Market News & Headlines >> PotashCorp to Cut Production
Fertilizer giant PotashCorp on Thursday reported an 11% drop in third-quarter profit, trimmed its full-year earnings and sales forecasts, and said it would lower production due to reduced demand.
The company said net income in the third quarter fell to $282 million, or 34 cents per share, from $317 million, or 38 cents per share in 2014. The firm revised its full-year 2015 earnings guidance downward to $1.55-$1.65 per share from $1.75-$1.95 previously. Gross margin for the quarter totaled $505 million, down from $589 million in the third quarter of 2014, primarily due to weaker nitrogen contributions.
"Broader emerging market concerns have weighed on customer sentiment, contributing to a weaker fertilizer environment in the second half of 2015," said PotashCorp President and Chief Executive Officer Jochen Tilk in a press release.
In response, the company has pushed forward the permanent closure date for its Penobsquis, New Brunswick mine and plans December shutdowns at three Saskatchewan mines, which will reduce fourth quarter potash production by nearly 500,000 metric tons, Tilk said.
Global potash demand remained strong during the third quarter on higher volumes to Brazil, India and China, but “economic headwinds and significant currency volatility” caused many buyers to act cautiously, resulting in pressure on potash prices, said the Saskatchewan-based company, the world’s largest fertilizer producer by capacity.
In the nitrogen market, third-quarter prices were down from a year earlier on rising global supplies due to lower energy costs and weaker demand from Latin America, PotashCorp said. In phosphate, markets for solid fertilizer remained relatively steady.