CALGARY – Fertilizer giant Agrium Inc. (TSX:AGU) has reported a big drop in third-quarter net earnings, although overall sales revenue increased a modest one per cent to US$2.87 billion.
Calgary-based Agrium, which reports in U.S. dollars, said net earnings in the three months ended Sept. 30 were $76-million, or 52 cents per diluted share, compared with $129-million or 80 cents in the same prior-year period.
Sales revenue in the year-earlier period was $2.83 billion.
Agrium said retail sales increased by 15 per cent to $2.1-billion as there was a return to a more regular seasonal crop input demand compared with the 2012 spring season, which shifted sales typically earned from the third quarter into the first half for crop nutrients and crop protection products. The increase was complemented by incremental sales from recently acquired retail locations.
Wholesale sales decreased by 24 per cent to $752-million due to lower realized sales prices across all products.
Also impacting these revenues were lower urea sales volumes resulting from plant outages at Agrium’s nitrogen facilities, which lowered product available for sale, and lower phosphate sales volumes.
Advanced Technologies sales decreased by 14 per cent to $108 million, largely due to lower environmentally smart nitrogen, or ESN, volumes and sales prices as a result of the soft urea market.
In its outlook, Agrium said global production of almost all major field crops is expected to increase in 2013-2014, driven primarily by improved growing conditions in the U.S. and former Soviet Union.
In Western Canada, yields of almost all of the major crops are expected to break records this year. Stronger yields help offset the financial impact from lower crop prices and also increase nutrient removal, which is expected to support strong North American application rates in the 2013-2014 fertilizer year.
Meanwhile, strength in demand for crop protection products is expected to continue to be strong in the fourth quarter and into next spring, it added.