US CF Industries Q3 earnings down 18% year on year

26 October 2009 22:13  [Source: ICIS news]

HOUSTON (ICIS news)--US fertilizer maker CF Industries’ third-quarter net earnings fell 18% to $38.5m (€25.8m), from $47.1m in the same period last year, primarily due to business development costs, the Illinois-based company said on Monday.

Net third-quarter sales were $430.1m, down 58% from the same quarter in 2008, resulting from reduced prices for all fertilizer products.

Despite mixed market conditions, nitrogen fertilizer volume declined by 3% as lower domestic sales were mostly offset by exports, Illinois-based CF said.

Total phosphate segment sales volume rose 9%.

“Domestic distributors and retailers remain hesitant to carry inventory because of write-downs they experienced as prices fell last winter,” CF president and chief executive Stephen Wilson said.

Nitrogen gross margins increased $172.4m, while phosphate segment gross margins declined by $169.3m from the level reached during last year’s pricing peak, Wilson said.

The results also include $18.7m of costs associated with CF’s development of a nitrogen plant in Peru, costs involved in CF’s proposed takeover of Terra Industries, and costs to respond to Agrium’s offer to take over CF.

Compared with the second quarter, CF’s average urea selling prices declined by 12%, and average ammonia and urea-ammonium nitrate (UAN) prices declined by 50%.

Over the same period, the company’s realised cost of natural gas fell by 31%.

CF’s nitrogen complexes operated at 89% of capacity during the third quarter and entered the fourth quarter operating at similar rates.

($1 = €0.67)

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By: Frank Zaworski
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