Agrium 2Q Profit Up 20% On Strong Demand; Plans Issuer Bid
08/03/2012| 07:42am US/Eastern
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By Judy McKinnon
Agrium Inc. (>> Agrium Inc.) said late Thursday that second-quarter earnings were up 20% to a record level, as sales benefited from strong demand for all crop input products and services.
The Calgary, Alberta-based fertilizer company, which last month bumped up guidance for the quarter on robust demand and a strong outlook, earned $860 million, or $5.44 a share, up from $718 million, or $4.54, a year earlier.
Adjusted to exclude items such as a gain on natural-gas and other hedge positions and a share-based payment expense, earnings were $5.47 a share in the latest period.
Results were in line with Agrium's latest projection for a profit of $5.40-$5.50 a share. Analysts polled by Thomson Reuters were expecting $5.22 a share.
Agrium said sales for the quarter rose 10% to $6.83 billion, also better than the $6.60 billion analysts had forecast. Retail sales were up 12%, while wholesale sales were little changed.
Agrium reports in U.S. dollars.
Separately, Agrium said it has reached an agreement for Glencore International plc (>> Glencore International Plc) to sell Viterra Inc.'s (VT.T) minority stake in a nitrogen facility in Medicine Hat, Alberta to CF Industries Holdings Inc. (>> CF Industries Holdings, Inc.) for 915 million Canadian dollars (US$908 million). Agrium earlier this year agreed to buy most of Viterra's agri-products business - including the minority stake in the nitrogen facility - on closing of Glencore's C$6 billion purchase of grain-handler Viterra.
Agrium said "following today's announcement, Agrium's purchase price for the majority of Viterra's agri-retail business is even more attractive."
It said the resulting net purchase price for Viterra's retail business is estimated at about C$175 million, plus about C$400 million in retail working capital.
The fertilizer company also announced a Dutch auction substantial issuer bid for C$900 million of its outstanding shares. It said pricing for the buyback, which is expected to start early next month, hasn't yet been determined.
"The sale of the Medicine Hat nitrogen facility has provided us with an excellent opportunity to return excess capital to our shareholders," Agrium said.
Write to Judy McKinnon at judy.mckinnon@dowjones.com
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