PotashCorp adjusts to market challenges

Published 6:25 pm Friday, February 12, 2016

Weak potash, nitrogen and phosphate global markets have led PotashCorp to reduce quarterly dividends and close one of its newest mines in New Brunswick, Canada.

“Weaker fertilizer prices late in the year reduced our earnings for the quarter, giving rise to a more cautious outlook for all three nutrients as we begin 2016,” PotashCorp president and chief executive officer Jochen Tilk stated in a press release.

Potash Corporation of Saskatchewan Inc. reported fourth quarter earnings of 24 cents per share and earning for the full year at $1.52, which fall below earnings during the same periods in 2014: 49 cents per share in the fourth quarter and $1.82 per share for the year.

According to the press release, potash sales decreased by 6 percent for the year, while the price of potash fell from $284 per ton in the fourth quarter in 2014 to $238 per ton during the same period in 2015. Nitrogen sales dropped from $405 to $288 during the same period, prompted by lower energy costs and increased supply. Phosphate sales volumes were largely the same from 2014 to 2015, but did not live up to projected sales volumes and price realizations, according to the release.

The decision to suspend potash production in New Brunswick, resulting in a layoff of more than 400 workers, as well as reduce the quarterly dividend by 34 percent to 25 cents per share, are part of PotashCorp’s plan to protect the company’s long-term financial health, the release said. More than 100 of those employees will be relocated to the company’s Saskatchewan operation, and PotashCorp will establish a $5 million (Canadian) fund to help other employees with job transition assistance, provide financial support to local businesses and support charitable organizations.

According to Ray McKeithan, PotashCorp-Aurora manager of public affairs, there is no indication that its Beaufort County operations will be impacted. PotashCorp-Aurora is the county’s largest employer and its greatest source of tax revenue.

“Of course, we’re concerned about our coworkers in New Brunswick, but it’s my understanding that no other mine closing plans are foreseen and (this) will not impact our operations or future plans in Aurora,” McKeithan said.