Nutrien hiked its forecast for full-year earnings, citing improved prospects for fertilizer profits in the face of “significant supply tightness” caused by curbs on former Soviet Union exports.
The Canada-based group lifted to $16.20-18.70 per share, from $10.20-11.80 per share, its forecast for its full-year adjusted earnings – representing a potential tripling in last year’s result of $6.32 per share.
The upgrade reflected increased expectations for all three fertilizer divisions, with ebitda in phosphate now seen reaching $800m-900m, up from a previous forecast of $500m-600m, and nitrogen ebitda hopes upgraded to $5.0m-5.8m from $3.2m-3.6m.
The group cited the “expectation of higher realised selling prices”, which it said “have continued to be supported by strong demand, supply disruptions and higher input costs”.
For potash, full-year ebitda was now seen reaching $7.5m-8.3m, lifted by the prospect of higher group sales volumes than had been previously expected, besides higher prices.
Nutrien joined rival Mosaic in slashing its forecast for world industry potash shipments this year, to 60m-65m tonnes, from a February forecast of 68m-71m tonnes, citing sanctions on major producers Belarus and Russia imposed since the start of the Ukraine war.
“Despite strong ag-fundamentals which support demand, the likely supply disruptions from Belarus and Russia may constrain global supplies and reduce shipments,” the group said.
“Expect significant supply uncertainty and production constraints from Belarus in 2022 due to severe sanctions imposed from the US and EU, and lack of access to ports through Lithuania.”
However, Nutrien revealed last month it was raising its own output this year by nearly 1m tonnes, to 15m tonnes, equivalent to 23-25% of world volumes.
Nutrien’s upgraded full-year earnings guidance was well above the $15.20 per share that investors had pencilled in, according to Refinitiv, and was announced as the group revealed a 10-fold surge in earnings to $1.39bn for the January-to-March quarter.
Sales rose 64% to $7.66bn.
Adjusted earnings per share, at $2.70, rose from $0.29 a year before, although came in a little shy of investor expectations of $2.75.
Nonetheless, backed by the better-than-expected full-year guidance, Nutrien’s Toronto-listed shares stood up 5.6% at Can$135.02 in late trading.