• Adjusted EBITDA: $4.3 billion for the first nine months of 2024.
• Retail Adjusted EBITDA: $1.4 billion, up 10% from the prior year.
• North American Crop Nutrient Margins: Increased by $17 per ton compared to 2023.
• Crop Protection Inventory: Down 13% compared to the prior year.
• Potash Adjusted EBITDA: $1.6 billion for the first nine months, down from the prior year.
• Potash Production Cost: Controllable cash cost reduced to $52 per tonne.
• Nitrogen Adjusted EBITDA: $1.4 billion for the first nine months, down from the prior year.
• Phosphate Fertilizer Prices: Higher net selling prices in the third quarter compared to the prior year.
• Full Year Potash Sales Volume Guidance: 13.5 million to 13.9 million tonnes.
• Full Year Nitrogen Sales Volume Guidance: 10.6 million to 10.8 million tonnes.
• Full Year Retail Adjusted EBITDA Guidance: $1.5 billion to $1.6 billion.
• Capital Expenditures for 2024: $2.2 billion to $2.3 billion.
• Dividend Per Share Increase: 35% since the beginning of 2018.
• Share Repurchases: 1.5 million shares for approximately $75 million since late September.

• Warning! GuruFocus has detected 4 Warning Signs with NTR.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nutrien Ltd (NYSE:NTR) accelerated its timeline for achieving $200 million in operational efficiency and cost savings, now expected by 2025, a year earlier than initially planned.
• The company increased upstream sales volumes by 1.3 million tonnes in the first nine months of 2024, progressing towards its 2026 target of 2 to 3 million tonnes increase.
• Nutrien Ltd (NYSE:NTR) generated adjusted EBITDA of $4.3 billion in the first nine months of 2024, supported by increased downstream retail earnings and higher upstream fertilizer volumes.
• The company reported record potash volumes and raised its annual potash sales volume guidance to 13.5 million to 13.9 million tonnes.
• Nutrien Ltd (NYSE:NTR) plans to optimize capital expenditures in 2025 to a range of $2 billion to $2.1 billion, strengthening free cash flow and positioning the company for strategic growth investments.

Negative Points

• Nutrien Ltd (NYSE:NTR) faced headwinds in its downstream retail business due to a prolonged recovery in Brazil and softening commodity prices in North America.
• The company experienced lower North American crop nutrient sales volumes, impacted by wet weather, lower corn acres, and reduced field activity in the third quarter.
• Adjusted EBITDA for the nitrogen segment was down from the prior year, as lower nitrogen prices offset the benefits of reduced natural gas costs.
• Weather-related events impacted phosphate operating rates, resulting in lower sales volumes and incremental costs.
• The company revised its annual nitrogen sales volume guidance due to extended turnarounds and unplanned outages, including weather-related events.

Q & A Highlights

Q: Can you provide an update on your buyback program and how you view buybacks versus growth spending? A: Kenneth Seitz, President and CEO, explained that Nutrien is continuing with stock buybacks and is optimizing capital allocation to improve free cash flow per share. Mark Thompson, CFO, added that the company has repurchased $75 million worth of stock since September and plans to continue at a similar rate, seeing compelling value in buybacks to grow free cash flow per share.

Q: What is your confidence level in potash demand growth for next year, given the current market conditions? A: Kenneth Seitz expressed confidence in potash demand growth, citing global inventories at average or below average levels and strong demand in markets like Brazil and China. Christopher Reynolds, EVP & Chief Commercial Officer, added that they are not seeing concerning inventory builds and expect good consumption levels to continue into 2025.

Q: How do you view the nitrogen supply dynamics over the next few years? A: Kenneth Seitz noted that speculative new plant builds are unlikely without bankable contracts, and the timing of the energy transition is still unclear. Christopher Reynolds added that global demand trends are steady, and North America's low-cost gas position is advantageous, with potential supply constraints in Europe due to natural gas prices.

Q: Can you discuss the operational capability to meet growing potash demand and your production targets? A: Kenneth Seitz confirmed Nutrien's ability to meet growing demand, with plans to produce 15 million tonnes by hiring more people and optimizing operations. He emphasized that current capacity is built to meet global customer needs and that they can expand volumes as needed.

Q: How are geopolitical issues impacting fertilizer shipments, and what is the update on Red Sea shipment processes? A: Kenneth Seitz stated that while geopolitical events have impacted trade flows, most volumes are reaching markets, except for some challenges in Belarus. He noted that alternative routes have been found for Red Sea shipments, and trade flows are relatively balanced, though costs have increased.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.