Nutrien Ltd. posted fourth-quarter net income of $176 million, considerably below the average analyst estimate (Bloomberg Consensus) of $347.4 million. Nutrien surpassed analyst estimates on revenues, however, posting $5.7 billion versus $5.37 billion. Year-ago income and revenue were $1.12 billion and $7.53 billion, respectively.
Adjusted EBITDA was $1.08 billion versus the analyst estimate of $1.12 billion. Year-ago adjusted EBITDA $2.1 billion.
“We saw a continuation of strong fertilizer market fundamentals in North America during the fourth quarter driven by improved affordability, an extended fall application season, and low channel inventories,” said Ken Seitz, President and CEO. “Utilizing the strengths of our integrated business, we achieved record fourth-quarter potash deliveries, increased crop nutrient sales volumes across our global Retail network, and generated strong cash flow from operations.”
Looking ahead, Seitz said the company expects to deliver higher fertilizer sales volumes and Retail earnings in 2024, supported by increased crop input market stability and demand. “We continue to prioritize strategic initiatives that enhance our capability to serve growers in our core markets, maintain the low-cost position and reliability of our assets, and position the company for growth,” he said.
Nutrien expects 91-92 million acres of corn in the US in 2024, with soybean acreage at 87-88 million acres.
Nutrien recognized a $76 million non-cash impairment in the fourth quarter in its Nitrogen segment relating to its Trinidad property, plant, and equipment due to a new natural gas contract and the resulting outlook for higher expected natural gas costs and constrained near-term availability. It expects availability to improve when new gas fields come online in 2026.
For the full-year, Nutrien recorded non-cash impairment of assets of $774 million in aggregate primarily related to Retail-South America goodwill and Nitrogen and Phosphate property, plant, and equipment.
Full-year net earnings were $1.28 billion on sales of $29.1 billion, down from the year-ago $7.7 billion and $37.9 billion, respectively. Adjusted EBITDA was $6.1 billion down from $12.2 billion.
Nutrien estimates 2024 global potash shipments up at 68-71 million mt from 2023’s 67-68 million mt, and expects a relatively global market with incremental increases in supply from producers in Canada, Russia, Belarus, and Laos.
It sees strong potash demand for the North American spring application season as channel inventories are tight, and also expects a significant increase in demand from Southeast Asia due to favorable economics from palm oil and rice. Good demand is also expected from India, Europe, and Latin American outside of Brazil.
China and Brazil are seen as having built up inventories versus year-ago levels. As a result, the company told analysts it does not assume an imminent settlement on the China contract.
Nutrien sees nitrogen supply constraints in 2024, including limited Russian ammonia exports, reduced European operating rates, and Chinese urea restrictions. The company expects Henry Hub natural gas prices to average $2.50/mmBtu for the year.
Nutrien said North American supplies of nitrogen are tight going into the spring season, noting that net imports in the first half of the 2023/24 fertilizer year were down an estimated 55% compared to the three-year average. It said global industrial demand remains at risk as European and Asian markets have yet to rebound to historical levels.
Nutrien said phosphate inventories are low in North American entering the spring season and it expects global supplies to remain tight due to low Indian stocks and China’s restrictions on exports.
Nutrien guidance for 2024 includes Retail adjusted EBITDA of $1.65-$1.85 billion, up from 2023’s actual $1.5 billion. Potash sales volumes are put at 13-13.8 million mt, up from 2023’s actual 13.2 million mt. Nitrogen sales volumes are seen as 10.6-11.2 million mt, up from 10.4 million mt due in part to improved production in Trinidad.
Phosphate volumes are pegged at 2.6-2.8 million mt versus 2023’s 2.6 million mt. The company noted its own improved operating rates after turnarounds at Aurora, N.C., and White Springs, Fla.
Nutrien announced that its Board of Directors declared a quarterly dividend of $0.54 per share payable on April 11, 2024, to shareholders of record on March 28, 2024. This represents an approximate 2% increase from the prior dividend declared on Nov. 1, 2023, and equates to an annualized dividend of $2.16 per share.
The Board also approved the purchase of up to 5% of Nutrien’s issued and outstanding common shares over a twelve-month period through a normal course issuer bid (NCIB).
| Retail (millions) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Adjusted EBITDA | 229 | 391 | 1,459 | 2,293 |
| Gross Margin | 989 | 1,077 | 4,430 | 5,179 |
| Total Sales | 3,502 | 4,087 | 19,542 | 21,350 |
| CN Sales | 1,808 | 2,320 | 8,379 | 10,060 |
| CN Margins | 346 | 349 | 1,378 | 1,766 |
| CN Volume (000 mt) | 2,863 | 2,494 | 12,632 | 11,513 |
| Avg ($/mt) | 631 | 930 | 663 | 874 |
| CN gross margin per mt | 120 | 139 | 109 | 153 |
| Potash (millions) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Adjusted EBITDA | 463 | 958 | 2,404 | 5,769 |
| Gross Margin | 427 | 1,067 | 2,363 | 6,499 |
| Total Sales | 776 | 1,377 | 3,759 | 7,899 |
| Sales Volume (000 mt) | 3,303 | 2,618 | 13,216 | 12,537 |
| Avg ($/mt) | 235 | 526 | 284 | 630 |
| Nitrogen (millions) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Adjusted EBITDA | 391 | 841 | 1,930 | 3,931 |
| Gross Margin | 285 | 699 | 1,379 | 3,281 |
| Total Sales | 877 | 1,588 | 3,830 | 6,604 |
| Sales Volume (000 mt) | 2,734 | 2,596 | 10,423 | 10,280 |
| Avg ($/mt) | 321 | 611 | 367 | 642 |
| Gas Costs ($/mmBtu) | 3.30 | 7.44 | 3.49 | 7.77 |
| Phosphate (millions) | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Adjusted EBITDA | 130 | 28 | 470 | 594 |
| Gross Margin | 70 | 16 | 243 | 511 |
| Total Sales | 472 | 429 | 1,730 | 2,073 |
| Sales Volume (000 mt) | 753 | 531 | 2,551 | 2,378 |
| Avg ($/mt) | 627 | 807 | 678 | 872 |