Shares of The Andersons Inc. tumbled by as much as 17% on May 3, the most in a year, according to Bloomberg, as farmers continued to delay fertilizer purchases even as prices fell from the elevated levels sparked by Russia’s invasion of Ukraine.
The Nutrient & Industrial (formerly Plant Nutrient) segment reported a first-quarter pre-tax loss of $10 million on revenues of $164 million, compared to year-ago income of $11 million and $210 million, respectively. EBITDA was a $1.3 million loss versus a positive $18.8 million.
“The Nutrient & Industrial business was faced with declining fertilizer prices and deferred customer purchasing in the quarter,” said CEO Pat Bowe. “This is in contrast to first-quarter of 2022, when fertilizer market prices were moving toward a record high and there were concerns regarding availability of supply. This drove buyers to lock in orders early and at significant margins for sellers.”
He told analysts that the company also believes increased interest rates influenced the timing of customer purchases.
“The agricultural businesses experienced significant declines in fertilizer prices since last year, and lower volumes due to limited customer engagement,” he added. “The Bloomberg Green Markets Fertilizer Index declined almost 60% in the same period. Due to these falling prices, we recorded a $4 million charge to revalue certain nitrogen-based inventories.
“In April, customers have engaged and prices have firmed a bit as fieldwork began in our service geography,” Bowe continued. “While some of the typical first-quarter business will shift into Q2, we do not expect that all the business will be recovered.”
The company also expects improved fertilizer volumes on increased corn acres.
Bowe said the outlook for the Nutrient & Industrial business is mixed. “We anticipate growth in our industrial product lines, and have seen good engagement in our specialty liquid fertilizers.”
Company-wide, The Andersons reported a net loss from continuing operations attributable to the company of $14.8 million on sales of $3.88 billion, down from year-ago income of $6.1 million and $3.98 billion, respectively. Adjusted EBITDA was $55.3 million, down from $55.8 million.