Agrium reports excellent first quarter operating results; crop input market expected to remain strong
(firmenpresse) - CALGARY, ALBERTA -- (Marketwire) -- 05/09/12 -- ALL AMOUNTS ARE STATED IN U.S.$
Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today consolidated net earnings ("net earnings") of $155-million ($0.97 diluted earnings per share) for the first quarter of 2012, compared with the net earnings of $171-million reported in the first quarter of 2011 ($1.09 diluted earnings per share).
The 2012 first quarter results included a pre-tax loss of $13-million ($0.06 diluted earnings per share) on natural gas and other hedge positions and a pre-tax share-based payment expense of $64-million ($0.29 diluted earnings per share). Excluding these items, net earnings would have been $210-million ($1.32 diluted earnings per share) for the first quarter of 2012.(1)
"The benefits of Agrium's strong global position across the agricultural value chain were evident once again this quarter, as our Retail business capitalized on one of the earliest starts to the North American spring season in history, achieving its highest ever sales and EBITDA(2) for a first quarter. Agrium's Wholesale results were the second highest on record for a first quarter, despite slow global demand for potash and phosphate this quarter," said Mike Wilson, Agrium President and CEO.
"Crop prices remain well above historical levels, providing a strong economic incentive for growers to optimize use of all crop inputs in order to maximize their yields and profitability. Favorable weather has enabled growers to get a very early start on spring planting and applications and we have seen strong movement of nutrients and other crop inputs, as some of Retail's business was brought forward into the first quarter. Our Wholesale operations are expected to benefit in the second quarter from rising nitrogen and falling North American natural gas prices.(3)" added Mr. Wilson.
Agrium is providing guidance for the first half of 2012 of $5.50 to $6.10 diluted earnings per share. This excludes hedging gains or losses and share-based payments expense in our first quarter actual results and estimated second quarter results.(3)
(1)First quarter effective tax rate of 28 percent used for adjusted diluted earnings per share calculations.
(2)Earnings from continuing operations before finance costs, income taxes, depreciation and amortization. See disclosure under the heading "Non-IFRS Financial Measure" in the section "Management's Discussion and Analysis".
(3)See disclosure in the section "Outlook, Key Risks and Uncertainties" in our 2012 first quarter MD&A and additional assumptions in the section "Management's Discussion and Analysis".
MANAGEMENT'S DISCUSSION AND ANALYSIS
May 9, 2012
Unless otherwise indicated, the financial information presented and discussed in this Management's Discussion and Analysis ("MD&A") is prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), and all comparisons of results for the first quarter of 2012 (three months ended March 31, 2012) are against results for the first quarter of 2011 (three months ended March 31, 2011). All dollar amounts refer to United States ("U.S.") dollars except where otherwise stated.
The following interim MD&A updates our annual MD&A included in our 2011 Annual Report to Shareholders, to which our readers are referred and is as of May 9, 2012. The Board of Directors carries out its responsibility for review of this disclosure principally through its Audit Committee, comprised exclusively of independent directors. The Audit Committee reviews, and prior to publication, approves, pursuant to the authority delegated to it by the Board of Directors this disclosure. No update is provided where an item is not material or there has been no material change from the discussion in our annual MD&A. Forward-Looking Statements are outlined after the Outlook, Key Risks and Uncertainties section of this press release.
The major assumptions made in preparing our first half guidance are outlined below and include but are not limited to:
2012 First Quarter Operating Results
CONSOLIDATED NET EARNINGS
Agrium's 2012 first quarter consolidated net earnings ("net earnings") were $155-million, or $0.97 diluted earnings per share, compared to net earnings of $171-million, or $1.09 diluted earnings per share, for the same quarter of 2011.
Sales
For the first quarter of 2012, Retail sales increased by 35 percent to $2.5-billion compared to the first quarter of 2011, due to higher sales volumes of all of our major product lines. Wholesale sales, for both the first quarters of 2012 and 2011, remained stable at $1.2-billion due to higher selling prices. Advanced Technologies ("AAT") sales during the quarter increased by 67 percent to $135-million compared to the same period last year due to Environmentally Smart Nitrogen ("ESN") market penetration coupled with a warm spring season.
Gross Profit
Our consolidated gross profit for the first quarter of 2012 increased by $75-million compared to the first quarter of last year, primarily due to higher gross profit from our Retail business unit. Performance for this quarter, compared to the first quarter of 2011, includes the following:
Expenses
The $88-million increase in expenses for the first quarter of 2012 compared to the first quarter of 2011 is mainly comprised of:
The following table is a summary of our other expenses (income) for the first quarters of 2012 and 2011:
Effective Tax Rate
The effective tax rate was 28 percent for the first quarter of 2012 and is comparable to the effective tax rate of 27 percent for the same period in 2011.
BUSINESS SEGMENT PERFORMANCE
Retail
Retail reported record 2012 first quarter sales of $2.5-billion, a 35 percent increase over the $1.8-billion in sales for the first quarter of 2011. This significant increase was a result of strong demand for crop input products and services within North America, as growers and dealers took advantage of one of the earliest starts to the spring season in history. Gross profit was a record $427-million this quarter, compared to the $340-million earned in the first quarter of 2011. Retail also achieved record earnings from continuing operations before finance costs, income taxes, depreciation and amortization ("EBITDA") of $101-million in the first quarter of 2012, a substantial increase over the $25-million EBITDA reported in the first quarter last year.
Crop nutrient sales reached $1.0-billion this quarter, compared to $707-million in the same quarter last year. The 46 percent increase was due primarily to a combination of higher sales volumes and higher nitrogen prices. North American nutrient sales volumes were approximately 43 percent higher than the same period last year due to the early spring season and strong North American grower demand for crop nutrients. Gross profit for crop nutrients was $155-million this quarter, 35 percent higher than the $115-million reported in the first quarter of 2011. Total crop nutrient margins were 15 percent in the first quarter of 2012, down 1 percent from the same quarter last year.
Crop protection sales were $834-million in the first quarter of 2012, a 31 percent increase over the $638-million in sales for the same period last year. Total crop protection gross profit this quarter was $123-million, a 21 percent increase over the $102-million recorded in the first quarter of 2011. The increase in sales and gross profit was mainly due to higher sales volumes across a wide array of our North American product lines, including our private label Loveland products. Crop protection product margins as a percentage of sales were 15 percent for the first quarter of 2012, down 1 percent from the first quarter last year due to customer mix in North America. Margins in our Australian Landmark business were 17 percent this quarter, up 2 percent from the first quarter last year.
Seed sales reached $316-million in the first quarter of 2012, compared to $230-million in the first quarter last year. Gross profit increased to $44-million this quarter, compared to $35-million in the first quarter of 2011. Higher sales and gross profit this quarter were supported by increased sales of corn and soybeans in our North American operations, as well as increased demand for spring wheat in our northern regions.
Sales of merchandise in the first quarter of 2012 were $130-million, compared to $144-million in the first quarter of 2011. Gross profit for this product line was $23-million this quarter, a 35 percent increase over the $17-million reported in the first quarter last year. The increase in gross profit this quarter was driven primarily by stronger margins in Landmark's animal health and animal management businesses.
Services and other sales were $136-million this quarter, substantially higher than the $103-million reported in the first quarter of 2011. Gross profit was $82-million in the first quarter of 2012, compared to $71-million for the same period last year. The increase in sales and gross profit this quarter was attributable to increased custom application services resulting from favorable North American weather, resulting in an earlier start to the spring sales season.
Retail selling expenses for the first quarter of 2012 were $350-million, up $15-million from last year. The increase over the same period in 2011 was due to higher payroll and fuel expenses related to the increased sales activity this quarter. However, selling expenses as a percentage of sales were 14 percent in the first quarter of 2012, down from 18 percent in the same period last year.
Wholesale
Wholesale's 2012 first quarter sales were $1.2-billion, which was slightly below the record first quarter sales reported in the same quarter last year. Gross profit was $359-million this quarter, compared to the $409-million achieved in the first quarter of 2011. EBITDA of $362-million in the first quarter of 2012 was also lower than the record $412-million reported in the same period last year. The decrease in earnings was primarily the result of lower potash and phosphate sales volumes.
Nitrogen gross profit was $167-million in the first quarter of 2012, which exceeded the $151-million reported in the same period last year due to higher realized sales prices and volumes. Both benchmark and Agrium's realized sales prices were higher for all nitrogen products in the first quarter of 2012 compared to the same period last year. Total nitrogen sales volumes increased over 7 percent this quarter to 805,000 tonnes primarily due to higher ammonia sales. Nitrogen cost of product sold was $269 per tonne this quarter, higher than the $244 per tonne reported in the first quarter of 2011, due primarily to higher production costs at our Carseland facility as a result of unplanned outages and an unplanned major turnaround related to the replacement of a key heat exchanger. Nitrogen margins averaged $208 per tonne this quarter, compared with $202 per tonne in the same period last year. The Egyptian MOPCO nitrogen facility, in which we have a 26 percent equity investment, shut down operations in November of 2011 due to civil unrest, and at this time remains closed. It did, however, contribute $3-million in earnings this quarter as we receive and account for their results on a three month delay.
Agrium's average natural gas cost in cost of product sold was $3.11/MMBtu ($3.62/MMBtu including the impact of realized losses on natural gas derivatives) this quarter, compared to $3.90/MMBtu for the same period in 2011 ($4.11/MMBtu including the impact of realized losses on natural gas derivatives). Hedging gains or losses on all gas derivatives are not taken into account for the calculation of gross profit and are included in other expenses and therefore not included in cost of product sold. The U.S. benchmark (NYMEX) natural gas price for the first quarter of 2012 was $2.77/MMBtu, compared to $4.14/MMBtu in the same quarter last year and $3.61/MMBtu in the fourth quarter of 2011. The AECO (Alberta) basis differential was a $0.25/MMBtu discount to NYMEX in the first quarter of 2012, which was slightly lower than the $0.32/MMBtu differential that existed in the first quarter of 2011.
Potash gross profit for the first quarter of 2012 was $87-million, compared to $125-million in the same quarter last year. The decrease was due to a combination of lower sales volumes and higher cost of goods sold as a result of curtailed standard potash production related to lower standard grade demand in the current quarter. This was partially offset by higher realized sales prices. International sales volumes were 117,000 tonnes in the first quarter of 2012, down from the 265,000 tonnes reported in the same quarter last year, as a result of slow international demand. Domestic sales volumes were 162,000 tonnes this quarter, compared to 212,000 tonnes in the first quarter of 2011, due to lower demand from North American retailers. Potash cost of product sold was $184 per tonne this quarter, compared to $147 per tonne in the first quarter of 2011. The increase in per tonne average costs was primarily associated with the higher proportion of potash sold in the domestic market, which has a higher transport cost and realized sales price than the international market, and partly due to fixed costs being allocated over fewer sales tonnes. Gross margin on a per tonne basis was $313 in the first quarter of 2012, compared to the $262 per tonne realized during the same quarter in 2011.
Phosphate gross profit was $63-million in the first quarter of 2012, compared to $95-million in the same quarter last year. This decrease was due to lower sales volumes and higher cost of goods sold. Total phosphate sales volumes were 243,000 tonnes this quarter, a decrease of 63,000 tonnes from the same period last year as a result of lower North American retailer demand. Phosphate cost of product sold was $520 per tonne in the first quarter of 2012, compared to $468 per tonne in the same period last year, primarily due to higher ore and sulfur costs. On a per tonne basis, gross margin in the first quarter of 2012 decreased to $260 per tonne, compared to $310 per tonne in the same period last year.
Wholesale's Other product category, which is primarily comprised of ammonium sulfate and Rainbow granulated products, achieved gross profit of $30-million in the first quarter of 2012, compared to $22-million in the same period last year. The increase in gross profit this quarter was mainly due to higher realized prices for both product categories, which was partially offset by higher sulfur cost.
Gross profit from product purchased for resale was $12-million this quarter, down from $16-million in the first quarter of 2011.
Wholesale expenses in the first quarter of 2012 were $33-million, compared to $32-million in the first quarter of 2011.
Advanced Technologies
AAT gross profit was $21-million in the first quarter of 2012, a 31 percent increase over the $16-million reported in the first quarter of 2011. The increase was primarily attributable to higher sales volumes of ESN, despite the outage this quarter at our Carseland nitrogen facility. This was supported by early spring weather, as well as contributions to gross profit from acquisitions made in the second half of 2011.
EBITDA was $2-million this quarter, exceeding the $1-million achieved in the first quarter of 2011. Stronger sales and gross profit in the first quarter of 2012 were partially offset by higher selling and general and administrative expenses, as compared to the same period last year. Selling and general and administrative expenses for AAT were $6-million higher this quarter versus the same period in 2011, due primarily to acquisitions made in the second half of 2011.
Other
EBITDA for our Other non-operating business unit for the first quarter of 2012 was a loss of $128-million, compared to a loss of $93-million for the first quarter of 2011. The increase in loss was primarily driven by a $52-million increase in share-based payments expense, where there was a $64-million charge in the first quarter of 2012 compared to a $12-million charge in the same quarter of 2011, largely caused by the effect of appreciation of our share price during the first quarter of 2012. This was offset by reduced expenses in the first quarter of 2012 due to the rationalization of Australian corporate operations.
A $33-million increase in gross profit at March 31, 2012 compared to March 31, 2011 reflected less inter-segment inventory not yet sold to external customers.
FINANCIAL CONDITION
The following are changes to selected accounts from our Consolidated Balance Sheets in the three-month period ended March 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
Summary of Consolidated Statements of Cash Flows
Below is a summary of our cash provided by or used in operating, investing, and financing activities as reflected in the Consolidated Statements of Cash Flows:
The sources and uses of cash for the three months ended March 31, 2012 compared to the three months ended March 31, 2011 are summarized below:
Capital Expenditures
Our sustaining and investing capital expenditures increased in the first quarter of 2012 compared to the first quarter of 2011 due to activity on the Vanscoy potash expansion project.
(a) Outstanding letters of credit issued under our North American facilities at March 31, 2012 were $173-million reducing credit available under the facilities.
Capital Management
In April 2012, we filed a base shelf prospectus in Canada and the U.S. permitting the issuance of up to $2.5-billion of common shares, preferred shares, subscription receipts, debt securities or units over the 25-month period that the base shelf prospectus remains effective. The base shelf replaced a base shelf prospectus that expired in 2011. We have not issued securities under the base shelf prospectus.
OUTSTANDING SHARE DATA
The number of Agrium's outstanding shares as at April 30, 2012 was approximately 158-million. As at April 30, 2012, the number of shares issuable pursuant to stock options outstanding (issuable assuming full conversion, where each option granted can be exercised for one common share) was approximately 0.1 million.
The agricultural products business is seasonal in nature. Consequently, comparisons made on a year-over-year basis are more appropriate than quarter-over-quarter. Crop input sales are primarily concentrated in the spring and fall crop input application seasons, which are in the second quarter and fourth quarter. Crop nutrient inventories are normally accumulated leading up to the application season. Cash collections generally occur after the application season is complete in the Americas and Australia.
BUSINESS ACQUISITION
On March 19, 2012, we signed an agreement to acquire the majority of the Agri-products business of Viterra Inc. ("Viterra"), consisting of approximately 90 percent of Viterra's 258 Canadian farm centres; 17 Australian retail farm centres; a 34 percent interest in a nitrogen facility in Medicine Hat, Canada; storage and distribution assets; an option to acquire Viterra's wool business in Australia; and other assets and liabilities. The purchase price is expected to be approximately $1.65-billion, including estimated working capital of $500-million. For further information on this agreement, please refer to Form 51-102F3, Material Change Report, dated March 20, 2012 filed on SEDAR at .
NON-IFRS FINANCIAL MEASURES
In the discussion of our performance for the quarter, in addition to the primary measures of earnings and earnings per share reported in accordance with IFRS, we make reference to EBITDA. We consider EBITDA to be a useful measure of performance because income tax jurisdictions and business segments are not synonymous and we believe that allocation of income tax charges distorts the comparability of historical performance for the different business segments. Similarly, financing and related interest charges cannot be allocated to all business units on a basis that is meaningful for comparison with other companies.
EBITDA is not a recognized measure under IFRS, and our method of calculation may not be comparable to other companies. Similarly, EBITDA should not be used as an alternative to net earnings from continuing operations as determined in accordance with IFRS.
The following table is a reconciliation of EBITDA to consolidated net earnings from continuing operations as determined in accordance with IFRS:
CRITICAL ACCOUNTING ESTIMATES
We prepare our financial statements in accordance with IFRS, which requires us to make assumptions and estimates about future events and apply significant judgments. We base our assumptions, estimates and judgments on our historical experience, current trends and all available information that we believe is relevant at the time we prepare the financial statements. However future events and their effects cannot be determined with certainty. Accordingly, as confirming events occur, actual results could ultimately differ from our assumptions and estimates. Such differences could be material. For further information on the Company's critical accounting estimates, please refer to the "Critical Accounting Estimates" section of our 2011 annual Management's Discussion and Analysis, which is contained in our 2011 Annual Report. Since the date of our 2011 annual Management's Discussion and Analysis, there have not been any significant changes to our critical accounting estimates and judgments.
CHANGES IN ACCOUNTING POLICIES
For information regarding changes in accounting policies, please refer to the "Accounting Standards and Policy Changes Not Yet Implemented" section of our 2011 annual Management's Discussion and Analysis, which is contained in our 2011 Annual Report.
BUSINESS RISKS
The information presented on Enterprise Risk Management and Key Business Risks on pages 68 - 71 in our 2011 Annual Report has not changed materially since December 31, 2011.
CONTROLS AND PROCEDURES
There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PUBLIC SECURITIES FILINGS
Additional information about our company, including our 2011 Annual Information Form is filed with the Canadian securities regulatory authorities through SEDAR at and with the U.S. securities regulatory authorities through EDGAR at .
OUTLOOK, KEY RISKS AND UNCERTAINTIES
Global agricultural fundamentals strengthened in the first quarter of 2012, driven by a combination of reduced corn and soybean production projected for South America and robust global demand. The United States Department of Agriculture ("USDA") projects that the U.S. corn stocks-to-use ratio will be the second lowest on record at the end of the 2011/12 corn crop year on August 31st. The tight U.S. corn supply/demand balance has contributed to a strong price incentive to plant corn. The March 30, 2012 USDA Prospective Plantings report estimated U.S. corn acreage intentions of 96 million acres, which would be the highest planted area of corn since 1937. The Prospective Plantings report also estimated a record planted acreage of corn and soybeans combined and the highest area of major crops in the U.S. since the introduction of the Conservation Reserve Program in the mid-1980s. Historically high U.S. acreage is expected to drive strong demand for crop nutrients, seed, crop protection products and agronomic services in 2012.
The U.S. market was a significant driver of crop nutrient demand in the first quarter of 2012. A relatively mild winter has led to an early spring season, leading to a faster than normal start to the application season. The early season combined with higher corn and other crop acreage figures resulted in a surge in North American demand for nitrogen. Demand for phosphate and potash has also been very strong in North America and other northern hemisphere markets. As of May 6, 2012, the USDA reports that U.S. corn planting is 71 percent complete, relative to 32 percent in 2011 and 47 percent on average.
Strong North American demand drove a significant rally in nitrogen prices in late first quarter of 2012, while North American natural gas prices traded at the lowest levels since 2001 by the end of the first quarter. We expect North American nitrogen consumption to increase by 1 to 3 percent in the 2011/12 fertilizer year. Offshore imports of urea into North America were down about 10 percent in the first eight months of the 2011/12 fertilizer year, due to buyer caution regarding inventory management for the spring season, which contributed to a supply deficit. Tight supply availability combined with an earlier than expected start to the season led U.S. Gulf urea prices to increase by more than 80 percent from the end of January to mid-April. Globally, urea prices also increased significantly, as demand emerged from Europe and South America. Indian urea purchases normally pick up after the first quarter and most analysts expect an increase in Indian import demand in 2012. Supply problems have also contributed to the urea shortfall in part due to unplanned outages in North America and Pakistan, as well as delays in new projects in Qatar and Algeria. The Qatar facility has recently started operations and the Algerian nitrogen facility is expected to ramp up in the third quarter of 2012. Chinese export supplies will also be available in the July to October export window. The Argentine government's decision to nationalize most of Repsol's share of YPF is not expected to impact the Profertil nitrogen facility although YPF's representative on the Profertil Board has been replaced with a government appointed representative. The Egyptian nitrogen plant, in which we have a 26 percent equity interest, remains shut down at this time. However, there are some promising signs that progress is being made on this front and we are cautiously optimistic that the facility may be allowed to restart in the near future.
Phosphate prices declined in the first quarter of 2012, driven by weak demand and uncertainty about India. In response to slow demand, phosphate producers have reduced production. The Fertilizer Institute ("TFI") reported that first quarter 2012 DAP/MAP production in the U.S. was down 9 percent from the first quarter of 2011 levels. In recent weeks, prices have been supported by strong demand in both the U.S. and South America. India has made small DAP purchases and most analysts expect larger scale purchases to occur in the near future. There is potential that the recent improvement in the phosphate market, may encourage additional purchases among buyers that delayed in the midst of market volatility in late 2011 and early 2012. The Ma'aden Phosphate Company in Saudi Arabia is reportedly having difficulties with phosphate rock processing which has held capacity utilization rates below 50 percent. The Chinese phosphate export period runs from June through September. The Chinese government has tightened the restrictions on TSP and NP fertilizer exports, but slightly reduced the export tax on DAP and MAP. Most analysts expect lower total phosphate exports from China as a result, but DAP/MAP exports may increase if global demand is strong.
Global potash shipments were down significantly in the first quarter of 2012 due to cautious purchasing behavior and the ability of dealers to fill initial grower demand from inventories. In response to the decline in demand, North American potash production declined by 25 percent in the first quarter of 2012 compared to the same period last year according to TFI data. North American shipments, which declined more than most markets in the first quarter, are expected to rebound as pipeline inventories of potash have been significantly reduced by relatively strong grower-level demand. Brazilian potash imports were down 14 percent in the current quarter compared to last year. Most analysts expect Brazil, which became the largest seaborne importer of potash in 2011, to have relatively flat import demand in 2012 however, continuing strong grain and oilseed prices may result in some import demand growth this year. China finalized agreements with its major suppliers in March. Chinese potash imports in 2012 are expected to be flat to higher than 2011 levels, but this will depend on supply agreements in the second half of the year. The increased certainty provided by Chinese supply agreements contributed to the emergence of pent up demand in South America and Southeast Asia in recent weeks. India is delaying purchases of potash in its 2012/13 agricultural year similar to a year ago, leading to the expectation that 2012 import demand will be relatively flat to 2011 levels. We expect global potash shipments to be 52 to 55 million tonnes in 2012, down from approximately 55 million tonnes in 2011, due to the low level of potash shipments experienced in the first quarter of 2012.
Forward-Looking Statements
Certain statements and other information included in this MD&A constitute "forward-looking information" within the meaning of applicable Canadian securities legislation or constitute "forward-looking statements" within the meaning of applicable U.S. securities legislation (collectively, the "forward-looking statements"). All statements in this MD&A, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to, statements as to management's expectations with respect to: future crop and crop input volumes, demand, margins, prices and sales; business and financial prospects; and other plans, strategies, objectives and expectations, including with respect to future operations of Agrium. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements.
All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although Agrium believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include Agrium's ability to successfully integrate and realize the anticipated benefits of its already completed and future acquisitions, including the acquisition of retained AWB businesses and the proposed acquisition of the Agri-products business of Viterra.
Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements, include, but are not limited to: general economic, market and business conditions, weather conditions including impacts from regional flooding and/or drought conditions; crop prices; the supply and demand and price levels for our major products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof, and political risks, including civil unrest, actions by armed groups or conflict. There is a risk that the Egyptian Misr Fertilizers Production Company S.A.E. ("MOPCO") nitrogen facility in Egypt may not be allowed to restart production or proceed with the completion of the two new facilities. Additionally, there are risks associated with Agrium's recent acquisition of AWB, including: size and timing of expected synergies could be less favourable than anticipated; AWB is subject to dispute and litigation risk (including as a result of being named in litigation commenced by the Iraqi Government relating to the United Nations Oil-For-Food Programme), as well as counterparty and sovereign risk; and other risk factors detailed from time to time in Agrium reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States. Furthermore, there are risks associated with the proposed acquisition of the Agri-products business of Viterra, including: completion of the acquisition of Viterra by Glencore International plc and the subsequent acquisition of the assets proposed to be purchased by Agrium, as well as the timing thereof; the receipt of the necessary regulatory approvals in respect of the assets proposed to be purchased by Agrium and the satisfaction of other conditions precedent to closing; potential liabilities associated with the assets proposed to be assumed by Agrium, which may not be known to Agrium at this time due, in part, to the fact that the nature of the transaction did not allow for Agrium to complete customary due diligence prior to entering into the agreement to purchase the assets; and the amount of the final purchase price for the purchased assets.
Agrium disclaims any intention or obligation to update or revise any forward-looking statements in this press release as a result of new information or future events, except as may be required under applicable U.S. federal securities laws or applicable Canadian securities legislation.
OTHER
Agrium Inc. is a major Retail supplier of agricultural products and services in North America, South America and Australia and a leading global Wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America through our Advanced Technologies business unit. Agrium's strategy is to grow across the value chain through acquisition, incremental expansion of its existing operations and through the development, commercialization and marketing of new products and international opportunities. Our strategy places particular emphasis on growth opportunities that both increase and stabilize our earnings profile in the continuing transformation of Agrium.
A WEBSITE SIMULCAST of the 2012 1st Quarter Conference Call will be available in a listen-only mode beginning Wednesday, May 9, 2012 at 9:30 a.m. MT (11:30 a.m. ET). Please visit the following website: .
1. CORPORATE INFORMATION
Corporate information
Agrium Inc. ("Agrium") is incorporated under the laws of Canada with common shares listed under the symbol "AGU" on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX). Agrium (with its subsidiaries) is a major retail supplier of agricultural products and services in North and South America, Australia and Europe and a leading global producer and marketer of agricultural nutrients and industrial products. We produce and market three primary groups of nutrients: nitrogen, phosphate and potash as well as controlled-release crop nutrients and micronutrients. Our Corporate head office is located at 13131 Lake Fraser Drive S.E. Calgary, Alberta, Canada. Our operations are conducted globally from our Wholesale head office in Calgary, and our Retail and Advanced Technologies head offices in Loveland, Colorado, U.S.
Agrium operates three strategic business units:
Basis of preparation and statement of compliance
These consolidated interim financial statements ("interim financial statements") were approved for issuance by the Audit Committee on May 8, 2012. We prepared these interim financial statements in accordance with IAS 34 Interim Financial Reporting. They do not include all information and disclosures normally provided in annual financial statements and should be read in conjunction with our audited annual financial statements and related notes contained in our 2011 Annual Report, available at . We have prepared these interim financial statements using the same accounting policies and critical accounting estimates we applied in our 2011 Annual Report.
Seasonality in our business results from increased demand for our products during planting seasons. Sales are generally higher in spring and fall.
2. BUSINESS ACQUISITION
On March 19, 2012, we signed an agreement to acquire the majority of the Agri-products business of Viterra Inc. ("Viterra"), consisting of approximately 90 percent of Viterra's 258 Canadian farm centres; 17 Australian retail farm centres; a 34 percent interest in a nitrogen facility in Medicine Hat, Canada; storage and distribution assets; an option to acquire Viterra's wool business in Australia; and other assets and liabilities (collectively the "Agrium Assets").
Key features of the agreement:
3. DISCONTINUED OPERATIONS
Discontinued operations in 2012 consist of a business of AWB Limited ("AWB") acquired in 2010 and sold in April 2012. Sales from discontinued operations for the three months ended March 31, 2012 were $65-million. Comparative figures for 2011 include operations of AWB businesses sold in May 2011.
The Board of Directors granted 250,831 Performance Share Units on January 1, 2012 and 258,132 Tandem Stock Appreciation Rights with a grant price of $88.27 on March 20, 2012 to officers and employees.
6. PROPERTY, PLANT AND EQUIPMENT
During the three months ended March 31, 2012, we added $114-million to assets under construction at our Vanscoy Potash facility.
During the three months ended March 31, 2012, we recorded an asset retirement obligation for the phosphogypsum stack system at our Conda, Idaho phosphate facility. Included in the provision of $139-million are costs to address phosphogypsum stack decommissioning at the Conda facility, including post-closure monitoring. The provision was based on negotiations with government authorities, which are ongoing. Timing of the expenditures is contingent on, among other things, the completion of negotiations with government authorities, completion of engineering and planning for the work, and approval of engineering and planning by government authorities. Because various circumstances may affect the timing and amount of expenditures, we may change our provision as new information becomes available.
(a) Outstanding letters of credit issued under our North American facilities at March 31, 2012 were $173-million reducing credit available under the facilities.
In April 2012, we filed a base shelf prospectus in Canada and the U.S. permitting the issuance of up to $2.5-billion of common shares, preferred shares, subscription receipts, debt securities or units over the 25-month period that the base shelf prospectus remains effective. The base shelf replaced a base shelf prospectus that expired in 2011. We have not issued securities under the base shelf prospectus.
We do not measure any of our financial instruments using Level 3 inputs. There have been no transfers between Level 1 and Level 2 fair value measurements in the reporting period ended March 31, 2012.
(1) Earnings (loss) from continuing operations before finance costs, income taxes, depreciation and amortization.
(2) Earnings (loss) from continuing operations before finance costs and income taxes.
(1) Includes depreciation and amortization.
(2) International Retail net sales were $585-million (2011 - $575-million) and gross profit was $109-million (2011 - $108-million) for the three months ended March 31.
Contacts:
Agrium Inc.
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Vice President, Investor & Corporate Relations
(403) 225-7357
Agrium Inc.
Todd Coakwell
Manager, Investor Relations
(403) 225-7437
Agrium Inc.
Mark Thompson
Analyst, Investor Relations
(403) 225-7761
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 09.05.2012 - 11:15 Uhr
Sprache: Deutsch
News-ID 144336
Anzahl Zeichen: 0
contact information:
Town:
CALGARY, ALBERTA
Kategorie:
Commodity Chemicals
Diese Pressemitteilung wurde bisher 262 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Agrium reports excellent first quarter operating results; crop input market expected to remain strong"
steht unter der journalistisch-redaktionellen Verantwortung von
Agrium Inc. (Nachricht senden)
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