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FULL YEAR: POTASHCORP EARNINGS FALL 32%, GROSS MARGINS DROP 20%
Source: PotashCorp news release

To view complete report, click here.

Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported fourth-quarter earnings of $0.48 per share ($421 million), which compared to $0.78 per share ($683 million) in the same period last year. Full-year earnings for 2012 of $2.37 per share ($2.1 billion) trailed the $3.51 per share ($3.1 billion) earned in 2011.

Our results included a $41 million ($0.04 per share) provision for the settlement of antitrust claims in the US recorded in the fourth quarter, and a $341 million ($0.39 per share) non-cash impairment charge related to our investment in Sinofert Holdings Limited (Sinofert) in China recorded in the second quarter.

With lower contributions from all three nutrients, gross margin declined to $0.6 billion from the $0.9 billion generated in the fourth quarter of 2011. This result brought our full-year gross margin to $3.4 billion, which compared to $4.3 billion earned in the previous year.

Adjusted earnings before finance costs, income taxes and depreciation and amortization2 (adjusted EBITDA) totaled $0.7 billion for the quarter and $3.9 billion for the year, with both amounts trailing those of the comparative periods. Cash provided by operating activities of $0.9 billion was flat with the previous year's fourth quarter and raised our 2012 total to $3.2 billion, the second-highest annual result in our history.

Our offshore investments in Arab Potash Company (APC) in Jordan, Israel Chemicals Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile contributed $94 million to earnings in the fourth quarter. For the full year, contributions from these investments - and a dividend from Sinofert - reached a record $412 million.

The market value of our investments in these publicly traded companies was approximately $9.1 billion, or $10 per PotashCorp share at market close on January 30, 2013.

"Our fourth-quarter results were adversely affected by weaker performance in all three nutrients as global fertilizer markets paused in the absence of significant immediate needs and amid lack of direction, particularly in phosphate and potash," said PotashCorp President and Chief Executive Officer Bill Doyle.

"Despite these temporary challenges, we operated with a consistent approach - temporarily slowing potash production and leveraging our diversified product mix in our other nutrients - to best position our company for the expected rebound in fertilizer demand in 2013."


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