(Reuters) - Nutrien Ltd, the world’s largest crop nutrient provider, missed profit estimates for the second straight quarter on Thursday, as flooding across the United States and drought in Australia disrupted the agriculture supply chain.
Agricultural companies like Nutrien, which sells fertilizers and seeds directly to farmers, have already been hammered by trade uncertainty that pushed down crop prices. In addition, an extremely wet spring and flooding in parts of the United States led to a late start to the planting season in North America.
Trade disruptions continue to hit North American growers, as U.S. soybean exports to China were down 55 percent year-over-year, while China also placed import restrictions on two of Canada’s largest canola exporters, the company said.
Nutrien, which produces and distributes 27 million tonnes of potash, nitrogen and phosphate products worldwide, has been focusing on growing its retail base through small acquisitions.
In March, Norwest Equity Partners completed the sale of Actagro, marketer of environmentally sustainable soil and plant health products to Nutrien. Nutrien also acquired Van Horn a U.S.-based retailer and agricultural services provider.
But the world’s largest producer of potash by capacity said volumes were down as strong demand in offshore markets only partially offset lower, weather-related U.S. sales volumes. Core earnings from potash increased 41 percent to $461 million buoyed by higher prices, even as total potash sales volume in the quarter fell 7 percent to 2.9 million tonnes. As a result, crop nutrients sales remained flat.
Total sales rose nearly 1 percent to $3.69 billion in the quarter, affected by the second wettest six-month period in the United States in 125 years, the company said.
“While some regions are still receiving excess moisture, planting is underway and we expect strong crop input demand in the second quarter,” Chief Executive Chuck Magro said in a statement.
The Saskatoon, Saskatchewan-based company, formed by the merger of Agrium Inc and Potash Corp of Saskatchewan in early 2018, reported net income from continuing operations of $41 million in the first quarter ended March 31, versus a loss of $1 million a year ago.
On an adjusted basis, the company earned 20 cents per share, below analysts’ estimate of 26 cents per share, according to Refinitiv IBES data.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Anil D'Silva and Peter Cooney