Nutrien Ltd has recently announced its 2Q20 results, with net earnings of US$765 million (US$1.34 diluted earnings per share). 2Q20 adjusted net earnings were US$1.45 per share and adjusted EBITDA was US$1.72 billion. Adjusted net earnings per share and adjusted EBITDA, together with the related guidance, free cash flow including changes in non-cash operating working capital and cash cost of product manufactured are non-IFRS financial measures.
“Nutrien delivered compelling 2Q20 and 1H20 results supported by strong growth in our Retail Ag Solutions earnings and excellent operational performance across our potash and nitrogen business units. Nutrien’s many competitive advantages were apparent this quarter, including the quality of our assets and impressive free cash flow generation, even at the bottom of the commodity cycle. Our digital platform continues to exceed expectations. We now expect to reach US$1 billion in online orders by the end of the year and are introducing new data-driven offerings to help farmers make quicker and more informed decisions for their business,” commented Chuck Magro, Nutrien’s President and CEO.
- Nutrien generated US$1.6 billion in free cash flow, including improvement to its non-cash operating working capital in 2Q20. The Board of Directors approved the quarterly dividend at US$0.45 per share, maintaining the annualised payout at US$1.80 per share which is well within the company’s targeted range.
- Retail Ag Solutions delivered record EBITDA in 2Q20 and 1H20. 1H20 EBITDA was up 20% y/y as a result of double-digit growth in revenue and gross margin, and EBITDA margins surpassing 10%. The company continues to expand in the market, backed by its organic growth strategy which includes growing our proprietary product sales, as well as through accretive investments made over the past year.
- Total sales through the leading digital retail platform exceeded US$700 million in the 1H20, surpassing the company’s annual goal of US$500 million in 1H20. 2Q20 online sales accounted for 45% of North American sales of products that were available for purchase online.
- Potash EBITDA was down 39% in 2Q20 and 1H20 compared to the same periods last year as strong sales volumes and lower cost of goods sold per tonne were more than offset by lower net realised selling prices. Potash cash cost of product manufactured was a record low US$52 / tin 2Q20.
- Nitrogen EBITDA was 16% lower in 1H20 and 17% lower in the 2Q20 compared to the same periods last year due to lower net realised selling prices. However, the company achieved higher sales volumes and lower cost of goods sold per tonne compared to 1H19 and its ammonia utilisation reached a record high of 97% in 2Q20.
- Nutrien issued an aggregate of US$1.5 billion in senior notes in the quarter with average coupon rates below 3%.
- Nutrien acquired Tec Agro Group, a leading agriculture retailer in Goiás, Brazil. Its Brazil operations now include 30 retail locations, two large-scale fertilizer blenders, a premier soybean seed business and specialty nutrition and plant health production facilities. With the addition of Tec Agro Group, its Brazilian operations are expected to generate over US$500 000 000 in revenue on a normalised annual run-rate basis.
- Nutrien released its 2020 Environmental, Social and Governance (ESG) report in April and has since achieved significantly higher ratings by third party ESG organisations.
- Nutrien’s full-year 2020 adjusted net earnings per share and adjusted EBITDA guidance is US$1.50 - US$1.90 per share and US$3.5 billion - US$3.8 billion, respectively. The top end of the guidance range was lowered due to lower ammonia and UAN prices.
Read the article online at: https://www.worldfertilizer.com/special-reports/14082020/nutrien-releases-2q20-results/
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