Edited from: “Letter from the president and CEO” and “Letter from the board chair” annual report 2008 and “Agrium reports fourth quarter net earnings of $124m and record year”, 11 February 2009
Agrium states that 2008 has been an “extraordinary year” not only for Agrium and the agriculture sector, but also for the global economy. “It was a year filled with dramatic swings in commodity and share prices, and it ended with the world facing what many believe will be the largest downturn in the world economy since the 1930s. I firmly believe that Agrium will continue to achieve solid results during this period of great uncertainty”, says president and chief executive officer, Michael Wilson.
The company further states that it is “financially well-positioned” and that it is an “integral link in providing food to a growing world”.
“Food is the one product that takes priority over all other commodities. Consumers can postpone buying a new television, automobile or appliance, but food is fundamental in that it sustains life and is an important component of economies in wealthy and developing countries alike”, says Wilson.
Agrium will focus on the implementation of its growth strategy in 2009 and beyond. It has already transformed its Retail business, created and developed its Advanced Technologies unit into a global leader in the controlled-release nutrient business, grown its international nitrogen operations and continued to expand its potash capacity. It will maintain its focus on countercyclical investment opportunities across the value chain as a key component of its growth strategy.
Looking ahead, Agrium says that 2009 may present some new challenges and opportunities. However, it believes that its prospects for growth remain strong. All three of its operating business units, Retail, Wholesale and Advanced Technologies are well positioned to meet the ever-growing demands of the agricultural and nutrient markets.
Key priorities in 2009
(1) To fully integrate United Agri Products (UAP) acquired in May 2008 into its Retail unit and capture $80m in synergies in 2009, and be in a position to realise the full synergies of $115m by 31 December 2010.
(2) To progress its brownfield potash expansion project, including the development of the potash reserves in its Vanscoy, Saskatchewan plant.
(3) To complete an expansion of polymer-coated controlled release fertilizer ESN capacity at Sylacauga, Alabama and start construction of a new ESN in-market coating facility;
(4) To continue to evaluate Retail and Wholesale countercyclical growth opportunities in the Americas and internationally;
(5) To determine the feasibility of debt financing, re-permitting and ultimate completion of two additional urea trains at the MISR Oil Processing (MOPCO) site in Egypt.
(6) To identify international expansion opportunities for proprietary Advanced Technologies products.
(7) To enhance forecasting capabilities in working capital and cash forecasting to optimise Agrium’s liquidity and balance sheet strength.
(8) To incorporate Agrium’s commitment to environmental health, safety & security (EHS&S) performance in the former UAP operations.
In addition to these priorities the company will:
(1) Continue to improve EHS&S performance by enhancing its processes, setting and achieving aggressive improvement targets and further strengthening employee commitment in these areas.
(2) Deliver superior products and services to all its customers.
(3) Focus on continuous improvement and adoption of best practices to further enhance its corporate-governance processes.
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Financial highlights: Agrium, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
2004 |
|
Sales ($ m) |
10,031 |
5,270 |
4,193 |
3,294 |
2,838 |
|
Operating Profit ($ m) |
3,223 |
1,598 |
956 |
1,038 |
905 |
|
Net Profit ($ m) |
1,322 |
441 |
33 |
283 |
266 |
|
Total Assets ($ m) |
9,818 |
5,832 |
3,265 |
2,785 |
2,661 |
|
Diluted earnings per share ($) |
8.34 |
3.25 |
0.25 |
2.12 |
1.91 |
|
Number of Employees |
10,975 |
6,618 |
6,554 |
4,719 |
4,617 |
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Agrium
Company Structure
Agrium is a global producer and marketer of agricultural nutrients, industrial products and specialty fertilizers, and a major retail supplier of agricultural products and services in both North and South America. Agrium operates and reports its business through three major operating segments: Retail; Wholesale; and Agrium Advanced Technologies, and also has a non-operating segment for corporate and inter-segment eliminations.
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