TORONTO (miningweekly.com) – Fertiliser product group Potash Corporation of Saskatchewan earned $449,2-million in the first quarter, a 46% increase from a year earlier, after buyers returned to the market for all three of the company's nutrients.

The most notable improvement was in the demand for potash, which generated 72% of the company's total first-quarter gross margin of $715,1-million.

Earnings before interest, taxes, depreciation and amortisation rose to $763,2-million for the quarter, from just $290,9-million a year earlier.

After the financial crisis hit, farmers cut their use of fertilisers dramatically, in a move to lower costs.

Producers like Potash Corp have been predicting for almost a year that the low nutrient levels in soils would force buyers back to the market, and CEO Bill Doyle admitted last year that it was taking longer than he expected.

The tide turned in the first quarter of this year, though, and by the end of the quarter recovering demand had pushed potash inventories for North American producers almost 40% below year-end levels and more than 20% lower than the previous five-year average, Potash Corp said on Thursday.

“The transition from the challenging environment of 2009 was reflected in our first-quarter earnings,” Doyle said in a statement.

“With soil nutrient shortfalls created by nearly 18 months of substantially reduced fertiliser consumption, farmers began to resume the more scientifically sound fertilization practices essential to sustain crop production.”

The company has maintained a reasonably cautious outlook though, referring to 2010 as a "transition" year.

Potash Corp expects 2010 net income per share will be in the range of $4,5 to $5,25 a share, including $1,00 to $1,30 a share in the second quarter.

The full year guidance is just slightly higher than the $4 to $5 estimate the company provided in January.

Shares in Potash Corp gained C$1,29 apiece on Thursday morning, to C$111,16 apiece by 10:09 in Toronto.

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