PotashCorp profits increase in first quarter Lower costs and higher prices propelled Potash Corporation of Saskatchewan to a US$370-million profit in the first quarter of 2015.
A lower Canadian dollar contributed about 25 per cent to those lower costs, but the bulk of savings came from higher production and lower manpower costs, said PotashCorp president and CEO Jochen Tilk.
The first quarter profit was US$30 million more than the same time last year, or 8.8 per cent.
"Year over year we are up four cents (per share) and we have had some good movement of potash which is a good sign," said Tilk. However, he added the Saskatoonbased company experienced challenges in its nitrogen and phosphate business.
PotashCorp estimated second quarter profits will be in the 44 to 55 cents per share range.
"We adjust our full-year guidance largely on higher Saskatchewan potash taxes and first-quarter performance that trailed our initial expectations," Tilk said. "Looking ahead, we are encouraged by the strength in global potash demand and see momentum accelerating through the second quarter, especially in offshore markets."
In 2014, estimated worldwide production was 63 million tonnes. For 2015, it is projected to be around 60 million tonnes.
He said PotashCorp has set an operating capacity of 10.9 million tonnes for 2015 and expects to produce between 9.2 and 9.8 million tonnes.
The flooding last fall of Russian competitor Uralkali's Solikamsk-2 mine will result in a loss of about a million tonnes of potash, though the impact will be minimal, Tilk said.
"There are other producers who have stepped in, namely the Belarusians have had a very good production year. So the impact of the flooding of Solikamsk-2 hasn't been as great."
Tilk said while the company's 10-year, multibilliondollar expansion is virtually complete, there are other opportunities to pursue. "There are lots of opportunities - they may not be as big as these billion-dollar expansions in potash, but they have good returns and are good opportunities," he said.
"The other thing that is important is that we deliver on certain parts of those expansions. We certainly need to deliver on production rates at Rocanville and Picadilly (mines) so that we deliver those numbers. We know that the rate of returns will greatly depend on potash prices at the time and we can't really influence what they are. But the one thing we can (influence) is make sure from a cost perspective, from a production rate perspective, we meet those targets so that we provide every opportunity, prices notwithstanding, that we can deliver on the returns of these projects."
PotashCorp Sales for the three months ended March 31 were nearly $1.67 billion - compared with $1.68 billion last year.
© Copyright (c) The Regina Leader-Post