Fertilizer producer Agrium Inc. says profit increased 43 per cent in the fourth quarter as it overcame a struggling global economy that has affected commodity prices and made buyers cautious.
The Calgary-based company, which reports in U.S. dollars, says profit rose to $193-million (U.S.), or $1.20 per share, up from $135-million, or 86 cents per share, in the same period of 2010.
"These impressive results were achieved despite global economic uncertainties that impacted commodity prices and led to buyer uncertainty in the later part of the year," said Mike Wilson, Agrium president and chief executive officer.
"We believe that the underlying fundamentals for the agriculture sector remain strong as crop inventory levels for most crops remain well below normal levels and in some cases are critically low," he said.
The results included an impairment charge of $61-million, or 30 cents per share, related to its investment in Hanfeng Evergreen Inc., the largest producer of slow and controlled release fertilizer in China and Indonesia. Hanfeng reported a loss in its most recent quarter as production cuts for planned maintenance sharply reduced revenue.
Agrium's sales were up 32 per cent to $3.18-billion.
Excluding that charge, net earnings from continuing operations would have been $374-million, or $2.34 per share.
The adjusted earnings beat analysts expectations. Analysts polled by Thomson Reuters were on average expecting earnings of $2.08 per share and revenue of $2.9-billion.
Losses recorded from discontinued operations of $134-million during the quarter included an inventory writeoff of $85-million related to an insurance claim regarding "misappropriated" soybean inventory.
Calgary-based Agrium produces the three main types of fertilizer: nitrogen, phosphate and potash. It also sells farm products at retail outlets across North America, with a growing presence in South America and Australia.
Late last year it approved a one-million tonne expansion to its Vanscoy potash mine in Saskatchewan. The project will increase capacity by 50 per cent at a cost of $1.5-billion.
Construction is scheduled to begin this year and wrap up in 2014.
Currently Vanscoy, Agrium's only potash plant, accounts for three per cent of world potash capacity, making the company the 10th largest producer.
In December Agrium also announced a quadrupling in its semiannual dividend to 22.5 cents per share, reflecting a bullish outlook for its retail and wholesale businesses. The higher dividend started being paid on Jan. 19.
Full year net earnings were $1.4-billion or $8.68 per share, up from $713-million or $4.51 per share in 2010.
Mr. Wilson said the company has a positive outlook about the 2012 busy season.
"As the spring planting season approaches, farmers have a strong incentive to plant record acreage and optimize the use of Agrium's full array of crop input products and services to maximize crop production" he said.