Potash Corporation of Saskatchewan Inc. has released a preliminary financial report that shows the fertilizer company’s fourth-quarter earnings were down about 71 per cent from the year earlier, mostly due to weak prices and profit margins.
Excluding asset impairment items, which haven’t been calculated and not estimated in the preliminary report, PotashCorp’s net income for the fourth quarter was US$59 million — down from US$201 million a year earlier.
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PotashCorp said its full audited results including asset impairment charges, if any, will be filed by late February.
The Saskatoon-based company, which reports in U.S. currency, says earnings per share excluding asset writedowns, fell to seven cents per share from 24 cents per share.
Its sales revenue fell by nearly $300 million to $1.06 billion from $1.35 billion in the fourth quarter of 2015.
In 2017, PotashCorp expects earnings between 35 and 55 cents per share – lower than many analyst predictions.
“That predominantly probably relates to the phosphate business, which has turned out to be a little weaker than most people were probably looking for,” said Fai Lee, equity analyst with Odlum Brown.
All three of the company’s main product lines — potash, nitrogen and phosphate fertilizers — were affected by weak prices. Potash sales volumes were up 27 per cent from the fourth quarter of 2015, and other volumes were little-changed.
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Estimates compiled by Thomson Reuters shows revenue was in line with analyst expectations but the earnings per share were below the consensus estimate of nine cents per share, excluding asset impairments.
Potash made up 20 per cent of Saskatchewan’s exports in 2015, which was second only to oil.
With files from Ryan Kessler
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