An old article!
I just found this article dating from 2008 showing us that we are on the right track!
Growing global food need helps potash miners more easily weather financial crisis
Despite uncertain global economic conditions, the growing global food need has shown no signs of slowing, generating record profits for Potash Corporation of Saskatchewan.
While potash miners are not immune to the global crisis, PotashCorp President and CEO Bill Doyle declared the company believes "we are uniquely sheltered by the immutable long-term need for higher global food production and the key role that potash plays in helping to meet this demand."
Saskatoon-based PotashCorp anticipates that demand growth will meet or exceed the availability of new mineral supply.
"We continue to move forward on announced potash debottlenecking and expansion projects that will raise our operating capability from approximately 10 million tonnes to 18 million tonnes over this time frame," the company noted in its quarterly results report issued Thursday.
‘Despite the recent onset of a global downturn, the need for food is not abating," Doyle said. "That enabled us to utilize our unique strengths in each nutrient to achieve the best quarterly performance in our history, producing record cash flow and gross margin while also preparing our company for expected growth in potash demand."
For instance, potash producer inventories were at historically low levels entering the third quarter. Meanwhile, ongoing strikes at three PotashCorp facilities limited available supplies. Potash production for all producers was reduced due to seasonal maintenance during the quarter.
"Extremely tight supply/demand fundamentals made fulfilling volume commitments to North American and offshore customers a challenge and led to significantly higher prices and gross margin," said PotashCorp. Year-to-date potash gross margin of $2.3 billion was 252% higher than the $655.9 million generated in the first nine months of 2007.
The average realized price for offshore sales of potash reached $601 per tonne in the third quarter, a 262% increase from the third quarter of 2007.
PotashCorp's nitrogen operations also hit a record $324.1 million in the third quarter, up 162% from a year ago. "High global energy prices and very tight world ammonia supplies mitigated the traditional seasonal weakening of nitrogen markets in the third quarter," according to the company.
Phosphate also achieved a record third-quarter gross margin of $507.2 million, almost four times the $129.9 million generated in last year's third quarter. Liquid fertilizer realized prices hit $1,238 per tonne, a 293% increase from last year's third quarter.
OUTLOOK
"While the rapid decline in investor confidence in global equity, debt and commodity markets has shifted political and public attention to issues of finance, it does not change the sound and solidly entrenched long-term fundamentals that underpin anticipated growth in the fertilizer industry," PotashCorp noted.
"Although all sectors, including agriculture, have been impacted by the response to the accelerating global financial crisis and increased selling of liquid assets to attain and hold cash, the most basic drivers of our business remain intact. The growing world needs to produce more food and, to do that, it requires more fertilizer."
FINANCIALS
For the first nine months of this year, PotashCorp reported $2.7 billion or US$8.45 per share in net income, compared to $726.8 million ($2.25.sh) for the first nine months of 2007.
For the third-quarter 2008, the company reported $1.24 billion or $3.93 per share in net earnings, a five-fold increase over the $243.1 million (75-cents/sh) earned during the same period of 2007.
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