SASKATOON - Potash Corporation of Saskatchewan Inc. (TSX:POT) says its fourth quarter profit was down 69 per cent compared with the year-earlier results as sales of its primary products continued to be depressed by the weak global economy.
The Saskatoon-based fertilizer producer said its net income in the fourth quarter of 2009 fell to $243.6 million, down from $788 million in the comparable period of 2008.
On a per-share basis, the profit fell to 80 cents per diluted share, down from $2.56.
Sales revenue fell to about $1.1 billion in the fourth quarter of 2009 from nearly $1.9 billion in the comparable period of 2008.
The company sold 1.1 million tonnes of potash during the last three months of last year, down from 1.4 million tonnes in the fourth quarter of 2008.
Despite the reduced demand for potash, it remained the company's most profitable product - contributing about 74 per cent of the fourth-quarter earnings and 71 per cent of the full-year earnings, PotashCorp said.
For the full year, PotashCorp earned $987.8 million or $3.25 per share in 2009 - the third-highest profit in company history but less than one-third the record set in 2008.
In 2008, prices for potash and many other commodities hit record highs, helping PotashCorp to a profit of $3.5 billion or $11.01 share for the full year.
However, the demand and price for potash plunged amid the 2008-09 global economic slowdown.
“The fertilizer industry, like many other businesses, felt the impact of the global economic downturn in 2009,” PotashCorp president and CEO Bill Doyle said in a statement.
“While our earnings were well below our company's potential, we remain committed - as we have been for decades - to strategies that protect the long-term value of our assets. These include the continued expansion of our potash capacity and matching production to market demand.”
Shortly after the Saskatoon-based company announced its financial report, BHP Billiton Canada announced it has a deal to acquire Athabasca Potash Inc. (TSX:API) for $341 million, or the equivalent of $8.35 cash.
BHP Billiton Canada, a subsidiary of the world's biggest mining company, will have the right to match any superior proposal presented to Athabasca Potash.
PotashCorp shares dropped $8.23 to $108.33 in early trading on the Toronto Stock Exchange, a decline of about seven per cent from Wednesday's close.
