Agrium Reports Second Quarter Net Earnings of $675 Million

Agrium Inc. (TSX:AGU,NYSE:AGU) announced its 2015 second quarter net earnings of $675 million, or $4.71 diluted earnings per share, compared to $625 million in Q2 2014.
As quoted in the press release:

The increase in earnings was supported by higher Wholesale volumes and lower production costs for most products. Retail results were impacted by lower crop prices, drought in Western Canada and wet conditions in the U.S. Corn Belt, which affected growers’ decisions and limited the opportunities for use of certain crop inputs and services.

Highlights:

• Second quarter adjusted net earnings of $701-million or $4.90 per share and $5.01 per share in the first half of 2015 on the same basis (see page 2 for adjusted net earnings reconciliation)(1).
• Strong nitrogen operational performance contributed to Wholesale gross profit of $409-million compared to $227-million in the second quarter of 2014. Our total ammonia production for the first half of 2015 was the highest since 2000.
• The Vanscoy potash facility continues to ramp-up production after completion of the expansion project and is hitting new daily production targets.
• Retail gross profit of $1.3-billion was 6 percent lower than the second quarter of 2014. Results were primarily impacted by lower earnings in Canadian retail and the lower Canadian dollar, as well as compression of seed margins across all regions.
• Repurchased $100-million or 952,053 shares since the beginning of April.
• 2015 annual guidance range narrowed to $7.00 to $7.50 diluted earnings per share (see page 3 for further detail).
• Revision to timeline and scope of Borger nitrogen expansion project.
• Agrium has exceeded its 2017 Operational Excellence targets of $350-million of one-time savings and $125-million of recurring EBITDA value through primarily our portfolio review, utilization rates, distribution network synergies, and cost reductions.

Chuck Magro, president and CEO of Agrium, commented:

Agrium’s solid second quarter earnings were supported by the strong competitive advantages across our product portfolio, the diversity of our product and geographic mix and our continued focus on operational excellence. Wholesale delivered impressive results across all products, supported by lower costs and higher volumes. Retail earnings held up well despite approximately a 5 percent decline in crop input expenditures across the North America market and the impact of the severe weather conditions across this region. We believe we outperformed against our U.S. retail peers achieving an increase in U.S. normalized comparable store sales in a down market, a demonstration of the strength of our business model and market position.

Click here to read the full Agrium Inc. (TSX:AGU,NYSE:AGU) press release.