Agrium profit lifted by strong agricultural demand
By Euan Rocha
TORONTO (Reuters) - Agrium Inc (AGU.TO: Quote) AGU.N reported a 43 percent rise in quarterly net profit on Wednesday, sending its shares up 3.3 percent in early trading, as higher crop prices led to stronger demand for the seeds, fertilizers and other agricultural products that the Canadian company sells.
Agrium and its competitors have benefited in recent years from strong grain prices and increased food demand from emerging economies. The company quadrupled its semi-annual dividend payout recently following a steady stream of strong results.
That trend continued on Wednesday as the Calgary, Alberta-based company said its fourth-quarter net income increased to $193 million, or $1.20 a share, from $135 million, or 86 cents a share, a year earlier.
Excluding an impairment charge and other one-time items, Agrium said earnings were $2.34 a share. Analysts on average had forecast $1.99, according to Thomson Reuters I/B/E/S.
The company, a major producer of nitrogen-based fertilizers like ammonia and urea, is also the largest North American retailer of agricultural inputs such as seeds, nutrients and crop protection chemicals.
Agrium's better than expected performance in the quarter was largely driven by strength in bulk sales of nitrogen-based crop nutrients. This bodes well for rival CF Industries CF.N, which is another large player in this sector. Shares of CF, which is set to report results next week, rose 1.5 percent in early trading.
Agrium's quarterly sales rose 32 percent to $3.18 billion, helped also by the acquisition of the retail operations of Landmark Australia. Continued...