Nutrien permanently closes New Brunswick facility

6th November 2018 By: Mariaan Webb - Creamer Media Senior Deputy Editor Online

Nutrien permanently closes New Brunswick facility

The New Brunswick potash facility

Potash major Nutrien said that it would permanently close the idled New Brunswick potash facility and that it had recorded a $1.8-billion noncash impairment in its third-quarter results, which were announced on Monday.

In early 2016, when Nutrien was still known as Potash Corp of Saskatchewan before its merger with Agrium, the Piccadilly mine, in New Brunswick, was placed on care and maintenance as the company's focus shifted to its lower-cost mines in Saskatchewan.

Nutrien said on Monday that the decision to close the New Brunswick potash facility reflected its ability to increase potash production in Saskatchewan at a “significantly lower operating and capital cost than resuming production in New Brunswick”.

The crop nutrient producer reported a loss from continuing operations of $1.1-billion, or $1.74 a share, reflecting the $1.8-billion noncash impairment of the New Brunswick facility and a $151-million gain on the adjustment of pension and other post-retirement benefits.

Excluding these items, Nutrien posted adjusted net earnings of $0.47 a share and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $839-million.

Earnings were supported by higher sales volumes and realised prices in potash and nitrogen, owing to strong global demand and tight supply.

Potash sales volumes were up 17% year-on-year to 3.86-million tonnes on the back of strong demand in the North American market. The weighted average price for potash was up 19% to $212/t in the third quarter, compared with the prior year’s third quarter, while costs were 4% lower at 93/t.

Nutrien has raised its guidance for potash sales volume to between 12.5-million and 13-million tonnes and also lifted the bottom-end of its potash adjusted Ebitda guidance range from $1.4-billion to $1.5-billion.

The group also increased its nitrogen Ebitda guidance to $1.15-billion to $1.25-billion and the bottom-end of the phosphate and sulphate Ebitda range from $0.2-billion to $0.25-billion.

Based on these, full-year adjusted net earnings are now expected to be in a range of $2.60 to $2.80 a share, from a previous estimate of $2.40 to $2.70 a share. The adjusted Ebitda guidance was increased from between $3.7-billion and $4-billion, to between $3.85-billion and $4.05-billion.

Nutrien further reported $401-million in annual run-rate synergies at September 30, and said that it expected to achieve its $500-million synergy target by the end of this year. The target for annual run-rate synergies has been increased to $600-million by the end of 2019.