Nutrien Ltd. on May 7 reported a first-quarter net loss from continuing operations of $1 million and EBITDA of $487 million, down from the $97 million in combined earnings reported by Potash Corp. of Saskatchewan Inc. and Agrium Inc. during last year’s first quarter.
Nutrien said the results were impacted by a late spring season in North America, which shifted planting, applications, and associated retail crop input purchases to the second quarter of 2018. Additionally, depreciation and amortization increased by $112 million during the quarter due primarily to the purchase price allocation (PPA) impact. Stronger global crop nutrient prices compared to last year and higher potash sales volumes partially offset the late start to the spring season.
Adjusted for PPA ($74 million or $0.08 per share) and merger-related costs ($66 million or $0.08 per share), first-quarter earnings from continuing operations were $0.16 per share, while first-quarter EBITDA adjusted for merger-related costs was $553 million.
“Nutrien’s first quarter was affected by a late start to the spring season across North America and West Coast rail performance issues,” said President and CEO Chuck Magro. “However, we expect a strong second quarter with improved grower margins and strong demand and firm prices for most crop inputs.”
Nutrien said it acquired 29 retail locations during the first quarter, with estimated annual revenues of approximately $280 million through April 2018. While retail earnings and nitrogen prices were impacted by the late season in North America, Nutrien said potash segment sales volumes were up 11 percent and earnings increased compared to the combined first-quarter 2017 results of legacy PotashCorp and Agrium operations, due to higher potash prices, lower production costs, merger synergies, and strong offshore sales volumes, despite significant rail issues during the quarter.
Nutrien said it has raised the guidance range for potash sales volumes and EBITDA to 12.0-12.5 million mt and $1.2-$1.4 billion, respectively, while its guidance for nitrogen EBITDA increased to $1.0-$1.2 billion. Full-year 2018 guidance was raised to $2.20-$2.60 diluted earnings per share from continuing operations, and first-half 2018 guidance was provided at $1.50-$1.65 earnings per share. Nutrien declared a quarterly dividend of $0.40 per share and repurchased 10.3 million shares under its normal course issuer bid program year-to-date.
The company said it achieved $150 million in run-rate synergies as of March 31, 2018. Nutrien said it remains on target to achieve its commitment of delivering a run rate of $500 million in annual synergies by Dec. 31, 2019.