Canadian company Nutrien reported a first quarter loss of US$1 million due to a delayed spring and ongoing issues with rail transportation.
Toronto-listed Nutrien (TSX:NTR) reported a first quarter loss of US$1 million due to a delayed spring and ongoing issues with rail transportation.
Formed at the beginning of the year out of a merger between Saskatoon-based Potash Corporation and Calgary’s Agrium, Nutrien became the world’s largest nutrient company and the third-largest natural resource company in Canada. The consolidation was expected to generate US$500 million in annual operating synergies, with a 2018 forecast of US$250 million.
“Nutrien’s first quarter was affected by a late start to the spring season across North America and west coast rail performance issues. However, we expect a strong second quarter with improved grower margins and strong demand and firm prices for most crop inputs,” Chuck Magro, Nutrien’s president and CEO said in a press release.
Despite Q1 not generating its expected revenues, the company forecasts a strong Q2 will make up for the loss.
“Nutrien acquired 29 retail locations with estimated annual revenues of approximately US$280 million through April 2018; announced the newly branded Retail business, Nutrien Ag Solutions™; and launched an integrated digital platform enabling year-round commercial and agronomic digital management for growers,” notes the Q1 financial report.
Reduced revenue wasn’t the only piece of bad news the massive fertilizer and farm supply dealer experienced over the first three months of year. In late April, the company announced it would temporarily lay off 1,300 workers from two if its six Saskatchewan-based potash mines. Nutrien blamed the lay off on a series of transportation hiccups as well as an inventory surplus, and the threat of a looming CP Rail strike.
Following the merger, Nutrien employed approximately 20,000 people in 18 countries, with the entire company valued at US$36 billion.
Looking forward to the rest of 2018, Nutrien expects potash to bring in strong revenues allowing the company to hit its 2018 synergy target of US$250 million.
“We [Nutrien] expect potash demand to remain robust as a result of high underlying consumption and relatively low inventory levels in most major markets,” notes the press release. “We have increased our global potash shipment forecast to 64.5 to 66.5 million tonnes for 2018.”
Nutrien’s shares experienced a slight bump on Wednesday (May 9), up 2.99 percent to close at C$61.67.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.