Shares in potash groups rose after Mosaic, one of North America’s biggest producers of the fertilizer, unveiled a, rare, upgrade to its profits hopes, saying the buyers had returned “in force”.
The US-based fertilizer giant said it had raised its guidance for earnings in the October-to-December quarter to $0.83-0.88 a share excluding one-off factors.
Besides representing a more-than-doubling in the underlying $0.36-a-share result from the same period of 2014, the upgraded guidance is above the $0.58 a share that Wall Street had been expecting.
Potash shares traded firmer on Tuesday, with shares in Germany’s K+S up 2.3% at E25.40 in afternoon deals in Frankfurt, outperforming a 0.2% rise in the Dax index, while in Toronto shares in PotashCorp gained 3.9% to Can$43.33 in early deals. Stock in Mosaic itself opened up 2.8% at $47.27 in New York.
‘Customers came in force’
Mosaic said its upgrade reflected demand for potash and phosphates which had “exceeded our expectations” during the latest quarter, boosted by sales to fertilizer retailers, which had run down their stocks.
“Customers came to the market in force, as they sought to position inventory in anticipation of a strong spring season and increasing crop nutrient prices,” said Jim Prokopanko, the Mosaic chief executive.
The group sold 3.3m tonnes of phosphates, ahead of previous guidance of volumes of 2.5m-2.8m tonnes, albeit below the 3.4m tonnes in the October-to-December quarter of 2013.
While Mosaic, which reported results on February 11, did not release a figure for potash sales, it said that its business “produced at a high operating rate”.
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