Fertilizer company Nutrien hikes dividend, plans share buybacks

·2 min read

CALGARY — The CEO of Nutrien Ltd. says the fertilizer company will continue to grow organically as well as through acquisitions as it increases its dividend and launches a new share buyback program.

The Saskatoon-based company is poised to ride a continuing recovery in agriculture in 2021 that will be marked by higher fertilizer prices and volumes as well as the implementation of new technologies and products for its farm customers around the world, said Chuck Magro.

"The setup is excellent for the spring season in North America, assuming we get normal weather," he said on a Thursday conference call.

"We could be seeing the start of a multi-year cyclical recovery in agriculture and crop inputs."

The company, which reports in U.S. dollars, noted net earnings of US$316 million or 55 cents per share on sales of $4.05 billion in the fourth quarter, compared with a loss of $48 million or eight cents on sales of $3.46 billion in the same period a year ago.

Nutrien was expected to report net earnings of $81.3 million or 15 cents per share, according to financial data firm Refinitiv.

The company expects adjusted earnings before interest, taxes, depreciation and amortization of $4 billion to $4.5 billion in 2021, up from reported 2020 EBITDA of $3.67 billion.

Nutrien is counting on more imports of grain and oilseeds to ease food inflation and rebuild the disease-struck hog herds in China and higher planted acreage globally as crops prices rise — with total planted acreage to increase by about four million hectares in the U.S. alone, Magro said.

The company's quarterly dividend is being raised for the third time in three years to 46 cents per share, up a penny, and it says it plans to buy back up to five per cent of its shares over the next year.

Nutrien says fourth-quarter adjusted earnings rose by 29 per cent compared with the year-earlier period in its Retail Ag Solutions division, by 48 per cent in potash and by three per cent in nitrogen fertilizer.

The recent unusually cold weather in the United States has resulted in 10 to 12 nitrogen fertilizer plants being shut down in the past week and the resulting shortfall in production will support higher prices in the spring, said Raef Sully, Nutrien's CEO of phosphate and nitrogen, on the call.

The cold resulted in higher demand and escalating spot prices for natural gas, the base component in making nitrogen fertilizer, while forcing the shut down of gas-producing wells, he said.

"Most of them are selling off their gas supply because of the impact we've seen on pricing," he said.

This report by The Canadian Press was first published Feb. 18, 2021.

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Dan Healing, The Canadian Press