All Posts from August 6, 2015

Wet weather impacts The Andersons – Alert

Extremely wet weather impacted second-quarter results for The Andersons. Plant Nutrient income dropped 30 percent to $18.9 million on sales of $357.2 million from the year-ago $27 million and $354.8 million, respectively. Company-wide, second-quarter net income was $32.4 million ($1.09 per diluted share) on sales of $1.21 billion down from the year-ago $49.4 million ($1.56 per share) and $1.31 billion, respectively. The Rail segment was the major bright spot for the company during the quarter, with those operating earnings moving up to $21.7 million from the year-ago $6.7 million.

Six-month Plant Nutrient income was $19.3 million on sales of $511.1 million, down from the year-ago $27 million and $506.2 million. Company-wide net income was $36.3 million ($1.23 per share) on sales of $2.16 billion, down from the year-ago $75.4 million ($2.36 per share) and $2.31 billion.

CF 2Q income up 13 percent; YTD lags – Alert

CF Industries Holding Inc. reported a 13 percent uptick in second-quarter net income to $351.9 million ($1.49 per diluted share) on net sales of $1.31 billion from the year-ago $312.6 million ($1.22 per share) and $1.47 billion, respectively. Nitrogen volumes were off at 3.61 million st from the year-ago 3.79 million st.

"Solid execution by our sales team and in our production facilities and distribution network led to the strong results for the quarter," said Tony Will, CF president and CEO. "Our financial results for the first half of 2015 demonstrate the sustainability of our cash generation capacity, even in a supply-driven, competitive global market."

Six-month income lagged by 43 percent at $582.5 million ($2.44 per share) on sales of $2.26 billion from the year-ago $1.02 billion ($3.85 per share) and $2.6 billion, respectively. Six-month volumes were 6.52 million st, down from 6.81 million st.

CF and OCI make deal – Alert

OCI NV and CF Industries Holdings Inc. today announced that they have entered into a definitive agreement to combine OCI’s North American, European and Global Distribution businesses with CF’s global assets in a transaction valued at approximately US$ 8 billion, based on CF’s current share price, including the assumption of approximately US$ 1.95 billion in net debt. Upon completion of the transaction and based on current share prices, OCI will receive shares equal to a fixed 25.6 percent of the combined group and an additional US$1,208 million of consideration to be paid in a mix of cash and shares. Greg Heckman, currently a member of the board of directors of OCI and former president and CEO of The Gavilon Group LLC and Alan Heuberger, senior manager at Bill & Melinda Gates Investments (BMGI), will join the board of directors of the combined entity. The proposed transaction was unanimously approved by the boards of both companies, but will still require shareholder approval. It is expected to close in 2016.

A merged CF Industries Holding Inc. and OCI NV will have its headquarters in the U.K. CF will become a subsidiary of a new holding company domiciled in the U.K. where CF is the largest fertilizer producer following its recent acquisition of GrowHow.

The transaction includes OCI’s nitrogen production facilities in Geleen, Netherlands, and Wever, Iowa, and the company’s interest in an ammonia and methanol complex in Beaumont, Texas, along with its global distribution business based in Dubai, United Arab Emirates. The combined entity will also purchase a 45 percent interest plus an option to acquire the remaining interest in OCI’s Natgasoline project in Texas, which upon completion in 2017 will be one of the world’s largest methanol facilities. On a combined basis the company will have production capacity of approximately 12 million nitrogen-equivalent nutrient tons by mid-year 2016.

Not mentioned in the OCI and CF press releases were OCI assets in Egypt and Algeria.

"This is a terrific opportunity for the shareholders of both companies, with mid- to high-teens cash flow accretion," said Tony Will, CF president and CEO. "This is also a great outcome for U.S. farmers as we have another supply point that will ensure our critical products are delivered reliably and in-time to meet our customers’ needs."

"Combining our businesses with CF builds upon the company’s platform in Europe and expansive distribution network in North America, enhancing our collective scale and improving our ability to meet the needs of customers in the U.S. and around the world," said Nassef Sawiris, OCI CEO "As significant owners in the combined entity, our shareholders will benefit from the ongoing value creation of the business."

Agrium 2Q income up 10 percent – Alert

Agrium Inc. reported a 10 percent uptick in second quarter net income to $675 million ($4.71 per diluted share) on sales of $7 billion, up from the year-ago $616 million ($4.28 per share) and $7.3 billion, respectively.

"Agrium’s solid second quarter earnings were supported by the strong competitive advantages across our product portfolio, the diversity of our product and geographic mix and our continued focus on operational excellence,” said Chuck Magro, Agrium president and CEO. “Wholesale delivered impressive results across all products, supported by lower costs and higher volumes. Retail earnings held up well despite approximately a 5 percent decline in crop input expenditures across the North America market and the impact of the severe weather conditions across this region. We believe we outperformed against our U.S. retail peers achieving an increase in U.S. normalized comparable store sales in a down market, a demonstration of the strength of our business model and market position."

Six-month net earnings were up 11 percent to $689 million ($4.78 per share) on sales of $9.9 billion compared to the year-ago $619 million ($4.29 per share) and $10.4 billion.

Agrium revises Borger plans – Alert

Agrium Inc. said today that it has changed its plans with respect to its Borger, Texas, expansion. While the company will continue with the 610,000 mt/y urea facility, it has opted against a 145,000 mt/y ammonia debottleneck. "We have decided not to expand the existing ammonia plant given the high cost and the significantly longer downtime required to complete this portion of the project than was originally planned," Agrium President and CEO Chuck Magro told analysts today. The company anticipates completion of an ammonia facility refresh in the first quarter of 2016 and expects the urea plant to be mechanically complete by the end of 2016. Agrium said the CAPEX for the project remains within 5 percent of the original $720 million estimate.