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Source: Potash Corp. news release

To view the complete report, click here.

Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported fourth-quarter earnings of $0.26 per share ($230 million), a total which included a $60 million charge (approximately $0.05 per share) for severance-related costs associated with workforce reductions announced in December. This result was below the $0.48 per share ($421 million) reported during the same period in 2012. Earnings for the year totaled $2.04 per share, compared to $2.37 per share in 2012.

Challenging fertilizer market conditions impacted our performance. Gross margins fell as lower prices in all three nutrients more than offset improved costs and higher sales volumes. Total gross margin for both the quarter ($460 million) and the year ($2.8 billion) fell below 2012 same-period results of $586 million and $3.4 billion, respectively.

Fourth-quarter earnings before finance costs, income taxes, depreciation and amortization2 (EBITDA) of $544 million brought our total for the year to $3.3 billion. The company generated $656 million in cash from operating activities during the fourth quarter, bringing our full-year result to $3.2 billion, slightly below the record achieved in 2012.

Earnings from our offshore investments were similarly affected by fertilizer market conditions. For the quarter, contributions from our investments in Arab Potash Company Ltd. (APC) in Jordan, Israel Chemicals Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile added $25 million to earnings.

Total contributions for the year, including a dividend from Sinofert Holdings Limited (Sinofert) in China, were $276 million. Both totals trailed those of the previous year. The market value of our investments in these publicly traded companies was approximately $5.2 billion, or $6 per share, at market close on January 29, 2014.

"This past quarter was a difficult one," said PotashCorp President and Chief Executive Officer Bill Doyle. "Pricing headwinds - most notably in potash - weighed on our performance, although there were signs as the quarter came to a close that the uncertainty in global markets was beginning to abate.

Our focus remained on those things we can influence and we took important steps to enhance our competitive position across all three nutrients and prepare the company to deliver better performance."

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