* Wholesale nitrogen, phosphate sales volumes also seen
* Says customer demand delayed across all three nutrients
* Shares fall 2.4 percent in New York
* Raises dividend by 50 percent
By Rod Nickel and Bhaswati Mukhopadhyay
Sept 23 Canadian fertilizer company Agrium Inc
warned that its potash volumes are expected to be about
30 percent lower than normal in the current quarter, but raised
its dividend 50 percent, saying that agriculture's longer-term
fundamentals are strong.
Potash prices have slipped since mid-summer, when the
biggest global producer Uralkali OAO quit its export
partnership with Belaruskali and said it would seek to maximize
Shares of potash producers have slid sharply since then,
although Agrium has lost only 4 percent, since it is more
dependent on nitrogen production. Agrium stock fell 2.3 percent
to $87.89 on the New York Stock Exchange in early trading
The company said wholesale nitrogen and phosphate sales
volumes are expected to be down 20 and 30 percent, respectively,
and customer demand has been delayed across all three
nutrients for the quarter ending in September.
Soft prices, combined with lower sales volumes, are expected
to hurt third-quarter wholesale results across all the three
nutrients, the company said.
Agrium said outages at its nitrogen plants reduced volumes
by about 100,000 tonnes in the quarter, impacting costs.
A further challenge for near-term sales is that a delayed
harvest may not leave farmers in the U.S. Midwest time before
winter to apply much fertilizer to fields, and may opt instead
to apply it in spring.
Agrium said on Monday wholesale earnings before interest and
taxes (EBIT) is expected to be about $200 million lower in the
third quarter than a year earlier.
Performance is better in Agrium's retail division, North
America's largest chain of outlets that sells chemicals,
fertilizer and seed to farmers. Agrium said retail EBIT this
quarter is expected to surpass earnings from a year earlier.
The company raised its dividend by 50 percent to $3.00 per
share on an annualized basis. The move raises Agrium's dividend
yield - a closely watched measurement of dividend as a
percentage of share price - to 3.3 percent based on its U.S.
price at Friday's close, taking it closer to rival Potash Corp's
4.3 percent dividend yield.
Belarusian Potash Company, which Uralkali quit, was one of
the world's two biggest potash trading companies, along with
North America's Canpotex Ltd, owned by Mosaic Co, Potash
Corp of Saskatchewan Inc and Agrium.
Mosaic last week cut its third-quarter outlook for the price
and sales volume of potash and phosphate, saying crop nutrient
markets had softened due to the breakup of BPC.