Canada PotashCorp Q1 op profit up 60%

26 April 2007 18:01  [Source: ICIS news]

TORONTO (ICIS news)--Potash Corporation of Saskatchewan (PotashCorp), the Canada-based international fertilizer major, reported on Thursday a 60% increase in its first-quarter operating income compared with the same quarter last year due to high demand.

 

Operating income for the three months ended 31 March was $308.3m (€225.1m), up from $192.1m in the 2006 first quarter.

 

Sales were $1.155bn, up from $862m in the same comparison.

 

Net income was up almost 58% to $198m, the highest quarterly profit in the company’s history, PotashCorp said.

 

First-quarter gross margin of $369.7m, up from $203.5m in the 2006 first quarter, was also a company record, it said.

 

The improvement was due to high fertilizer demand as farmers around the world were increasing their plantings, PotashCorp said.

 

The potash business segment recorded a gross margin of $174.2m, up from $90.8m in the 2006 first quarter, driven by strong demand and rising prices.

 

The nitrogen segment had a gross margin of $131.3m, up 65% from the 2006 first quarter, and the phosphate business had a gross margin of $64.2m, almost double the $33.3m in gross margin in last year's first quarter.

 

Business prospects for fertilizers were good going forward, PotashCorp said, and pointed to increasing demand for crops used in food, animal feed, fibre and fuels.

 

The company also noted the US Department of Agriculture’s prediction that US farmers would plant 90.5m acres of corn this year, up 15% from last year. Corn crops were heavy users of fertilizer, it added.

 

"We believe we are at the front end of a period of significant consumption growth and strong prices for all our products," chief executive Bill Doyle said.

 

PotashCorp increased its full-year earnings per share guidance to $7.50-$8.50, from $6.25-$7.25.

 

PotashCorp’s shares were priced at Canadian dollars (C$) 215.20/share, up 3.24%, in Thursday morning trading in Toronto.

 

($1 = €0.73; $1 = C1.12)

By: Stefan Baumgarten
+1 713 525 2653

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