Reuters – Nutrien Ltd NTR.TO on Wednesday cut its full-year adjusted earnings forecast for the second time this year as potash prices decline, sending the shares of the world’s biggest fertilizer maker down nearly 5 per cent in extended trading.
The company also missed third-quarter profit estimates, hurt by cooling prices of crop nutrients as farmers cut fertilizer application to rein in costs, and rising costs of natural gas, which is used as a feedstock to make nitrogen fertilizers.
The company cut global potash shipment forecast to between 60 million tonnes (mt) and 62 mt for 2022, from 61 mt and 64 mt, blaming higher-than-expected inventory and lower purchases in North America and Brazil during the second half of the year.
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However, it expects higher potash consumption next year.
“Pent-up demand will emerge as inventories are drawn down and prices stabilize,” the company said in a statement.
Its comments echo those of smaller rival CF Industries Holdings Inc CF.N, which said on Wednesday it expects global nitrogen supply shortfalls to persist in 2025 on robust agricultural demand as well as higher energy prices in Europe and Asia.
“During the third quarter of 2022, an estimated 60 per cent of ammonia capacity in Europe did not operate,” CF said, referring to curtailments in ammonia production due to high natural gas prices.
Global grain stocks will take at least two more seasons to be replenished, it added.
Nutrien now expects adjusted earnings for 2022 to be in the range of $13.25 to $14.50 per share, compared with its previous forecast of $15.80 to $17.80 a share.
Excluding items, Nutrien earned $2.51 a share, missing analysts’ average estimate of $3.97, while CF Industries’ adjusted earnings of $2.27 per share also missed consensus of $3.33, according to Refinitiv data.
