All Posts from August 3, 2016

Plant Nutrients a plus for The Andersons

While The Andersons Inc. reported a decline in second-quarter net income, results from its Plant Nutrients segment were up.

Second-quarter Plant Nutrient pre-tax income was up 23 percent to $23.5 million from the year-ago $18.9 million. Total volumes were up 4 percent to 942,000 st from 903,000 st, with basic nutrients up 2 percent and specialty products up 62 percent.

“The first half of the year was challenging, in line with our expectations, due to the poor crop last fall in the Eastern Corn Belt,” said CEO Pat Bowe. “While challenges in our Grain Group persisted, we did begin to see positive impacts from a good wheat harvest, and are starting to capture benefits from our productivity initiatives.”

“We were encouraged to see good volumes of specialty products in our Plant Nutrient business,” he added. “However, margins were disappointing in the face of oversupply of basic nutrients and low grain prices. The industry is starting to see production curtailments in certain products which should help bring supply and demand more into balance.”

Second-quarter net income attributable to the company was $14.4 million ($0.51 per diluted share) on revenues of $1.1 billion, compared to the year-ago $31.1 million ($1.09 per share) and $1.2 billion, respectively.

The company reported a first-half net loss of $273,000 ($0.01 per share) compared to year-ago $35.2 million ($1.23 per share).

CF 2Q income off 87 percent

CF Industries Holdings Inc. reported second-quarter net income attributable to common shareholders of $47 million ($0.20 per diluted share) on net sales of $1.13 billion, down from the year-ago $352 million ($1.49 per share) and $1.31 billion, respectively.

Included in the results is the $150 million payment CF made to OCI NV in connection with the termination of the combination agreement between CF and OCI announced in May.

CF says the demand outlook for 2017 is positive though new capacity will pressure global pricing. As a result, it expects a challenging price environment though 2017, which will pressure high-cost producers. However, the company says a lack of meaningful new production after the middle of 2017, coupled with capacity closures, is expected to lead to price recovery in 2018 and beyond. CF said in both the near and long-term, North American producers should remain at the very low end of the cost curve due to plentiful supply of North American natural gas.

Agrium posts 2Q income of $564M

Despite weak crop nutrient pricing, Agrium Inc. reported second-quarter net income of $564 million ($4.08 per diluted earnings) on sales of $6.4 billion. However, it was still a 16 percent reduction from the year-ago $674 million ($4.71 per share) on sales of $7 billion. Agrium said reduced earnings were driven by continued weakness in nutrient prices, partially offset by solid demand, lower costs and strong margins from the Retail segment.

“Agrium reported solid second quarter results driven by lower costs and strong margins across most of our business portfolio, supported by a stable cash flow from our retail operations. Our steadfast focus on operational excellence continues to deliver results and we believe our strategy and assets will create long-term shareholder value,” said Chuck Magro, Agrium’s president and CEO.

Agrium’s annual guidance range has been revised to $5.00-$5.30 per share, down from the previous guidance of $5.25-$6.25, due to the weak outlook for nutrient prices.

Acron sells its stake in Hongri Acron

Acron has announced the sale of its subsidiary holding a 50.5 percent interest in China’s Hongri Acron to an independent Hong Kong-based investment holding company.

The Shandong Province-based Hongri Acron produces complex fertilizers for the Chinese market, with three NPK production lines with an aggregate 800,000 mt/y capacity. Hongri Acron recorded a negative EBITDA of RUB 400 million in the first quarter of this year and a negative EBITDA of RUB 803 million in full-year 2015. Lengthy repairs have been ongoing at the operation impacting both production and sales.

“In line with Acron Group’s long-term development strategy, we decided to sell our stake in the Hongri Acron plant in China and focus on further development of our Russian production assets,” said Alexander Popov, Acron board chairman.

“Nevertheless, China has been and will remain our key partner and a priority market to sell our products outside Russia. For this reason, Acron Group will maintain its strong presence in China turning our efforts to advancing the local distribution network Yong Sheng Feng, which has been successfully selling Russian fertilizers under the Acron brand in the Chinese market for eight years.”

Acron did not disclose any financial details of the transaction.