiting to see the effects of a sinkhole that threatens a Russian rail line serving a mine owned by potash company Silvinit, the No. 3 supplier worldwide.
Saskatoon’s PotashCorp, the world’s largest producer, also told Reuters it would stop making new sales due to the news, while Minneapolis fertilizer firm Mosaic Corp. said it would review its position.
Fertilizer company shares jumped on the reports from Russia, where the sinkhole is said to have been caused by flooding at a rival firm’s nearby mine. A Silvinit spokesman had told Reuters earlier this week that the company was prepared to build a new rail line to bypass that area if need be.
