Fertilizer firm Agrium, riding the rise in demand due to high crop prices, has posted a record US$195 million net profit for what’s usually a “seasonally slow” first quarter.
The Calgary company’s Q1 earnings, released Friday, were made on $1.1 billion in sales (all figures US$), compared to a net loss of $11 million on $821 million in sales in the year-earlier Q1.
The company, which on Thursday got clearance from U.S. antitrust regulators to move forward on its takeover bid for ag retail firm UAP, cited “excellent fundamentals for the fertilizer and broader agriculture sector, as well as to the quality of our assets that span the agriculture value chain.”
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“We expect our earnings this spring to surpass all previous records, even without the contribution of the UAP retail operations,” Agrium CEO Mike Wilson said in a release Friday.
Also during the quarter ending March 31, the company announced plans to buy Common Market Fertilizers, one of Western Europe’s largest fertilizer distribution companies. Agrium also opened an office in China
Agrium’s overall crop nutrient sales were up by $48 million in Q1, the company said, noting a $77 million increase in gross profit on nitrogen products, a Q1 gross profit record of $44 million on phosphate and a record $87 million gross profit on potash (up $61 million from the 2007 Q1), all “as a result of higher selling prices,” the firm said.
The company’s Q1 crop protection product sales grew by $13 million on higher sales prices due to tight supplies and higher demand. Glyphosate prices, for example, recently rose between 35 to 50 per cent, while fungicide prices have also increased, the company said.
Seed, services and other product sales dropped $4 million, Agrium said, due to a weather-related slow start to the spring growing season in the U.S. Midwest.
The company noted its overall cost for natural gas in Q1 was up seven per cent at $6.42/MMBtu, due to higher North American gas costs.
