Agrium Says Wholesale Earnings May Fall on Lower Volumes

Agrium Inc. (AGU), North America’s third-largest fertilizer producer, said earnings are expected to fall in its wholesale unit this quarter because of lower sales volumes for the three major crop nutrients and weak prices.

Wholesale earnings before interest and taxes in the third quarter will be $200 million less than a year earlier, the Calgary-based company said today in a statement. Earnings for last year’s third quarter were $312 million. Wholesale fertilizer sales volumes are expected to be as much as 30 percent lower than a year earlier, the company said.

Prices for potash, a major fertilizer used to strengthen crops, have declined since OAO Uralkali, the world’s biggest producer, pulled out of a trading venture with Belarus in July and said it would sell its product at a lower price.

Last week, Potash Corp. of Saskatchewan Inc., Canada’s largest producer, said world potash markets were “paralyzed” in the wake of the Russian company’s withdrawal from the venture with state-run Belaruskali. Mosaic Co., the largest U.S.-based fertilizer producer, cut its quarterly potash forecast on Sept. 16 after saying crop-nutrient markets had “softened.”

Agrium fell 1.9 percent to C$90.66 at 9:39 a.m. in Toronto. The shares have declined 8.6 percent this year.

Agrium, which produces nitrogen, phosphate and potash fertilizers and also is the largest U.S. farm-products retailer, boosted its quarterly dividend by 50 percent to 75 cents a share and said it expects EBIT from its retail network to increase from a year earlier. Agrium had profit of $69 million from its retail arm in the third quarter of 2012.

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net

To contact the editor responsible for this story: Steven Frank at sfrank9@bloomberg.net

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