PotashCorp 2Q net income off 79 percent; potash volumes off 85 percent

PotashCorp net income was off 79 percent to $187.1 million ($.62 per diluted share) on sales of $856 million for the second quarter ending June 30, 2009, compared to the year-ago $905.1 million ($2.82 per share) and $2.62 billion, respectively. An 85 percent drop in potash sales volumes stood out as a major factor for the drop as well as lower volumes and prices for phosphates and nitrogen.

Six month net income was $495.4 million ($1.63 per share) on sales of $1.78 billion versus the year-ago $1.47 billion ($4.54 per share) on sales of $4.5 billion.

Second quarter potash gross margins were $106.2 million on sales of $210.7 million, down from the year-ago $886.4 million and $1.19 billion, respectively. Six month margins were $272.8 million on sales of $479.9 million versus the year-ago $448.8 million on sales of $2 billion.

Potash sales volumes were 394,000 mt for the quarter with an average price of $473.05/mt versus the year-ago 2.7 million mt with average price of $411.38/mt. Six month volumes were 868,000 mt with an average price of $506.54/mt versus the year-ago 5.25 million mt and average price of $350.51/mt.

Second quarter phosphate gross margins were only $20.5 million on sales of $324.7 million versus the year-ago $340.9 million and $782 million, respectively. Six month margins were $29.3 million on sales of $654.6 million compared to the year-ago $720 million on sales of $1.29 billion.

Second quarter phosphate volumes (all products) were down at 723,000 mt with an average price of $403.96/mt versus the year-ago 909,000 mt and $802.20/mt. Six month volumes were 1.3 million mt with a price of $448.79/mt compared to the year-ago 1.84 million mt and price of $644.67/mt.

Second quarter nitrogen margins were $43.9 million on sales of $320.6 million versus the year-ago $210 million on sales of $644.5 million. Six month margins were $98.1 million on sales of $644 million versus the year-ago $778.1 million and $1.22 billion, respectively.

Second quarter nitrogen production (both industrial and ag) was 1.2 million mt with an average price of $238.67/mt versus the year-ago 1.27 million mt and $440.04/mt. Six month volumes were 2.46 million mt with a price of $232.53/mt compared to the year-ago 2.6 million mt and $409.15/mt.