Most companies note the same trend in the notes to their quarterly figures. The volume of fertilizer sold in the past quarter is lower than in the third quarter of 2020. But the price more than made up for that. To give a picture of the effect of high fertilizer prices on manufacturers, we have selected the figures of four producers (two American and two European).
Canada’s Nutrien announced Monday, November 1, that its third quarter 2021 revenue will be $6,024 million, a 43% growth compared to the same period a year earlier. Adjusted EBITDA (gross profit) for the quarter was $1,565 million compared to $685 million in the third quarter of 2020. The company also revised its full-year earnings guidance upwards to $6.9 to $7.1 billion.
In the third quarter of 2021, American Mosaic saw revenue grow by 44% compared to the same period last year to $3.4 billion. Gross profit grew by 143% compared to last year and gross margin increased from 14.9% in 2020 to 25.3% in 2021.
Energy and transport have become considerably more expensive. These are factors that have contributed significantly to the sharp rise in fertilizer prices in recent weeks and months
K+S has not yet published the quarterly figures, but did release a profit forecast last week. The company expects EBITDA of €630 million in fiscal 2021, with no special transactions. That was previously $500 to $600 million. Free cash flow has increased from €180 million negative to cash flow in balance (€0).
The Norwegian Yara, also based in the Netherlands, is a bit out of place in this list. The company reported negative net income of $143 million in the third quarter. A year earlier, the result was $340 million positive. But these numbers are distorted by an incidental setback, a $355 million write-off on the Salitre phosphate mining project and a currency translation loss of $148 million. Adjusted for exceptional items and currency effects, earnings were $1.33 per share last quarter, compared to $0.88 per share in the third quarter of 2020.
In the cautious outlook (it concerns listed companies) for the coming months, various manufacturers, not just the above-mentioned companies, are quite united. The tightness in the market is likely to continue into the last quarter of 2021 and is expected to continue into early 2022.
The demand for fertilizer is good, partly due to the high grain prices. Farmers in different regions have taken advantage of presales more than usual. Energy and transport have become considerably more expensive. These are factors that have contributed significantly to the sharp rise in fertilizer prices in recent weeks and months. That doesn’t seem likely to change in the short term.
This article is part of the content collaboration between Foodlog, Foodbusiness and Farm business.
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Lower sales no problem for fertilizer manufacturers – High demand more than makes up for less production – Foodlog