The high fertilizer prices are certainly not harming the fertilizer products. That is the picture that emerges from the figures (mainly aimed at shareholders) for the third quarter of 2021.
Most companies note the same trend in the notes to the quarterly figures. The volume of fertilizer sold in the past quarter is lower than in the third quarter of 2020. But the price has more than made up for that. To paint a picture of the effect of high fertilizer prices on manufacturers, we have selected the figures of four producers (two American and two European).
North America
Canadian Nutrien announced on Monday, November 1, that sales in the third quarter of 2021 amounted to $6.024 million, a growth of 43% compared to the same period a year earlier. Adjusted EBITDA (gross profit) in the past quarter was $1.565 million compared to $685 million in the third quarter of 2020. The company also revised its profit forecast for the full financial year upwards to $6,9 to $7,1 billion.
The American Mosaic saw revenue grow by 2021% in the third quarter of 44 compared to the same period last year to $3,4 billion. Gross profit grew by 143% compared to last year and gross margin increased from 14,9% in 2020 to 25,3% in 2021.
Europe
K+S has not yet published its quarterly figures, but did release a profit forecast last week. The company expects an EBITDA of €2021 million in the 630 financial year, without special transactions. That was previously €500 to €600 million. The free cash flow has been increased from €180 million negative to a cash flow in balance (€0).
Yara is a bit out of place in the list. The company reported negative net income of $143 million in the third quarter. A year earlier, the result was still $340 million positive. But these figures give a distorted picture due to an incidental setback, a write-down of $355 million on the Salitre phosphate mining project and a currency translation loss of $148 million. Adjusted for exceptional items and currency effects, profit was $1,33 per share last quarter, compared to $0,88 per share in the third quarter of 2020.
Tightness continues
In the cautious outlook (this concerns listed companies) for the coming months, various manufacturers, not just the above-mentioned companies, are quite unanimous. The tightness on the market will most likely continue into the last quarter of 2021 and is expected to continue into early 2022.
The demand for fertilizer is good, partly due to high grain prices. Farmers in different regions make more use of pre-sales than usual. Energy and transport have become considerably more expensive. These are factors that have significantly contributed to the sharp increase in fertilizer prices in recent weeks and months. This does not appear to be changing in the short term.