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Nutrien pares FY20 earnings outlook, potash guidance

North American agminerals leader Nutrien maintains it will post “solid” financial results for the first half of 2020 despite reporting a net loss of US$35 million for the March quarter. It has also cut its full-year earnings outlook and pared potash production guidance.
Nutrien pares FY20 earnings outlook, potash guidance Nutrien pares FY20 earnings outlook, potash guidance Nutrien pares FY20 earnings outlook, potash guidance Nutrien pares FY20 earnings outlook, potash guidance Nutrien pares FY20 earnings outlook, potash guidance

Nutrien has pared its full-year production guidance and earnings outlook on softer than expected potash demand and pricing

Slowed global economic activity in the March quarter resulted in demand for crude oil and related corn-based ethanol products retreating, which contributed to softer-than-expected potash pricing.

The Saskatchewan-based company reported an adjusted loss for the March quarter of US$69 million, or 12c per share. The net result compared with a $41 million net profit in the same period last year.

Nutrien reported March quatrer adjusted EBITDA of $508 million, compared with $704 million a year earlier, with free cash flow falling by more than half t $181 million from $382 million a year ago.

The company confirmed its quarterly dividend of 45c per share, saying the payout was in line with its target of returning 40-60% of annual free cash flow to shareholders.

Potash shipments had been lower than expected to date, prompting Nutrien to pare back its full-year global potash shipment forecast outlook by about one million tonnes to 65-67Mt.

It also lowered its full-year earnings guidance to $1.50-$2.10 per share compared with prior guidance of $1.90-$2.60. This remains in line with the market consensus forecast for $2 per share in 2020, with adjusted EBITDA expected at $3.5-$3.9 billion from prior guidance of $3.8-$4.3 billion.

Shares in the company were down slightly in pre-market trading Thursday at C$35.28, which capitalises it at $20.5 billion (US$14.5 billion).