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PotashCorp lifts dividend on outlook optimism, Q4 profit rises 75%

PotashCorp lifts dividend on outlook optimism, Q4 profit rises 75%

Photo by Reuters

29th January 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – The world’s most significant fertiliser producer PotashCorp of Saskatchewan has lifted its quarterly cash dividend by about 9% on the back of a confident sector outlook as its potash expansion programme is nearing completion.

The Saskatoon, Saskatchewan-based miner on Wednesday declared a cash dividend of $0.38 a share, up $0.03 apiece, payable on May 4.

On Thursday, PotashCorp reported that net income for the three months ended December 31 rose more than 75% to $407-million, or $0.49 a share, as record potash sales boosted the bottom line. The net profit included about $60-million in severance-related charges.

This compared with earnings of $230-million, or $0.26 a share, in the corresponding period a year earlier and $1.79-billion, or $2.04 a share, for the whole of 2013.

The results beat Wall Street analyst estimates of $0.46 a share on revenue of $1.67-billion.

Full-year profit was $1.5-billion, or $1.82 a share, which was at the high end of the company's guidance, but lower than in 2013.

Revenue totalled $1.9-billion in the fourth quarter, a 27% increase over the same period in 2013. For 2014, however, revenues were marginally lower at $7.1-billion compared with $7.3-billion a year earlier.

PotashCorp reported record fourth-quarter potash sales volumes of 2.5-million tonnes.

In contrast to an especially weak demand environment during the second half of 2013, the company said the record pace of global potash shipments evident through the first nine months of last year continued in the fourth quarter. Demand was strong in all key markets, especially offshore, where exports from North American producers increased significantly.

Besides potash, the company produces nitrogen and phosphate products used to boost crop production.

With improved contributions from all three nutrient segments, the fourth-quarter gross margin of $746-million surpassed the $460-million generated during the same period in 2013. For the full year, earnings reached $2.6-billion, slightly below the $2.8-billion earned in 2013.

"As we look ahead, we see a supportive market environment – most notably in potash,” PotashCorp president and CEO Jochen Tilk said.

The company expected to sell between 9.2-million tonnes and 9.7-million tonnes of potash this year.

For the current quarter, PotashCorp estimated profit to come in at between $0.45 and $0.55 a share. Full-year 2015 earnings were expected to trump 2014’s at between $1.90 and $2.20 a share.

Following a marked opening share price on the NYSE on Thursday, PotashCorp stock closed the day slightly down at $36.08 a share.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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