05 November 2012 22:10 [Source: ICIS news]
HOUSTON (ICIS)--US fertilizer major CF Industries on Monday reported record third quarter 2012 net earnings of $403.3m (€310.5m), a 22% increase from the same quarter in 2011.
Driving the record earnings was a 52% gain in gross margin, Illinois-based CF said.
Net sales in the third quarter were $1.36bn, down 3% from $1.4bn a year earlier because of lower total nitrogen volume and phosphate product prices.
Total sales volume decreased 2% to 3.5m tonnes in the third quarter largely due to lower urea sales compared with the same period in 2011.
"Lower phosphate product prices resulted from lower global demand relative to the same period last year, while the phosphate volume increased from strong demand in North America," CF said.
"As dealers moved to address tight inventories, we achieved exceptional results during what is the normal seasonal low quarter of the year," said CF chief executive Stephen Wilson.
"We also built a strong order book for the fourth quarter, indicative of robust nitrogen demand in anticipation of another year of high planted acres in 2013,” Wilson said.
While CF said fertilizer markets were characterized by good demand in North America during the quarter, purchasing activity was less than expected in international markets, particularly in Central and South America.
In addition, low water levels on the Mississippi River created logistical challenges for CF and other suppliers that rely on the inland waterway system.
However, the company said it was able to deal with these challenges by using other transportation modes, including pipeline, rail and truck.
Looking ahead, Wilson said high corn planting in 2013 will provide strong domestic fertilizer demand while favourable natural gas costs will enable a positive operating environment for the remainder of 2012 and into 2013.
($1 = €0.77)
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