Nutrien’s First Quarter Impacted by Harsh Weather; Maintains Guidance
All amounts are in US dollars
SASKATOON, Saskatchewan–(BUSINESS WIRE)–Nutrien Ltd. (Nutrien) announced today its 2019 first-quarter results,
with net earnings from continuing operations of $41 million ($0.07
diluted earnings per share). First-quarter adjusted net earnings was
$0.20 per share and adjusted EBITDA was $697 million.
Adjusted net earnings (total and per share amounts), adjusted EBITDA and
related annual guidance are non-IFRS financial measures. See pages 2 and
15 for further information.
“Nutrien’s first-quarter adjusted EBITDA was 22 percent higher than 2018
despite being impacted by the second wettest six-month period in the US
in 125 years. While some regions are still receiving excess moisture,
planting is underway and we expect strong crop input demand in the
second quarter. As such, we are maintaining our annual guidance for
2019,” commented Chuck Magro, Nutrien’s President and CEO.
“Our organization is focused on what it can control and how best to
deliver long-term value to stakeholders. In the first quarter, we
allocated almost $1 billion towards growing our Retail business in core
markets and repurchased over $800 million of our stock. We also continue
to pursue operational enhancements across our world-class integrated
network and to lead the way in digital transformation of the ag-retail
industry,” added Mr. Magro.
Highlights:
-
Retail EBITDA in the first quarter was lower compared to the same
period last year due to an extremely wet spring season and flooding in
parts of the US. Continued progress was made on Nutrien Ag Solutions
digital platform, with customers representing 58 percent of our North
American Retail sales signed up on the platform within nine months of
launch. -
Potash EBITDA was 41 percent higher in the first quarter compared to
the same period last year due to higher net selling prices and strong
offshore demand, partially offset by lower North American sales. -
Nitrogen EBITDA in the first quarter was slightly higher than the same
period last year due mainly to higher urea and UAN prices being offset
by lower total sales volumes resulting from the excess wet weather
across the US. -
We strengthened our US Retail business including the acquisitions of
Actagro, LLC, Van Horn, Inc., and Security Seed and Chemical, Inc.,
and completing the remainder of the Agrichem acquisition in Brazil
with combined annual revenue of approximately $400 million for these
businesses. We also entered into a binding agreement to acquire
Ruralco Holdings Limited, the third largest agriculture retailer in
Australia. -
Nutrien achieved $621 million in annual run-rate synergies as at March
31, 2019, surpassing the target of $600 million for the end of 2019.
This represents a 24 percent increase from the original target of $500
million and was achieved well ahead of schedule. -
Nutrien announced an additional five percent normal course issuer bid
program in February 2019 and to date, has repurchased approximately 21
million shares representing over 3 percent of Nutrien’s outstanding
shares. -
Nutrien full-year 2019 adjusted net earnings per share and adjusted
EBITDA guidance is maintained at $2.80 to $3.20 per share and $4.4
billion to $4.9 billion, respectively. First-half 2019 guidance is
provided at $1.75 to $1.95 adjusted net earnings per share. -
We have provided a new financial data tool on our website, allowing
stakeholders to view our historical annual and quarterly information
in an easy to use and downloadable format. It is located at: https://www.nutrien.com/interactive-datatool
Adjusted Net Earnings
Three Months Ended March 31, 2019 | |||||||||
Dollars (millions), except per share amounts |
Increases
(Decreases) |
Post-Tax |
Per
Diluted Share |
||||||
Net earnings | $ | 41 | $ | 0.07 | |||||
Adjustments: | |||||||||
Merger and related costs | $ | 11 | 8 | 0.02 | |||||
Share-based compensation | 57 | 44 | 0.07 | ||||||
Impairment | 33 | 25 | 0.04 | ||||||
Adjusted net earnings | $ | 118 | $ | 0.20 |
Management’s Discussion and Analysis
The following management’s discussion and analysis (MD&A) is the
responsibility of management and dated as of May 9, 2019. The Board of
Directors (Board) of Nutrien carries out its responsibility for review
of this disclosure principally through its audit committee, comprised
exclusively of independent directors. The audit committee reviews and,
prior to its publication approves this disclosure pursuant to the
authority delegated to it by the Board. The term “Nutrien” refers to
Nutrien Ltd. and the terms “we,” “us,” “our,” “Nutrien” and “the
Company” refer to Nutrien and, as applicable, Nutrien and its direct and
indirect subsidiaries as a group. Additional information relating to
Nutrien (which, except as otherwise noted, is not incorporated by
reference herein), including our 2018 Annual Report dated February 20,
2019, which includes our consolidated financial statements and
management’s discussion and analysis and our Annual Information Form,
each for the year ended December 31, 2018, can be found on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov.
The Company is a foreign private issuer under the rules and regulations
of the US Securities and Exchange Commission (the SEC).
This MD&A is based on the Company’s unaudited interim condensed
consolidated financial statements as at and for the three months ended
March 31, 2019 (interim financial statements) prepared in accordance
with International Financial Reporting Standards as issued by the
International Accounting Standards Board (IFRS) and prepared in
accordance with International Accounting Standard 34 “Interim Financial
Reporting” unless otherwise stated. It contains certain non-IFRS
financial measures and forward-looking statements which are described in
the “Non-IFRS Financial Measures” section which begins on page 15 and
the “Forward-Looking Statements” section on page 12 respectively. For
the definitions of financial and non-financial terms used in this MD&A,
as well as a list of abbreviated company names and sources, see pages
87, 157 and 158 of our 2018 Annual Report. All references to per share
amounts pertain to diluted net earnings (loss) per share and all
financial data are stated in millions of US dollars unless otherwise
noted.
Market Outlook
Agriculture and Retail
-
Trade disruptions continue to impact North American growers. US
soybean exports to China are down 55 percent year-over-year, while
China has also placed import restrictions on two of Canada’s largest
canola exporters. -
Unfavorable weather in the US since the fourth quarter of 2018 has
narrowed the application window. However, the US Department of
Agriculture (USDA) projects corn plantings will reach nearly 93
million acres, which would be the highest since 2016 and favorable for
nutrient demand, seed expenditures and custom application services.
-
We expect a two to four percent increase in North American crop
protection expenditures in 2019 due to higher corn acreage and
increased weed pressure this year given the limited ability for
growers to use post-harvest applications last fall. -
Seed expenditures are also expected to be supported by increased corn
acreage in the US.
Crop Nutrient Markets
-
Global potash market fundamentals have remained strong, as suppliers
are comfortably sold forward in 2019 and Canpotex is fully committed
until June. We maintain our forecast that 2019 deliveries will be
between 67 and 69 million tonnes, underpinned by good affordability in
the US and most key offshore markets, particularly in Brazil and
China. While weak palm oil prices are a headwind for demand in
Southeast Asia, we believe the downside risks are relatively limited
as potash is applied on a wide range of crops in the region. -
We expect strong nitrogen demand to emerge in the second quarter of
2019 from the US, Europe and Latin America. In the US, we expect
overall nitrogen demand will be at historically strong levels in the
second and third quarter with some weather-related product mix shift
towards urea and UAN as opposed to ammonia. In recent weeks, this has
led to NOLA urea prices increasing by almost $50 per tonne from
February lows. -
Slow global demand and lower input costs pressured phosphate prices
over the past quarter, although we expect some support from an
improvement in demand in Latin America, India and the US in the second
quarter.
Financial Outlook and Guidance
Based on the market factors detailed above, we are maintaining 2019
adjusted net earnings guidance of $2.80 to $3.20 per share and adjusted
EBITDA guidance of $4.4 billion to $4.9 billion. First-half 2019
guidance is provided at $1.75 to $1.95 adjusted net earnings per share.
As the 2019 guidance has not changed, all related assumptions and
sensitivities can be found on page 62 of Nutrien’s 2018 Annual Report.
All guidance numbers, including those noted above, are outlined in the
table below:
2019 Guidance Ranges 1 | Low | High | |||||||
Adjusted net earnings per share 2 | $ | 2.80 | $ | 3.20 | |||||
Adjusted first-half net earnings per share 2 | $ |
1.75 |
$ |
1.95 |
|||||
Adjusted EBITDA (billions) 2 | $ | 4.40 | $ | 4.90 | |||||
Retail EBITDA (billions) | $ | 1.30 | $ | 1.40 | |||||
Potash EBITDA (billions) | $ | 1.80 | $ | 2.00 | |||||
Nitrogen EBITDA (billions) | $ | 1.30 | $ | 1.50 | |||||
Phosphate EBITDA (billions) | $ | 0.20 | $ | 0.30 | |||||
Potash sales tonnes (millions) 3 | 13.0 | 13.4 | |||||||
Nitrogen sales tonnes (millions) 3 | 10.6 | 11.0 | |||||||
Depreciation and amortization (billions) | $ | 1.80 | $ | 1.90 | |||||
Merger and related costs (millions) | $ | 50 | $ | 75 | |||||
Effective tax rate on continuing operations | 24 | % | 26 | % | |||||
Sustaining capital expenditures (billions) | $ | 1.00 | $ | 1.10 |
1 See Forward-Looking Statements section starting on page 12.
2
See Non-IFRS Financial Measures section starting on page 15.
3
Manufactured products only. Nitrogen excludes ESN® and Rainbow products.
Consolidated Results
Three months ended March 31 | |||||||||||
(millions of US dollars) |
2019 | 2018 | % Change | ||||||||
Sales 1 | $ | 3,691 | $ | 3,666 | 1 | ||||||
Freight, transportation and distribution | (171 | ) | (208 | ) | (18 | ) | |||||
Cost of goods sold 1 | (2,545 | ) | (2,611 | ) | (3 | ) | |||||
Gross margin | 975 | 847 | 15 | ||||||||
Expenses | (799 | ) | (771 | ) | 4 | ||||||
Net earnings (loss) | 41 | (1 | ) | n/m | |||||||
EBITDA 2 | 596 | 487 | 22 | ||||||||
Adjusted EBITDA 2 | 697 | 569 | 22 |
1 Certain immaterial figures have been reclassified or grouped
together for the three months ended March 31, 2018.
2
See Non-IFRS Financial Measures section starting on page 15.
n/m
= Not meaningful
-
Nutrien’s first-quarter net earnings were up from the loss in the
first quarter of 2018, supported by higher global nutrient prices,
strong operational results and the continued benefit of synergy
realization. Partially offsetting this was lower overall sales volumes
of nutrients and lower Retail earnings related to the extremely wet
weather in the US and dry conditions in Australia.
Segment Results
In the first quarter of 2019, our Executive Leadership Team reassessed
our product groupings and decided to evaluate the performance of
ammonium sulfate as part of the Nitrogen segment, rather than the
Phosphate and Sulfate segment as reported in 2018. Effective January 1,
2019, we have four reportable operating segments: Retail, Potash,
Nitrogen and Phosphate. Comparative amounts presented on a segmented
basis have been restated accordingly. We also renamed our “Others”
segment to “Corporate and Others”.
Detailed descriptions of our operating segments can be found in our 2018
Annual Report on pages 32-35 (Retail), 39-41 (Potash), 45-47 (Nitrogen)
and 51-53 (Phosphate).
Our discussion of segment results set out on the following pages is a
comparison of our first quarter 2019 results to our first quarter 2018
results unless otherwise noted.
Retail
Three months ended March 31 | |||||||||||||||||||||||||||||
Dollars (millions) | Gross Margin Dollars (millions) | Gross Margin (%) | |||||||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | 2019 | 2018 | ||||||||||||||||||||||
Sales | |||||||||||||||||||||||||||||
Crop nutrients 1 | $ | 687 | $ | 684 | – | $ | 131 | $ | 123 | 7 | 19 | 18 | |||||||||||||||||
Crop protection products | 744 | 774 | (4 | ) | 117 | 128 | (9 | ) | 16 | 17 | |||||||||||||||||||
Seed | 356 | 341 | 4 | 50 | 44 | 14 | 14 | 13 | |||||||||||||||||||||
Merchandise 2 | 108 | 120 | (10 | ) | 19 | 23 | (17 | ) | 18 | 19 | |||||||||||||||||||
Services and other | 144 | 151 | (5 | ) | 92 | 90 | 2 | 64 | 60 | ||||||||||||||||||||
2,039 | 2,070 | (1 | ) | $ | 409 | $ | 408 | – | 20 | 20 | |||||||||||||||||||
Cost of goods sold 2 | (1,630 | ) | (1,662 | ) | (2 | ) | |||||||||||||||||||||||
Gross margin | 409 | 408 | – | ||||||||||||||||||||||||||
Expenses 3 | (571 | ) | (541 | ) | 6 | ||||||||||||||||||||||||
Earnings before finance
costs and taxes (EBIT) |
(162 | ) | (133 | ) | 22 | ||||||||||||||||||||||||
Depreciation and amortization | 136 | 123 | 11 | ||||||||||||||||||||||||||
EBITDA | $ | (26 | ) | $ | (10 | ) | 160 |
1 Includes intersegment sales. See Note 2 to the interim financial
statements.
2 Certain immaterial figures have been
reclassified or grouped together for the three months ended March 31,
2018.
3 Includes selling expenses of $532 million (2018
– $523 million).
-
Retail EBITDA was lower as planting and applications were
delayed by extreme wet weather across the US and dryness in Australia.
Sales of crop protection, crop nutrients and associated application
services were most notably affected; however, higher crop nutrient
prices and margins helped partly offset the effects of the postponed
applications. Total gross margin percentage remained flat compared to
the same period last year. -
Crop nutrients sales were flat as higher sales prices were
offset by lower sales volumes. Gross margin increased primarily
because of higher selling prices. -
Crop protection products sales were lower as adverse US and
Australian weather impacted herbicide applications. Gross margin
percentage decreased due to a combination of higher competition
related to elevated inventories, and higher costs of raw materials
sourced from China. -
Seed sales and gross margin percentage increased slightly
compared to the same quarter in 2018 as US growers look to plant
higher corn acreage than soybeans in 2019. Proprietary seed gross
margins are up across all geographies resulting in favorable product
mix and improved overall gross margin. -
Merchandise sales declined as a result of lower equipment sales
in the Canadian operations to focus more on core Retail products. -
Services and other sales were down due to lower livestock
export shipments and wool commissions in Australia and the delayed
start to the spring application season across the US. The sales mix
change resulted in a higher gross margin percentage compared to the
same period in 2018.
Potash
Three months ended March 31 | ||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne | ||||||||||||||||||||||||||||||
2019 | 2018 |
%
Change |
2019 | 2018 |
%
Change |
2019 | 2018 |
%
Change |
||||||||||||||||||||||||
Manufactured product 1 | ||||||||||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||||
North America | $ | 245 | $ | 250 | (2 | ) | 976 | 1,254 | (22 | ) | $ | 250 | $ | 199 | 26 | |||||||||||||||||
Offshore | 451 | 324 | 39 | 1,944 | 1,871 | 4 | 232 | 173 | 34 | |||||||||||||||||||||||
696 | 574 | 21 | 2,920 | 3,125 | (7 | ) | 238 | 184 | 29 | |||||||||||||||||||||||
Cost of goods sold | (272 | ) | (279 | ) | (3 | ) | (93 | ) | (90 | ) | 3 | |||||||||||||||||||||
Gross margin | 424 | 295 | 44 | 145 | 94 | 54 | ||||||||||||||||||||||||||
Other 2 | 1 | – | – | Depreciation and amortization | 34 | 29 | 17 | |||||||||||||||||||||||||
Gross margin | 425 | 295 | 44 | Gross margin excluding | ||||||||||||||||||||||||||||
Expenses 3 | (64 | ) | (58 | ) | 10 | depreciation and amortization 4 | 179 | 123 | 46 | |||||||||||||||||||||||
EBIT | 361 | 237 | 52 | Cash cost of product | ||||||||||||||||||||||||||||
Depreciation and amortization | 100 | 91 | 10 | manufactured 4 | 58 | 61 | (5 | ) | ||||||||||||||||||||||||
EBITDA | $ | 461 | $ | 328 | 41 |
1 Includes intersegment sales. See Note 2 to the interim financial
statements.
2 Includes other potash and purchased
products and is comprised of net sales of $1 million (2018 – $1 million)
less cost of goods sold of $Nil (2018 – $1 million).
3
Includes provincial mining and other taxes of $63 million (2018 – $48
million).
4 See Non-IFRS Financial Measures section
starting on page 15.
-
EBITDA increased significantly due to a combination of higher
global potash prices and strong offshore sales volumes, partially
offset by lower domestic demand related to extremely wet weather in
the US which impacted fertilizer applications both this spring and
last fall. -
Sales volumes were down as strong demand in offshore markets
only partially offset weather-related lower sales volumes in the US.
Canpotex Limited (Canpotex) shipped record volumes in the first
quarter of 2019 and recently announced that it is fully committed
until June 2019. North American potash deliveries were slow due to the
late start to the spring season compounded by high retail inventories
as a result of the short fall application season. -
Net realized selling price increased due to strong global
demand and tight supply. -
Cost of goods sold per tonne was slightly higher due to higher
depreciation and amortization. Cash cost of product manufactured was
$58 per tonne in the first quarter, down 5 percent from the same
quarter in 2018.
Canpotex Sales by Market
Three months ended March 31 | ||||||||||
(percentage of sales volumes) | 2019 | 2018 | % Change | |||||||
Other Asian markets 1 | 33 | 29 | 14 | |||||||
China | 30 | 32 | (6 | ) | ||||||
Latin America | 19 | 21 | (10 | ) | ||||||
India | 10 | 6 | 67 | |||||||
Other markets | 8 | 12 | (33 | ) | ||||||
100 | 100 |
1 All Asian markets except China and India.
Nitrogen
Three months ended March 31 | ||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne | ||||||||||||||||||||||||||||||
2019 | 2018 1 |
%
Change |
2019 | 2018 1 |
%
Change |
2019 | 2018 1 |
% Change |
||||||||||||||||||||||||
Manufactured product 2 | ||||||||||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||||
Ammonia | $ | 162 | $ | 208 | (22 | ) | 644 | 744 | (13 | ) | $ | 252 | $ | 280 | (10 | ) | ||||||||||||||||
Urea | 213 | 212 | – | 647 | 724 | (11 | ) | 330 | 294 | 12 | ||||||||||||||||||||||
Solutions, nitrates and
sulfates |
171 | 155 | 10 | 948 | 907 | 5 | 180 | 170 | 6 | |||||||||||||||||||||||
546 | 575 | (5 | ) | 2,239 | 2,375 | (6 | ) | 244 | 242 | 1 | ||||||||||||||||||||||
Cost of goods sold | (398 | ) | (438 | ) | (9 | ) | (178 | ) | (184 | ) | (3 | ) | ||||||||||||||||||||
Gross margin | 148 | 137 | 8 | 66 | 58 | 14 | ||||||||||||||||||||||||||
Other 3 | 18 | 16 | 13 | Depreciation and amortization | 50 | 56 | (11 | ) | ||||||||||||||||||||||||
Gross margin | 166 | 153 | 8 | Gross margin excluding | ||||||||||||||||||||||||||||
Expenses | (5 | ) | (16 | ) | (69 | ) | depreciation and amortization | 116 | 114 | 2 | ||||||||||||||||||||||
EBIT | 161 | 137 | 18 | Urea controllable cash cost of | ||||||||||||||||||||||||||||
Depreciation and amortization | 113 | 134 | (16 | ) | product manufactured 4 | 74 | 69 | 7 | ||||||||||||||||||||||||
EBITDA | $ | 274 | $ | 271 | 1 |
1 Restated for the reclassification of sulfate from the Phosphate
segment. See page 4 of this document and Note 2 to the interim financial
statements.
2 Includes intersegment sales. See Note 2
to the interim financial statements.
3 Includes other
nitrogen (including ESN® and Rainbow) and purchased products and is
comprised of net sales of $131 million (2018 – $120 million) less cost
of goods sold of $113 million (2018 – $104 million).
4
See Non-IFRS Financial Measures section starting on page 15.
-
EBITDA increased slightly as a result of higher urea, UAN and
sulfate sales prices, primarily offset by lower nitrogen sales volumes
due to delayed applications in the US. -
Sales volumes for nitrogen decreased due to lower ammonia and
urea sales volumes, associated with wet weather in key US regions that
delayed nitrogen applications. -
Net realized selling price of nitrogen increased as higher
average prices for urea, UAN, and sulfates more than offset lower
prices for ammonia. Ammonia prices declined as a result of weak demand
for this product due to poor application conditions since the fourth
quarter of 2018, which provided support for alternative nitrogen
products such as urea. -
Cost of goods sold per tonne of nitrogen decreased overall due
to lower depreciation and amortization more than offsetting increased
costs from lower operating rates. As a result, urea controllable cash
cost of product manufactured increased by $5 per tonne.
Natural Gas Prices
Three months ended March 31 | ||||||||||
(Dollars per MMBtu) | 2019 | 2018 | % Change | |||||||
Overall gas cost excluding realized derivative impact | $ | 2.98 | $ | 2.73 | 9 | |||||
Realized derivative impact | 0.05 | 0.29 | (83 | ) | ||||||
Overall gas cost | $ | 3.03 | $ | 3.02 | – | |||||
Average NYMEX | $ | 3.15 | $ | 3.00 | 5 | |||||
Average AECO | 1.47 | 1.48 | (1 | ) |
-
Gas costs were similar to the same quarter in 2018 as lower
realized derivative losses offset higher gas prices in Trinidad and
the US.
Phosphate
Three months ended March 31 | ||||||||||||||||||||||||||||||||
Dollars (millions) | Tonnes (thousands) | Average per Tonne | ||||||||||||||||||||||||||||||
2019 | 2018 1 |
% Change |
2019 | 2018 1 |
%
Change |
2019 | 2018 1 |
%
Change |
||||||||||||||||||||||||
Manufactured product 2 | ||||||||||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||||
Fertilizer | $ | 208 | $ | 240 | (13 | ) | 491 | 605 | (19 | ) | $ | 423 | $ | 396 | 7 | |||||||||||||||||
Industrial and feed | 111 | 106 | 5 | 204 | 221 | (8 | ) | 545 | 481 | 13 | ||||||||||||||||||||||
319 | 346 | (8 | ) | 695 | 826 | (16 | ) | 459 | 419 | 10 | ||||||||||||||||||||||
Cost of goods sold | (304 | ) | (322 | ) | (6 | ) | (437 | ) | (390 | ) | 12 | |||||||||||||||||||||
Gross margin | 15 | 24 | (38 | ) | 22 | 29 | (24 | ) | ||||||||||||||||||||||||
Other 3 | (1 | ) | – | – | Depreciation and amortization | 86 | 56 | 54 | ||||||||||||||||||||||||
Gross margin | 14 | 24 | (42 | ) | Gross margin excluding | |||||||||||||||||||||||||||
Expenses | (6 | ) | (6 | ) | – | depreciation and amortization | 108 | 85 | 27 | |||||||||||||||||||||||
EBIT | 8 | 18 | (56 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization | 60 | 46 | 30 | |||||||||||||||||||||||||||||
EBITDA | $ | 68 | $ | 64 | 6 |
1 Restated for the reclassification of sulfate to the Nitrogen
segment. See page 4 of this document and Note 2 to the interim financial
statements.
2 Includes intersegment sales. See Note 2 to
the interim financial statements.
3 Includes other
phosphate and purchased products and is comprised of net sales of $30
million (2018 – $35 million) less cost of goods sold of $31 million
(2018 – $35 million)
-
EBITDA increased due to higher realized prices. This was
partially offset by the impact of higher cost of goods sold per tonne. -
Sales volumes decreased as wet weather in the US delayed the
application season and lower demand from India impacted export volumes. -
Net realized selling price increased for the majority of our
phosphate products, even though phosphate benchmark prices declined.
This is due to first quarter presold phosphate sales at higher
benchmark prices and the settlement of new industrial contracts. -
Cost of goods sold per tonne increased due to higher
depreciation and amortization in 2019 and because the first quarter of
2018 benefited from asset retirement obligation adjustments.
Expenses & Income Below Gross Margin
Three months ended March 31 | |||||||||
Dollars (millions), except percentage amounts | 2019 | 2018 | % Change | ||||||
Selling expenses 1 | $ | (538 | ) | $ | (532 | ) | 1 | ||
General and administrative expenses 2 | (95 | ) | (103 | ) | (8 | ) | |||
Provincial mining and other taxes 3 | (65 | ) | (48 | ) | 35 | ||||
Share-based compensation expenses | (57 | ) | (16 | ) | 256 | ||||
Other expenses | (44 | ) | (72 | ) | (39 | ) | |||
Finance costs | (123 | ) | (119 | ) | 3 | ||||
Income tax (expense) recovery | (12 | ) | 42 | n/m | |||||
Other comprehensive income (loss) | 32 | (70 | ) | n/m |
1 Expenses are primarily in the Retail segment. See page 4 for
analysis.
2 Includes expenses of $64 million (2018 – $68
million) in the Corporate and Others segment.
3 Expenses
are primarily in the Potash segment. See page 5 for analysis.
n/m
= not meaningful
-
Share-based compensation expenses increased due to improved
performance towards vesting conditions and a higher Nutrien share
price. -
Other expenses decreased primarily due to lower costs
associated with the merger of Potash Corporation of Saskatchewan Inc.
and Agrium Inc. (Merger) more than offsetting the $33 million
impairment of our intangible assets as a result of Fertilizantes
Heringer S.A. filing for bankruptcy protection in the first quarter of
2019. -
Income tax (expense) recovery changed as we had earnings before
income taxes for the three months ended March 31, 2019 compared to a
loss before income taxes for the same period in 2018. In addition,
discrete tax adjustments increased tax expense by $15 million for the
three months ended March 31, 2019 compared to a discrete tax recovery
of $3 million for the same period in 2018. As a result, an income tax
expense was realized for the three months ended March 31, 2019 as
compared to an income tax recovery for the same period last year. -
Other comprehensive income (loss) was impacted primarily by
unrealized gains in our investment in Sinofert Holdings Limited
(Sinofert) compared to unrealized losses in Sinofert and a realized
loss in Israel Chemicals Ltd. (ICL) in the comparative quarter, as
well as a gain on translation of our operations in Canada and
Australia compared to a loss on translation of those operations in the
same period in 2018 due to decreases in the value of the Canadian
dollar and Australian dollar relative to the US dollar.
Financial Condition Review
The following balance sheet categories contained variances that were
considered significant:
As at | ||||||||||||
Assets |
March 31,
2019 |
December 31,
2018 |
$
Variance |
% Change |
||||||||
Cash and cash equivalents | $ | 373 | $ | 2,314 | (1,941 | ) | (84 | ) | ||||
Inventories | 6,560 | 4,917 | 1,643 | 33 | ||||||||
Prepaid expenses and other current assets | 688 | 1,089 | (401 | ) | (37 | ) | ||||||
Property, plant and equipment | 19,834 | 18,796 | 1,038 | 6 | ||||||||
Goodwill | 11,817 | 11,431 | 386 | 3 | ||||||||
Liabilities and Equity | ||||||||||||
Short-term debt | $ | 1,652 | $ | 629 | 1,023 | 163 | ||||||
Current portion of long-term debt | 1,197 | 1,003 | 194 | 19 | ||||||||
Payables and accrued charges | 6,602 | 6,703 | (101 | ) | (2 | ) | ||||||
Long-term debt | 7,917 | 7,591 | 326 | 4 | ||||||||
Share capital | 16,316 | 16,740 | (424 | ) | (3 | ) | ||||||
Retained earnings | 7,405 | 7,745 | (340 | ) | (4 | ) |
Contacts
Investor and Media Relations:
Richard Downey
Vice
President, Investor & Corporate Relations
(403) 225-7357
Investors@nutrien.com
Investor Relations:
Jeff Holzman
Senior Director,
Investor Relations
(306) 933-8545
Todd Coakwell
Director, Investor Relations
(403) 225-7437
Contact us at: www.nutrien.com
Selected financial data for download can be found in our data tool at https://www.nutrien.com/interactive-datatool
Such
data is not incorporated by reference herein.