The cutting face of a potash borer is shown in a deep shaft at the Rocanville potash mine, owed by the PotashCorp of Saskatchewan, in Rocanville, Sask. CP file photo by Troy Fleece
SASKATOON — Potash Corp. of Saskatchewan (TSX:POT) says its second-quarter results benefited from stronger fertilizer demand, and the company is raising its outlook for the rest of the year.
The world's biggest producer of the crop nutrient said profits jumped to $840 million from $480 million a year ago helped by rising prices for potash driven by higher demand.
Earnings per share climbed to a record for the quarter of 96 cents from 53 cents a year earlier.
Sales rose to $2.33 billion from $1.44 billion.
Higher fertilizer prices doubled gross margins to $1.2 billion.
“The continuation of strong fertilizer demand combined with the limitations of global production, especially in potash, resulted in tight fertilizer markets and rising prices for our products,” said president and CEO Bill Doyle in a release.
“With farmers committed to increasing yields and capitalizing on the unprecedented economic opportunity, we worked to keep pace with growing demand, which resulted in a record quarter for our company.”
Potash Corp. said it was also raising its outlook for third quarter earnings to between 80 cents and $1 per share. Full-year earnings is estimated at $3.40 to $3.80 per share, the company said.
Last summer, Potash became the target of a nearly US$40-billion hostile takeover offer by Anglo-Australian mining giant BHP Billiton. However, company management staunchly rejected the BHP bid as too low, with Doyle saying at the time that the fertilizer market was set to grow by leaps and bounds.
The deal was eventually blocked by Ottawa as not of net benefit to Canada.