Agrium Announces Fourth Quarter Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 02/23/15 -- ALL AMOUNTS ARE STATED IN U.S.$
Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today consolidated net earnings ("net earnings") from continuing operations of $70-million ($0.46 diluted earnings per share) for the fourth quarter of 2014, compared with net earnings from continuing operations of $110-million in the fourth quarter of 2013 ($0.74 diluted earnings per share).
The 2014 fourth quarter results included pre-tax share-based payments expense of $25-million ($0.16 diluted earnings per share) and net losses on foreign exchange and derivative positions of $31-million in aggregate ($0.20 diluted earnings per share). The fourth quarter also included a one-time non-recurring tax gain of $7-million ($0.05 diluted earnings per share). Excluding these items, net earnings from continuing operations would have been $115-million ($0.77 diluted earnings per share).(1)
On an annual basis, 2014 net earnings from continuing operations were $798-million ($5.51 diluted earnings per share), down from 2013 net earnings from continuing operations of $1.08-billion ($7.31 diluted earnings per share). 2014 net earnings were $720-million ($4.97 diluted earnings per share), compared to $1.06-billion ($7.20 diluted earnings per share) in 2013. Free cash flow was $746-million in 2014 and free cash flow per share was $5.18.
"Agrium once again benefited from the strength of its competitive advantages and diversity, delivering solid fourth quarter earnings across the Company, despite some headwinds in agricultural markets. We undertook downtime to refresh and expand our potash and nitrogen facilities this quarter, which impacted Wholesale earnings in the short term but will drive higher future capacity and utilization rates. Agrium''s Retail distribution business demonstrated its operational stability in this environment and achieved record earnings again this year, reporting improvements across all target metrics(2) and with EBITDA(3) surpassing $1.1-billion. Nutrient sales this quarter were impacted by a shortened fall application window due to the late harvest and early onset of winter in the U.S., but this will support demand for the coming spring season." commented Chuck Magro, Agrium''s President and CEO.
"For 2015, Agrium is focused on executing our strategy and delivering on our operational excellence targets, including ramping up production at Vanscoy, completing the Borger nitrogen expansion and continuing to grow Retail earnings. The recently announced increase to our target dividend payout ratio and share buy-back program is an illustration of our conviction in the strength of our business and future earnings and cash flow generation capability for the company", concluded Mr. Magro.
All dollar amounts refer to United States ("U.S.") dollars except where otherwise stated. All comparisons for results for the fourth quarter of 2014 (three months ended December 31, 2014) and for the twelve months ended December 31, 2014 are against results for the fourth quarter of 2013 (three months ended December 31, 2013) and the twelve months ended December 31, 2013, respectively.
The financial measures EBITDA, Adjusted EBITDA and Retail - operating coverage ratio, as used in this news release are not prescribed by International Financial Reporting Standards ("IFRS"). Our method of calculation may not be directly comparable to that of other companies. We consider these non-IFRS financial measures to provide useful information to both management and investors in measuring our financial performance and financial condition. These non-IFRS measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. Refer to page 7, "Additional IFRS and Non-IFRS Financial Measures" for further details, including a reconciliation of such measures to their most directly comparable measure calculated in accordance with IFRS.
2014 Fourth Quarter Operating Results
CONSOLIDATED NET EARNINGS
Agrium''s 2014 fourth quarter net earnings from continuing operations were $70-million or $0.46 diluted earnings per share from continuing operations compared to net earnings from continuing operations of $110-million or $0.74 diluted earnings per share from continuing operations for the same quarter of 2013.
Sales
Sales decreased by $162-million for the fourth quarter of 2014 compared to the same period last year. Wholesale sales for the fourth quarter decreased as a result of lower potash and nitrogen sales volumes compared to the fourth quarter of 2013 due to an extended outage to complete the tie-in at our Vanscoy potash facility and an outage at our Redwater nitrogen facility. This decrease was partially offset by an increase in the realized selling price for phosphate compared to fourth quarter of 2013, consistent with benchmark pricing.
Gross Profit
Our gross profit for the fourth quarter of 2014 was $732-million, a decrease of $8-million compared to the fourth quarter of 2013. The main drivers of this variance consisted of:
General and administrative expenses decreased by $13-million in the fourth quarter of 2014. Cash general and administrative expenses decreased by $8-million during the quarter primarily due to a decrease in payroll expense of $5-million. Share-based payments decreased by $3-million due to a lower share price increase during the quarter compared to the same period last year.
During the fourth quarter of 2013, we recorded a purchase gain of $257-million from the Viterra acquisition and goodwill impairment of $220-million in Retail-Australia. No goodwill impairment or purchase gain was recorded in 2014.
Earnings from associates and joint ventures decreased by $27-million in the fourth quarter of 2014 compared to the same period last year due to unscheduled plant outages at our Profertil facility in the fourth quarter of 2014 coupled with the fourth quarter of 2013 having a recovery of $14-million related to a reversal of a gas surcharge provision.
Other expenses increased by $13-million during the fourth quarter of 2014 primarily due to losses on commodity derivatives not designated as hedges due to declining natural gas prices partially offset by a $5-million decrease in potash profit and capital tax related to lower potash production tax accrual in the fourth quarter of 2014.
Effective Tax Rate
The effective tax rate on continuing operations was (4) percent for the fourth quarter of 2014 compared to 24 percent for the same period last year due to the recognition of a previously unrecognized tax asset. Excluding the recognition of a one-time previously unrecognized tax asset of $7-million, the effective tax rate for the fourth quarter of 2014 would have been 6 percent.
BUSINESS SEGMENT PERFORMANCE
Retail
Retail reported fourth quarter sales of $2.1-billion, which is in line with the $2.1-billion reported in the same quarter last year. Gross profit was a record $614-million in the fourth quarter of 2014, a 5 percent increase from last year''s fourth quarter of $586-million. Retail also reported a record EBITDA of $181-million, up $15-million from the fourth quarter of last year (excluding the net effect of one-time acquisition and asset valuation adjustments for Viterra and Retail-Australia made in the fourth quarter of 2013). Retail''s international operations supported these record results with higher margins and EBITDA compared to the same period last year. As well, our solid results were achieved in a lower global crop price environment, a late harvest this fall and an early arrival of winter across much of the U.S. compared to last year. This resulted in a shortened application window this fall that reduced demand for nutrients and delayed grower seed commitments this quarter; however, this was offset by strong results for crop protection products. On a full year basis, EBITDA reached a record $1.1-billion in 2014, surpassing last year''s record of $957-million (which excludes the one-time items mentioned above).
Total crop nutrient sales were $972-million this quarter, down slightly from $1.1-billion in the fourth quarter of 2013. The reduction in sales was due to a 14 percent decline in nutrient volumes in the U.S. this quarter, relative to the fourth quarter of 2013 related to unfavorable weather during the fall nutrient application season. Gross profit for crop nutrients was $156-million this quarter, a decrease of $22-million compared to the $178-million reported in the fourth quarter of 2013. Selling prices for crop nutrients were similar to the fourth quarter of 2013, although per tonne margins declined from $92 per tonne in the fourth quarter of 2013 to $87 per tonne this quarter partly due to a change in the geographic and product mix of the nutrients sold, where a larger percentage of total product sold was outside of the higher profit margin U.S. market. Total crop nutrient margins as a percentage of sales were 16 percent in the fourth quarter of 2014, slightly below the 17 percent reported in the same quarter last year.
Crop protection product sales were $552-million in the fourth quarter of 2014, compared to $511-million in the same period last year. Higher sales were seen late in the fourth quarter, particularly wholesale sales to dealers. Gross profit was $260-million this quarter, compared to $205-million reported in the fourth quarter of 2013. Crop protection margins as a percentage of sales were 47 percent this quarter compared to 40 percent in the same period of 2013. Much of the increase in margins was due to higher rebates during the quarter from achievement of certain sales measures with several significant North American suppliers coming later in the year compared to the same period in 2013.
Seed sales were $91-million in the fourth quarter of 2014, down slightly from the $95-million reported in the fourth quarter of last year. Gross profit was $50-million this quarter, down from $60-million reported in the same period last year. The reduction in sales revenue and gross profit was primarily due to a decrease in planted winter wheat acres and lower supplier rebates this quarter. Seed margins as a percentage of sales were 55 percent in the fourth quarter of 2014, a reduction from the 63 percent reported in the fourth quarter of 2013.
Sales of merchandise in the fourth quarter of 2014 were $211-million, compared to $228-million in the same period last year. Gross profit for this product line was $30-million this quarter, similar to the fourth quarter of 2013. Margins on merchandise sales this quarter were 14 percent, a one percent increase compared to the fourth quarter of 2013. The lower sales and increase in overall margins as a percent of sales was primarily due to exiting the low-margin wool export business in Australia as well as the implementation of a SKU (stock keeping unit) reduction program for general merchandise in Australia.
Services and other sales were $231-million this quarter, compared to the $216-million reported in the fourth quarter of 2013. Gross profit was $118-million in the fourth quarter of 2014, compared to $113-million for the same period last year. The increase was due to strong livestock exports from Australia during the quarter.
Selling expenses as a percentage of sales was 25 percent in the fourth quarter of 2014 which is up marginally from the 24 percent reported in the same period last year. Retail selling expenses were $514-million for the fourth quarter, compared to $504-million in the same period last year. This variance was due to additional businesses purchased since the fourth quarter of 2013, as well as a higher benefit accrual for U.S. employees. On an annual basis, our operating coverage ratio declined to 72 percent this year compared to 73(1) percent in 2013 due to our continued focus on Retail''s Operational Excellence targets during 2014.
Wholesale
Wholesale''s 2014 fourth quarter sales were $897-million, down from the $1.0-billion reported in the same quarter last year. Gross profit was $130-million this quarter, compared to $172-million in the fourth quarter of 2013. Wholesale Adjusted EBITDA was $150-million in the fourth quarter of 2014 compared to $237-million reported in the same period last year. The decrease in earnings was primarily due to the planned downtime at the Vanscoy potash facility to tie-in the one million tonne potash expansion project and lower ammonia sales volumes resulting from the earliest winter season in the U.S. in over ten years. This was partially offset by stronger results for phosphate.
Nitrogen gross profit for the fourth quarter of 2014 was $113-million compared to $129-million in the same quarter last year. Nitrogen sales volumes were 879,000 tonnes, a decrease from the 907,000 tonnes in the same quarter last year. The decrease was primarily due to lower ammonia sales volumes which were impacted by the unusually early onset of winter in the U.S. and downtime at our Redwater nitrogen facility to replace the waste heat boiler within the quarter. Realized sales prices and benchmark prices for most nitrogen products were similar to last year, although urea prices were higher year over year. Nitrogen cost of product sold was $331 per tonne this quarter, slightly above the $314 per tonne reported in the fourth quarter of 2013. Cost of product sold per tonne was impacted by extended maintenance work at the Redwater facility related to the planned replacement of the waste heat boiler this quarter. Average nitrogen gross margins were $128 per tonne this quarter, compared to $144 per tonne in the same period last year.
Agrium''s average natural gas cost included in cost of product sold (which includes transportation and administration costs) was $3.47/MMBtu this quarter ($3.62/MMBtu including the impact of realized losses on natural gas derivatives), compared to $3.51/MMBtu for the same period in 2013 ($3.39/MMBtu including the impact of realized gains on natural gas derivatives). Derivative gains or losses not designated as hedges are included in other expenses and not in cost of product sold, thus are not part of the calculation of gross profit. The average U.S. benchmark (NYMEX) natural gas price for the fourth quarter of 2014 was $3.94/MMBtu, compared to $3.63/MMBtu in the same quarter last year. The AECO (Alberta) basis differential was a $0.77/MMBtu discount to NYMEX in the fourth quarter of 2014, an increase from the $0.62/MMBtu discount in the fourth quarter of 2013.
Potash gross profit for the fourth quarter of 2014 was a loss of $50-million, compared to a profit of $39-million reported in the same quarter last year. Sales volumes were 19,000 tonnes this quarter compared to 344,000 tonnes in the fourth quarter of 2013. The decrease in sales volumes was a result of the Vanscoy mine being out of production for the majority of the fourth quarter to complete the planned tie-in of the one million tonne expansion project. The tie-in was completed and the mine recommenced production in late December 2014. Realized sales prices for potash in North America were $375 per tonne compared to $353 per tonne in the same period last year as all current sales volumes were in the domestic market, which is consistent with a similar increase in benchmark pricing. Gross margin per tonne was impacted by high ongoing costs related to the tie-in activities, which were allocated over very low sales volumes.
Phosphate gross profit was $37-million in the fourth quarter of 2014, compared to a loss of $4-million in the same quarter last year. Phosphate sales volumes were 305,000 tonnes in the fourth quarter of 2014, a 7 percent increase from 285,000 tonnes in the same quarter last year due to strong operating rates and good regional demand. Realized phosphate sales prices were $656 per tonne this quarter compared to $560 per tonne in the same period last year, which is consistent with a similar increase in benchmark pricing. Phosphate cost of product sold was $534 per tonne in the fourth quarter of 2014, a decrease of $42 per tonne compared to the same period last year as a result of improved operating rates and efficiencies at the Redwater facility and lower fixed costs per tonne at both the Redwater and Conda facilities. Gross margin in the fourth quarter of 2014 was $122 per tonne compared to a negative $16 per tonne in the same period last year.
Ammonium sulfate, Environmentally Smart Nitrogen ("ESN®", hereinafter referred to as "ESN") and other gross profit was $27-million this quarter compared to $14-million in the same quarter of 2013. Ammonium sulfate gross profit was $14-million this quarter, $4-million higher than same period last year due to higher sales volumes and realized sales prices. ESN gross profit was $13-million compared to $2-million in the fourth quarter of 2013. This increase is due to higher realized sales prices and lower production costs in the current quarter. Purchase for resale gross profit for the fourth quarter was $9-million higher than the same period last year due to higher margins in the current period.
Wholesale expenses in the fourth quarter of 2014 were $46-million compared to $13-million in the same period last year. The increase is a result of $15-million in natural gas derivative losses in the current quarter (2013 - $3-million gain) largely due to the recent decline in North American natural gas forward curve prices as well as lower realized income from our equity investments in 2014 partly due to a reversal of a gas surcharge provision in 2013.
Other
EBITDA for our Other non-operating business unit for the fourth quarter of 2014 was a net expense of $78-million, compared to a net expense of $94-million for the fourth quarter of 2013. The decrease was primarily due to a $9-million decrease in general and administrative expenses related to lower share-based payments and payroll expenses and $13-million non-recurring Viterra acquisition costs incurred in 2013.
OUTSTANDING SHARE DATA
Agrium had 143,729,524 outstanding shares at January 31, 2015. At that date, under our stock option plans, shares expected to be issued for options outstanding were negligible.
The agricultural products business is seasonal in nature. Consequently, comparisons made on a year-over-year basis are more appropriate than quarter-over-quarter comparisons. Crop input sales are primarily concentrated in the spring and fall crop input application seasons. Crop nutrient inventories are normally accumulated leading up to each application season. Our cash collections generally occur after the application season is complete.
ADDITIONAL IFRS AND NON-IFRS FINANCIAL MEASURES
Certain financial measures in this news release are not prescribed by IFRS. We consider these financial measures discussed herein to provide useful information to both management and investors in measuring our financial performance and financial condition.
In general, an additional IFRS financial measure is a measure relevant to understanding a company''s financial performance that is not a minimum financial statement measure mandated by IFRS. A non-IFRS financial measure generally either excludes or includes amounts not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Non-IFRS financial measures are not recognized measures under IFRS and our method of calculation may not be directly comparable to that of other companies. These non-IFRS measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.
The following table outlines our additional IFRS financial measures, their definitions and how management assesses such measures. As the measures set out below are presented in our Consolidated Financial Statements included in this news release, they are classified as additional IFRS financial measures where they reflect consolidated Agrium and as non-IFRS financial measures where they do not reflect consolidated Agrium, including references to EBITDA when presented on an operating segment basis.
The following table outlines our non-IFRS financial measures, their definitions and usefulness, and how management assesses each measure.
MARKET OUTLOOK
Prices for most major grains and oilseeds increased in the fourth quarter of 2014 compared to the end of the third quarter of 2014, but remained below year ago levels due to the record global production in 2014. Between September 30, 2014 and December 31, 2014, corn, wheat and soybean prices increased by 24 percent, 23 percent and 12 percent respectively, despite a decreasing commodity price environment. Prospective 2015 grower cash margins have moved back up to historical average levels, which we expect to support normal levels of crop input demand in 2015. North American corn and total seeded acreage is expected to decline slightly in 2015; however, this will be dependent on the final size of the South American crop, where weather conditions have been volatile so far this growing season.
The lower crop price environment has had some dampening impact on the crop input market. However, we expect growers will continue to optimize use of crop inputs, including high quality seed offerings, to ensure they maintain crop yield potential and remain competitive. The delayed 2014 harvest in the U.S. combined with historically early arrival of winter weather narrowed the window for application of post-harvest herbicides and crop nutrients. Under our current North American acreage projections, we expect domestic nitrogen, phosphate and potash demand to be slightly lower in 2014/15, but we anticipate that spring demand will be strong as a result of relatively low fall applications.
Global urea demand has been supported by unseasonably strong Indian urea import purchases in the first quarter of 2015. U.S. urea import demand has also been strong, as offshore urea imports were up almost 50 percent in the July through December 2014 period compared to the relatively slow import pace from a year ago. China exported a record 13.6 million tonnes of urea in 2014 and we expect similar export volumes in 2015. The change in the Chinese export tariff to a flat rate year round will likely spread the volumes out more evenly throughout the year, leading to a higher proportion of first half exports and lower proportion of second half exports than has been typical in recent years. We expect the combination of more adequate urea supplies in North America and increased first half export supplies from China will lead to less seasonal volatility in urea prices in 2015.
The global potash market has been relatively stable in recent months. Tightened export supplies resulting from the flooding of a major Russian mine have been partly offset by uncertainty over Chinese potash supply agreements for 2015. We anticipate relatively tight supply and demand conditions in the first half of 2015 due to low beginning inventories in North America, capacity constraints in Canada resulting from ramp-up of brownfield expansions and expected strong North American potash demand this spring. The phosphate market started the year off with some improvement to market conditions due to relatively strong demand and reduced productive capacity primarily in North America. Brazil imported record volumes of phosphate and other nutrients in 2014, in spite of lower commodity prices. While Brazilian imports are projected to decline slightly from 2014 levels due to expected lower crop area and prices, they are anticipated to remain at historically high levels.
Forward-Looking Statements
Certain statements and other information included in this news release constitute "forward-looking information" and/or "financial outlook" 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 news release 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: our 2015 focus on ramping up production at Vanscoy and the continuance of our Borger nitrogen expansion; favorable near-term fundamentals and our expectation that demand will be solid into the spring of 2015; our future earnings and cash flow generation potential; and our 2015 market outlook including anticipated supply and demand for our products and services, expected market and industry conditions, import and export volumes and expected capacity. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements. The purpose of the outlook provided herein is to assist readers in understanding our expected and targeted financial and operating results, and this information may not be appropriate for other purposes.
All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this news release. 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 additional key assumptions that have been made in connection with the forward-looking statements include the assumption that seasonal growing and harvest patterns will be normal in the geographies where Agrium operates in 2015, that Agrium''s 2015 market outlook is accurate and assumptions relating to Agrium''s ability to successfully integrate and realize the anticipated benefits of its already completed and future acquisitions.
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 yield and prices; the supply and demand and price levels for our major products may vary from what we currently anticipate; 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, regional natural gas supply restrictions, as well as counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; the risk that work on the Egyptian Misr Fertilizers Production Company S.A.E. nitrogen facility expansion in Egypt may be interrupted again and may not be completed on the timelines currently anticipated or at all; the risk of additional capital expenditure cost escalation on our Vanscoy potash and Borger nitrogen expansion projects and the ramp-up of production following the recent tie-in of our Vanscoy potash expansion project; 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.
Agrium disclaims any intention or obligation to update or revise any forward-looking statements in this news 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 producer and distributor of agricultural products and services in North America, South America, Australia and Egypt through its agricultural retail-distribution and wholesale nutrient businesses. Agrium supplies growers with key products and services such as crop nutrients, crop protection, seed, and agronomic and application services, thereby helping to meet the ever growing global demand for food and fiber. Agrium produces nitrogen, potash and phosphate fertilizers, with a combined wholesale nutrient capacity of over nine million tonnes and with competitive advantages across all product lines. Agrium retail-distribution has an unmatched network of over 1,300 facilities and over 3,000 crop consultants. We partner with over half a million grower customers globally to help them increase their yields and returns on more than 50 different crops. With a focus on sustainability, the company strives to improve the communities in which it operates through safety, education, environmental improvement and new technologies such as the development of precision agriculture and controlled release nutrient products. Agrium is focused on driving operational excellence across our businesses, pursuing value-enhancing growth opportunities and returning capital to shareholders. For more information visit: .
A WEBSITE SIMULCAST of the 2014 4th Quarter Conference Call will be available in a listen-only mode beginning Tuesday, February 24, 2015 at 7:30 a.m. MST (9:30 a.m. EST). Please visit the following website: .
Contacts:
Investor/Media Relations:
Agrium Inc.
Richard Downey
Vice President, Investor & Corporate Relations
(403) 225-7357
Agrium Inc.
Todd Coakwell
Director, Investor Relations
(403) 225-7437
Agrium Inc.
Louis Brown
Analyst, Investor Relations
(403) 225-7761
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 23.02.2015 - 17:56 Uhr
Sprache: Deutsch
News-ID 1339227
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
CALGARY, ALBERTA
Phone:
Kategorie:
Commodity Chemicals
Anmerkungen:
Diese Pressemitteilung wurde bisher 220 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Agrium Announces Fourth Quarter Results
"
steht unter der journalistisch-redaktionellen Verantwortung von
Agrium Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
