Agrium Inc. AGU announced that it has successfully completed its proving run for the 1-million ton production expansion at its Vanscoy potash facility. The Canpotex proving run established a new nameplate production capacity of 3.024 million tons per year for the Vanscoy facility. The company has achieved this milestone in a timely and safe way.
Agrium expects its new Canpotex allotment to be about 10.5% of Canpotex's total annual international shipments, effective from the beginning of 2016. Success of the proving run will allow the company to distribute more potash to growing overseas markets. This will also enable the company to considerably cut its potash cash cost of production and boost earnings and free cash flow.
Last month, Agrium released its third-quarter 2015 results. The company posted net earnings of $99 million or 72 cents per share, up 8.8% from $91 million or 63 cents per share recorded a year ago. The bottom line was supported by higher volumes of Wholesale nutrients and lower production costs at the company’s Wholesale business unit.
Barring one-time items other than stock-based payment recovery (post-tax) of $11 million or 8 cents per share, Agrium’s adjusted earnings were 79 cents per share, topping the Zacks Consensus Estimate of 70 cents.
Revenues decreased 13.6% year over year to $2,524 million in the reported quarter. The fall was due to a sales decline in both the Retail and Wholesale businesses of the company. Sales also missed the Zacks Consensus Estimate of $2,893 million.
Agrium, which is among the prominent fertilizer companies, along with Mosaic MOS, Potash Corp. POT and CF Industries CF, revised its guidance for 2015. The company now anticipates earnings per share for 2015 in the range of $7.10–$7.40 compared with $7.00–$7.50 expected earlier. The revision was done taking into consideration the risk and opportunity associated with weather conditions and the length of fall season.
Agrium currently carries a Zacks Rank #3 (Hold).
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