Terra posts tripling of third-quarter net profits

23 October 2008 15:22  [Source: ICIS news]

TORONTO (ICIS news)--US fertilizer producer Terra Industries posted a more than tripling of third-quarter net profits year on year to $171.4m on sales of $790m, up 36%, the profits surge mainly due to high nitrogen selling prices and strong demand, it said on Thursday.

 

Terra’s net income for the three months ended 30 September compared with $54.4m posted in the year-earlier quarter, it said.

 

Income from continuing operations more than doubled to $171.3m, from $70.5m year on year, the company added. 

 

Ammonia, urea ammonium nitrate (UAN) and ammonium nitrate (AN) selling prices increased 94%, 47% and 56%, respectively, over those of the same period last year, Terra said.

 

The improved selling prices reflected strong nitrogen products demand resulting from low grain inventories and strong commodity grain prices, it added.

 

"We are pleased with Terra's third-quarter performance,” said CEO Mike Bennett.

 

“We also expect [a] strong fourth-quarter performance, in part because we have secured margins on substantial volumes of forward sales against which we have locked in natural gas purchases," he said.

 

Looking ahead to 2009, Bennett said industry projections indicated an increase in nitrogen fertilizer demand driven by increased demand for grain.

 

“It remains to be seen what effect the broad economic slowdown will have on our industrial customers,” he added.

 

So far, credit issues had not had a notable impact on Terra’s customer base, Bennett said.

 

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By: Stefan Baumgarten
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