Canada's Agrium forecasts above-expectations Q4 earnings on sales

24 January 2013 13:25  [Source: ICIS news]

LONDON (ICIS)--Agrium is predicting that its earnings for the fourth quarter of 2012 will come in above earlier estimates on the back of strong North American business, the Canada-based fertilizer retailer said on Thursday.

The company predicts that its earnings per share for the period will be slightly over $2, beating out the $1.50-1.90 range it had predicted for the period.

Agrium’s retail unit is expected to generate around $120m (€90m) in earnings before interest, tax, depreciation and amortisation (EBITDA), which would indicate a record $950m for the year, according to the company.

Agrium’s wholesale division is expected to generate EBITDA of $500m over the period, and of $1.9bn for 2012 as a whole.

The company’s share price has been a bone of contention for Agrium’s largest shareholder, US hedge fund JANA Partners.

Agrium’s largest shareholder, with 6% of the company’s stock, JANA has been calling for Agrium’s retail and wholesale units to be split into different businesses.

The activist investor has also proposed five new candidates to Agrium’s 11-strong board of directors in a bid to “combat share price underperformance”, according to the firm.

On 23 January, the firm issued a presentation to Agrium shareholders in advance of a shareholder meeting this week, outlining its proposals for the company. The move follows the reported unanimous rejection of its plans by the Agrium board in November. 

Strong North American sales and high grain and oilseed prices helped to drive the retail division’s performance, according to Agrium CEO Mike Wilson.

"The increase in our estimated financial results is due to a very strong finish to the fall application season in our North American Retail operations, supported by an extended fall season in the US and continued strength in grain and oilseed prices,” he said.

“Going forward, continued strength in crop prices and low global grain inventories are anticipated to support a strong spring application season in 2013," Wilson added.

Agrium is expected to announce its fourth quarter earnings on 22 February.

($1 = €0.75)

By: Tom Brown
+44 208 652 3214

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