A rebound in global agricultural markets is expected to drive better returns this year after a difficult fourth quarter for fertilizer company Nutrien Ltd., its CEO said Thursday.
The last three months of 2019 featured ongoing challenges including geopolitical issues and short-term weather anomalies, said Chuck Magro on a conference call to discuss the Saskatoon-based company’s financial results.
“These headwinds virtually eliminated all global growth for crop inputs in 2019 and set back the cyclical recovery we started to see in 2018,” he said, noting a condensed fall fertilizer application window in North America.
“But looking forward into 2020, we expect global ag markets to recover as we move through the year.”
Magro said the week-long Canadian National Railway Co. strike in November resulted in a $10-million fourth-quarter earnings hit.
Demand for crop inputs is expected to rise in Nutrien’s key North American markets this spring due to an increase in seeded acreage, improved cash crop margins and farmers wanting to catch up on fertilizer applications, he said.
The recent U.S.-China trade agreement has improved American farmer sentiment, Magro said, but short-term shipments to China remain uncertain as customers draw down port inventories and fears of the novel coronavirus limit product movements.
Adjusted earnings from its potash operations dropped 62 per cent in the fourth quarter compared with the same period of 2018 due to lower prices and volumes and higher costs as facilities were shut down temporarily to better match supply with reduced global demand, Nutrien reported.
The company expects global potash deliveries in 2020 will be between 66 million and 68 million tonnes, similar to the record global delivery levels of 2018, driven by increased planting in North America, Indonesia and Malaysia, lower beginning inventories and strong affordability.
Shares in Nutrien rose by as much as $1.98 or 3.6 per cent in Toronto to $56.57 on Wednesday morning.
Source: Read Full Article