Today, Nutrien reported its second-quarter 2024 results, including net earnings of $392 million ($0.78 diluted net earnings per share). The adjusted EBITDA for Q2 2024 was $2.2 billion, and the adjusted net earnings per share was $2.34.
“Nutrien benefited from improved Retail margins, higher fertilizer sales volumes, and lower operating costs in the first half of 2024. Crop input demand remains strong, and we have raised our full-year outlook for global potash demand due to healthy engagement in all key markets,” said Ken Seitz, Nutrien’s President and CEO.
“Our upstream production assets and downstream Retail businesses in North America and Australia have performed well in 2024. In Brazil, we continue to face challenges and are accelerating a margin improvement plan focused on reducing operating costs and optimizing cash flow,” added Seitz.
Highlights:
- Net earnings of $557 million and adjusted EBITDA of $3.3 billion were generated in the first half of 2024. Adjusted EBITDA was down from the same period in 2023 due to lower fertilizer net selling prices, partially offset by increased Nutrien Ag Solutions (“Retail”) earnings, higher Potash sales volumes, and lower natural gas costs.
- Retail adjusted EBITDA increased to $1.2 billion in the first half of 2024, supported by strong grower demand and a normalization of product margins in North America. However, full-year 2024 Retail adjusted EBITDA guidance was lowered due to ongoing market instability in Brazil and delayed planting in North America in the second quarter.
- Potash adjusted EBITDA declined to $1.0 billion in the first half of 2024 due to lower net selling prices, which offset higher sales volumes and lower operating costs. Full-year 2024 Potash sales volume guidance was raised due to record first-half sales volumes and expected strong global demand in the second half of 2024.
- Nitrogen adjusted EBITDA decreased to $1.1 billion in the first half of 2024 due to lower net selling prices, despite lower natural gas costs. Ammonia production increased in the first half, driven by improved reliability and less turnaround activity.
- A margin improvement plan is being accelerated in Brazil, including the curtailment of three fertilizer blenders and closure of 21 selling locations in Q2 2024. A $335 million non-cash impairment was recognized for Retail – Brazil assets due to ongoing market instability and more moderate margin expectations. Additionally, there was a loss on foreign currency derivatives of approximately $220 million in Brazil.
- Nutrien has decided not to pursue the Geismar Clean Ammonia project and recognized a $195 million non-cash impairment of related assets.
CFO Transition:
Nutrien also announced the appointment of Mark Thompson as Executive Vice President and Chief Financial Officer, effective August 26, 2024. Thompson will succeed Pedro Farah, who will remain with Nutrien in an advisory capacity until December 31, 2024.
“Mark’s impressive track record of execution and proven financial and strategic acumen will enable him to succeed in this position immediately. He brings in-depth knowledge of our business that will support the advancement of our strategic actions to enhance quality of earnings and cash flow,” said Seitz. “On behalf of the Nutrien team, I thank Pedro for his service and commitment over the last five years.”
“I’ve had the privilege to serve in leadership roles across the company and firmly believe in the opportunities afforded by Nutrien’s strong competitive advantages and world-class asset base to deliver long-term shareholder value,” said Thompson. “I look forward to partnering with Ken and our executive leadership team to drive a focused approach to capital allocation.”
Thompson has been with the company since 2011, currently serving as Executive Vice President and Chief Commercial Officer. He has held numerous executive and senior leadership roles, including Chief Strategy & Sustainability Officer, Chief Corporate Development & Strategy Officer, and Vice President of Business Development for Nutrien’s Retail business. He earned his Bachelor of Commerce (Finance) and Bachelor of Arts degrees from the University of Saskatchewan and holds the Chartered Financial Analyst (CFA) designation.
Management’s Discussion and Analysis:
The management’s discussion and analysis (“MD&A”) is dated August 7, 2024. The Board of Directors, through its Audit Committee, reviews and approves this disclosure. The term “Nutrien” refers to Nutrien Ltd. and its subsidiaries. Additional information, including our annual report dated February 22, 2024, can be found on SEDAR+ and EDGAR.
This MD&A should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements as of June 30, 2024, based on International Financial Reporting Standards (“IFRS”). It contains non-GAAP financial measures and forward-looking statements, described in the “Non-GAAP Financial Measures” and “Forward-Looking Statements” sections.
Market Outlook and Guidance:
- Agriculture and Retail Markets: Favorable growing conditions are expected to result in record US corn and soybean yields, pressuring crop prices. Despite lower crop prices, North American crop input demand is expected to remain strong. Brazilian crop prices and prospective grower margins have improved, with fertilizer demand projected to be approximately 46 million tonnes in 2024.
- Crop Nutrient Markets: Global potash demand in the first half of 2024 was supported by favorable consumption trends and low channel inventories. The settlement of contracts with China and India is expected to support demand. Global nitrogen markets are supported by steady demand and supply challenges. Phosphate fertilizer prices are supported by tight global supply and seasonal demand.
Financial and Operational Guidance:
- Retail adjusted EBITDA guidance was lowered to $1.5 to $1.7 billion due to ongoing market instability in Brazil and delayed planting in North America.
- Potash sales volume guidance was increased to 13.2 to 13.8 million tonnes due to higher global demand.
- Nitrogen sales volume guidance was narrowed to 10.7 to 11.1 million tonnes.
- Phosphate sales volume guidance was lowered to 2.5 to 2.6 million tonnes due to extended turnaround activity and delayed mine equipment moves.
- Finance costs guidance was lowered to $0.7 to $0.8 million due to a lower expected average short-term debt balance.
