Agrium Inc. reported a 10 percent uptick in second-quarter net income, to $675 million ($4.71 per diluted share) on sales of $7 billion, up from the year-ago $616 million ($4.28 per share) and $7.3 billion, respectively.
"Agrium’s solid second-quarter earnings were supported by the strong competitive advantages across our product portfolio, the diversity of our product and geographic mix, and our continued focus on operational excellence,” said Chuck Magro, Agrium president and CEO. “Wholesale delivered impressive results across all products, supported by lower costs and higher volumes. Retail earnings held up well despite approximately a 5 percent decline in crop input expenditures across the North America market and the impact of the severe weather conditions across this region. We believe we outperformed against our U.S. retail peers, achieving an increase in U.S. normalized comparable store sales in a down market, a demonstration of the strength of our business model and market position."
Agrium’s second-quarter gas cost dropped to $2.39/mmBtu from the year-ago $4.51/mmBtu.
Agrium adjusted its annual guidance to $7.00-$7.50 EPS from the previous $7.00-$8.25 per share, citing the impact of low crop prices on grower decisions and expected potash and phosphate pricing in the second half. The company assumes a normal fall season, recognizing a risk to nutrient applications in regions with drought or delayed harvest.
Other guidance includes Retail EBITDA of $1-1.05 billion and crop nutrient volumes of 9.7-10.2 million mt. Wholesale Nitrogen production is put between 3.5-3.7 million mt, and Potash at 1.9-2.2 million mt.
Second-quarter Wholesale gross profit was $409 million on sales of $1.17 billion, up from the year-ago $227 million and $1.21 billion. Total tons were 2.64 million mt, down from 2.78 million mt.
Nitrogen gross profits soared to $270 million on sales of $553 million from the year-ago $101 million and $421 million, respectively. Tons were 1.22 million, up from 906,000 mt.
Potash profits were $68 million on sales of $166 million, down from $72 million and $175 million, respectively. Tons were 509,000 mt, down from 566,000 mt. North America took 334,000 mt ($371/mt) versus the year-ago 372,000 mt ($358/mt). International was down at 175,000 mt ($243/mt) from the year-ago 194,000 mt ($218/mt).
Phosphate profit was $29 million on sales of $192 million, up from $6 million and $161 million, respectively. Volumes were up at 290,000 mt from 268,000 mt.
Second-quarter Retail gross profit was $1.26 billion on sales of $6.2 billion, down from $1.35 billion and $6.4 billion, respectively. Within Retail, crop nutrient gross profit was $454 million on sales of $2.6 billion, down from the year-ago $505 million and $2.71 billion, respectively. Total crop nutrient tons were 4.86 million mt, down from 4.92 million mt.
Six-month net earnings were up 11 percent to $689 million ($4.78 per share) on sales of $9.9 billion, compared to the year-ago $619 million ($4.29 per share) and $10.4 billion.
Six-month Wholesale gross profit was $643 million on sales of $2.04 billion, up from the year-ago $398 million and $2.3 billion, respectively. Total tons were 4.7 million mt, down from 5.4 million mt.
Nitrogen gross profit was $413 million on sales of $868 million, up from $191 million and $757 million. Total nitrogen tons were up at 1.98 million mt from the year-ago 1.7 million mt.
Potash profits were off at $75 million on sales of $233 million from the year-ago $118 million and $303 million. Total volumes were 694,000 mt, down from 994,000 mt. North American volumes were 483,000 mt ($378/mt), down from 664,000 mt ($351/mt). International were 211,000 mt ($240/mt), down from 330,000 mt ($213/mt).
Phosphate profits were up at $74 million on sales of $373 million f