Fertilizer company Agrium Inc warned that a big backlog of grain shipments on Canada’s railways and a late start to spring planting will hit its first-quarter earnings hard.
Calgary, Alberta-based Agrium estimated per-share earnings for the quarter ended March 31 at just above break even, well below the average analyst estimate of 53 cents a share, according to Thomson Reuters I/B/E/S.
In the year-before quarter, Agrium earned $141 million, or 94 cents a share.
The company’s shares fell 2.9 percent to C$104.44 in early trading on the Toronto Stock Exchange.
Agrium had said in January that rail shipment “challenges” were weighing on potash sales volumes.
A tough winter and a record-breaking Canadian harvest have overwhelmed the country’s two dominant railroads, Canadian National Railway Co and Canadian Pacific Ltd, creating a backlog of grain shipments that may not clear until next year.
Agrium also said its Carseland, Alberta, nitrogen facility experienced a failure in its auxiliary boiler on March 22, resulting in an unplanned shutdown. The boiler is expected to be fixed by the second half of May.
The shutdown is likely to cut the availability of urea by about 100,000 tonnes and that of ammonia by about 20,000 tonnes in the second quarter.
In February Agrium reported a 72 percent decline in fourth-quarter profit as grain prices dropped from a year earlier, taking fertilizer prices down with them. (Reuters)