Compass Minerals reported that specialty fertilizer (sulfate of potash) operating earnings were off 66 percent for the fourth quarter ending Dec. 31, 2009, to $12.6 million on sales of $26.3 million from the year-ago $36.6 million and $57.8 million, respectively. Sales volumes were off 30 percent, to 41,000 st from 59,000 st. Compass said fourth-quarter volumes were the highest for the year. The average selling price for the quarter was $640/st, compared to the year-ago $975/st.
“We believe that specialty fertilizer customers are cautiously returning to the market, and we expect a meaningful improvement in sulfate of potash demand in 2010,” said Compass President and CEO Dr. Angelo Brisimitzakis. He told analysts he expects the company to achieve significant quarter-over-quarter sales volume improvements in the first quarter 2010 and for the year. He called 2010 a transitional year for SOP. “We think 2010 will be a good year, but not back to normal. And we think pricing has bottomed out, and we are hopeful that it will improve from there, and thus we announced a $30 increase.
“While the average selling price of SOP is almost certain to settle lower than our 2009 average, we still expect 2010 SOP prices to provide attractive margins,” continued Brisimitzakis. He said the company saw a bottoming of SOP prices in the low $500s/st FOB, and the $30/st increase is effective April 1.
For the full year, fertilizer earnings were off 35 percent, to $76 million on sales of $126.8 million, from 2008’s $117.7 million and $232.9 million, respectively. Sales volumes were off 61 percent, to 153,000 st from 391,000 st. The 2009 average selling price was $828/st versus 2008’s $596/st.
Company-wide, Compass net earnings for the fourth quarter were down, at $62.5 million ($1.88 per diluted share) on sales of $312.2 million, compared to the year-ago $80.1 million ($2.44 per share) and $388.3 million. For the year ended Dec. 31, 2009, before the snowfalls in recent weeks in the Eastern U.S., Compass reported that its salt business saw less demand for salt in the fourth quarter and year 2009 than in 2008. However, the salt segment did benefit from higher prices, lower shipping and handling costs, and stable production costs.
For the year, Compass reported increased net income, to $163.9 million ($5.01 per share) on sales of $963.1 million, compared to 2008’s $159.5 million ($4.93 per share) and $1.17 billion.
Compass has raised its quarterly dividend by 10 percent, to $.39 per share, effective with its dividend payable March 15, 2010, to shareholders of record at the close of business March 1, 2010.