(Calgary) The chief executive of Canadian fertilizer giant Nutrien said Thursday that the company may consider slowing its previously announced plan to increase potash production in light of falling prices and falling sales volumes.
The Saskatoon company — the world’s largest fertilizer producer — has lowered its profit forecast for the year and now expects it to be between $6.4 billion and $8.0 billion. . In its previous forecast, this range was from 8.4 billion US to 10 billion US.
The company’s third-quarter net profit was $576 million, down 58% from $1.4 billion a year earlier, and sales for the quarter ended March 31 were 6.1 billion US, down 20% from 7.7 billion US in the previous quarter.
“Yes, we would consider slowing down. As we talked about earlier this year, we’re watching the market,” Chief Executive Ken Seitz told analysts Thursday on a conference call to discuss the company’s first-quarter financial results.
“If we find that the market is not there, we will adjust our capital accordingly. »
It was a volatile time for Nutrien, which made record profits in 2021 and then saw fertilizer prices jump in March 2022, when the Russian-Ukrainian war rocked global agricultural markets and reduced fertilizer supplies from overseas. ‘Eastern Europe.
To meet rising global demand, Nutrien announced a plan in June last year to increase potash production by 40% over 2020 production levels, an increase of more than five million tons.
The company said it would do this by investing in the expansion of its existing mines in Saskatchewan, including hiring about 350 people.
But in the second half of 2022, Nutrien suffered a drop in the pace of its potash shipments that it called “historic.” In North America and Brazil in particular, farmers seemed to be postponing fertilizer purchases in the face of high prices.
As a result, in February this year, the company announced it would slightly delay its expansion plans, targeting 2026 instead of 2025 to meet its potash production target of 18 million tonnes.
Nutrien’s share price fell on Thursday following the release of the company’s first quarter results. The stock fell $1.38 to close the session at $83.29 on the Toronto Stock Exchange.
The company’s net earnings per share for the first quarter were US$1.14, down 54% from US$2.49 for the same quarter a year earlier.