Terra 4Q income off 99 percent, 75 percent for year; increased 4Q volumes signal solid rebound, says Bennett

Terra Industries Inc. reported net income of $1.86 million (negative $.04 per diluted share attributable to common shareholders) on sales of $361.1 million for the fourth quarter ending Dec. 31, 2009, compared to the year-ago $180 million ($1.65 per share) and $683.5 million. Full-year net income was $178.6 million ($1.53 per share) on sales of $1.58 billion, versus 2008’s $708.7 million ($6.20 per share) and $2.89 billion.

“Terra’s fourth-quarter and full-year results reflect the gradual pace of recovery from the weakened market conditions that prevailed through most of 2009,” said Michael Bennett, Terra president and CEO. “Moderate natural gas prices for the quarter and year helped reduce our costs significantly, but could not fully counter the effects of much lower nitrogen products selling prices. While sales volumes for the full year lagged those of 2008, fourth-quarter sales volumes increased over the previous year, signaling the start of what we believe will be a solid market report.”

Terra said decreased fourth-quarter selling prices reduced revenues by 53 percent, and were partially offset by sales volume gains in ammonia and urea, which increased revenues by 9 percent. Terra said increased volumes reflect restocking activity and healthy sales in the environmental markets. Lower natural gas costs reduced fourth-quarter production expenses by $205 million.

Terra reported $77.8 million in special charges during the quarter, which included $42.8 million in U.S. tax expense associated with the repatriation of funds to the U.S., $32.4 million for early retirement of debt, and $2.6 million in expenses related to the unsolicited offer by CF Industries Holding Inc.

Terra declared a dividend of $.10 per common share, payable April 7, 2010, to holders of record as of March 17, 2010.