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Nutrien Profit Plunges on Soaring Sulfur Costs
5 Nov
Summary
- Nutrien's third-quarter profit missed expectations due to high sulfur input costs.
- The company will optimize Aurora operations and close the White Springs facility.
- Phosphate adjusted EBITDA plunged 93% due to significant sulfur inflation.
Nutrien, a prominent Canadian fertilizer producer, reported that its third-quarter profit fell short of Wall Street's projections. This downturn was primarily attributed to a substantial rise in sulfur input costs within its phosphate operations and a decrease in nitrogen sales volumes.
The company revealed a strategic decision to optimize its core Aurora operations. Additionally, Nutrien announced the closure of its higher-cost White Springs facility in Florida, scheduled for the second quarter of 2027, as the mine's reserves are nearing depletion.
Nutrien anticipates recording impairment charges in the fourth quarter. These charges will affect the carrying value of its White Springs operations, estimated at $430 million, and its idled Trinidad nitrogen operations, valued at $760 million.
Analysts noted that Nutrien's results reflect weak North American fertilizer demand coupled with higher prices and increased costs in nitrogen and phosphate. However, management's focus on enhancing free cash flow generation was seen positively, evidenced by the closure of a costly phosphate operation and more efficient capital investments.
