Nutrien Ltd. reported third-quarter net earnings of $82 million on sales of $5.63 billion, down from the year-ago $1.58 billion and $8.19 billion, respectively. Adjusted EBITDA was $1.08 billion, down from $2.47 billion.
While the company missed most Wall Street estimates, shares rose 2.27% in New York on Nov. 2. Analysts took note of the company’s commentary on supportive macro trends offsetting weaker-than-expected earnings, according to Bloomberg.
“Nutrien’s third-quarter results reflect the strength of agriculture and crop nutrient market fundamentals in North America,” said Ken Seitz, Nutrien President and CEO. “We delivered record potash sales volumes and are encouraged by the increased level of demand and market stability in the second half of 2023. We are optimistic on the outlook for our business and will continue to position the company to efficiently serve the needs of our customers.”
“Our focus is on initiatives that strengthen the advantages of our integrated business, drive operational efficiencies, and increase free cash flow,” he added. “We expect to deliver growth from highly targeted investment projects and maintain a balanced and disciplined approach to capital allocation, including the return of meaningful capital to our shareholders.”
Going forward, Nutrien has narrowed full-year adjusted EBITDA guidance to $5.8-$6.4 billion from $5.5-$6.7 billion. It also narrowed adjusted net earnings per share to $4.15-$5.00 from $3.85-$5.60.
Nutrien told analysts that it expects US fertilizer demand will be up 5-10% in the fourth quarter compared to the prior year. However, the company lowered Retail adjusted EBITDA guidance to $1.45-$1.5 billion from $1.45-$1.6 billion to reflect pressure on crop protection product margins in South America and lower projected earnings in Australia, primarily related to weaker livestock markets.
Nutrien reported a record third quarter for potash sales volumes at 3.9 million mt, up 23% from the year-ago 3.17 million mt. The company has moved its full-year assessment of global potash shipments to 65-67 million mt from 63-65 million mt. For 2024, Nutrien projects 67-71 million mt in shipments.
Full-year potash adjusted EBITDA guidance rose to $2.3-$2.5 billion from $2-$2.5 billion and potash volumes to 12.8-13.2 million mt from 12.6-13.2 million mt, due to the strength of the North American market.
The company narrowed Nitrogen adjusted EBITDA guidance to $1.9-$2.1 billion versus the previous $1.8-$2.3 billion, saying higher benchmark prices offset lower projected sales volumes. The company lowered nitrogen sales volumes to 10.5-10.7 million mt, from 10.8-11.2 million mt, citing unplanned plant outages in the third quarter at Trinidad, Geismar, and Borger.
Nutrien reported a pull-forward of planned maintenance at its Borger site in the fourth quarter. A Borger turnaround had been planned for 2025. The Geismar outage was a five-year major overhaul with the facility experiencing some issues coming back up. The Trinidad outage was mainly due to gas curtailments and the company said it is in the final stages of finalizing its gas contract with the National Gas Co. of Trinidad. It expects to make an announcement in the near term.
The company told analysts that it completed two small brownfield expansions at Geismar and has installed the final of eight N20 abatement projects at its nitrogen plants. The debottlenecks came mostly at Geismar, and are expected to add 150,000-200,00 mt this year, mainly comprised of UAN with some ammonia. The segment also expects some smaller debottlenecks in 2024, which will add 40,000-50,000 mt.
Phosphate adjusted EBITDA was lowered to $450-$550 million from $500-$600 million due to the impacts of hurricane-related outages at White Springs in the third quarter and lower projected feed and industrial sales volumes.
While the company has been in an expansion mode in Brazil, it told analysts that it has paused additional investments until there is greater stabilization of the market. “We will utilize this period to integrate recent acquisitions and optimize our cost structure,” said Pedro Farah, Executive Vice President and CFO. He said the company still believes the long-term prospects for agriculture in Brazil are strong and sees opportunity for future growth of its retail platform.
Nutrien declared a quarterly dividend of $0.53 per share payable on Jan.12, 2024, to shareholders of record on Dec. 29, 2023.
Nine-month net earnings were $1.11 billion on sales of $23.4 billion, down from the year-ago $6.6 billion and $30.4 billion, respectively Adjusted EBITDA was $4.98 billion, down from $10.1 billion.
| Potash (millions) | 3Q-23 | 3Q-22 | YTD-23 | YTD-22 |
| Adjusted EBITDA | 611 | 1,378 | 1,941 | 4,811 |
| Gross Margin | 583 | 1,618 | 1,936 | 5,432 |
| Total Sales | 972 | 2,004 | 2,983 | 6,522 |
| Sales Volume (000 mt) | 3,895 | 3,167 | 9,913 | 9,919 |
| Avg ($/mt) | 250 | 633 | 301 | 658 |
| Nitrogen (millions) | 3Q-23 | 3Q-22 | YTD-23 | YTD-22 |
| Adjusted EBITDA | 294 | 855 | 1,539 | 3,090 |
| Gross Margin | 154 | 664 | 1,094 | 2,582 |
| Total Sales | 659 | 1,545 | 2,953 | 5,016 |
| Sales Volume (000 mt) | 2,387 | 2,680 | 7,689 | 7,684 |
| Avg ($/mt) | 276 | 577 | 384 | 653 |
| Gas Costs ($/mmBtu) | 2.95 | 8.24 | 3.55 | 7.86 |
| Phosphate (millions) | 3Q-23 | 3Q-22 | YTD-23 | YTD-22 |
| Adjusted EBITDA | 90 | 143 | 340 | 566 |
| Gross Margin | 27 | 114 | 163 | 477 |
| Total Sales | 382 | 567 | 1,258 | 1,644 |
| Sales Volume (000 mt) | 664 | 640 | 1,798 | 1,847 |
| Avg ($/mt) | 575 | 886 | 700 | 890 |