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3RD QTR: POTASH CORP. SALES DOWN 7%, NET EARNINGS DROP 21%
Oct. 29, 2012
Source: Potash Corp. news release
To view entire report, click here.
Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported third-quarter earnings of $0.74 per share ($645 million), which compared to $0.94 per share ($826 million) in the same period last year. Earnings for the first nine months reached $1.89 per share ($1.7 billion), a total that trailed the $2.73 per share ($2.4 billion) earned during the same period in 2011.
Gross margin of $0.9 billion was the third highest third-quarter total in our history, exceeded only by the $1.1 billion generated in 2011 and the record performance of 2008. The decline from 2011's third quarter was primarily the result of weaker phosphate margins and reduced offshore potash sales due to the delay of new supply contracts with China and India. Our gross margin for the first three quarters of 2012 reached $2.8 billion, which compared to $3.4 billion generated in the same period last year.
Earnings before finance costs, income taxes and depreciation and amortization2 (EBITDA) reached $1.1 billion for the quarter - down from $1.3 billion earned in third-quarter 2011 - and raised the total for the first nine months to $2.9 billion. Although cash flow prior to working capital changes of $0.8 billion trailed the $1.0 billion generated during the same quarter last year, the nine-month total for 2012 grew to $2.7 billion, 8 percent below last year's record levels.
Offshore investments in Arab Potash Company (APC) in Jordan, Israel Chemical Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile contributed $113 million to our earnings in the third quarter. Contributions in the form of share of earnings of equity-accounted investments and dividends from these investments for the first nine months of 2012 reached a record $318 million - a total which also included a dividend from Sinofert Holdings Limited (Sinofert). The market value of our investments in these publicly traded companies equated to approximately $9.2 billion, or $10 per PotashCorp share, at market close on October 24, 2012.
"Strong demand in North America and Latin America demonstrated the powerful motivators in place for farmers today, although not all global potash markets moved as quickly to capitalize on these favorable conditions," said PotashCorp President and Chief Executive Officer Bill Doyle. "While Chinese and Indian customers have not engaged consistently, their need for improved soil fertility to increase food production has not subsided. Our diversified fertilizer business and global footprint helped support our results for the quarter and we believe position us well to drive improved results as demand grows."
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