Sign In  |  Register  |  About Santa Clara  |  Contact Us

Santa Clara, CA
September 01, 2020 1:39pm
7-Day Forecast | Traffic
  • Search Hotels in Santa Clara

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Nutrien Reports First Quarter 2024 Results

  • First quarter results supported by strong grower demand for crop inputs, increased potash shipments to key global markets, higher fertilizer operating rates and lower costs.
  • Maintaining full-year 2024 Retail adjusted EBITDA and fertilizer sales volume guidance ranges.

All amounts are in US dollars except as otherwise noted

Nutrien Ltd. (TSX and NYSE: NTR) announced today its first quarter 2024 results, with net earnings of $165 million ($0.32 diluted net earnings per share). First quarter 2024 adjusted EBITDA1 was $1.1 billion and adjusted net earnings per share1 was $0.46.

“We continued to see strong crop input demand, a normalization of product margins for our North American Retail business and increased global potash shipments in the first quarter. Our results highlighted the capabilities of our flexible, low-cost production assets and downstream distribution network to efficiently supply our customers’ needs,” commented Ken Seitz, Nutrien’s President and CEO.

“We expect growth in Retail earnings and fertilizer sales volumes compared to the prior year and have maintained our 2024 guidance ranges. Our focus remains on strengthening our capability to serve growers and enhancing our core businesses to improve the quality of our earnings and free cash flow,” added Mr. Seitz.

Highlights2:

  • Generated net earnings of $165 million and adjusted EBITDA of $1.1 billion in the first quarter of 2024, down from the same period in 2023 primarily due to lower net fertilizer selling prices. This was partially offset by increased Retail earnings, higher fertilizer sales volumes and lower natural gas costs.
  • Nutrien Ag Solutions (“Retail”) adjusted EBITDA increased to $77 million in the first quarter of 2024 primarily due to higher gross margin for crop nutrients and crop protection products supported by strong grower demand and a normalization of product margins in North America.
  • Potash adjusted EBITDA declined to $530 million in the first quarter of 2024 due to lower net selling prices, which more than offset higher sales volumes. We increased potash production, supported by continued advancement of mine automation initiatives, and reduced our controllable cash cost of product manufactured per tonne.
  • Nitrogen adjusted EBITDA declined to $464 million in the first quarter of 2024 due to lower net selling prices for all major nitrogen products, which more than offset higher sales volumes and lower natural gas costs. Ammonia production increased in the first quarter, driven by higher utilization rates in Trinidad.
  • Initiated a process to divest our Retail assets in Argentina, Chile, and Uruguay to provide greater focus on our core Retail businesses and enhance the quality of earnings and free cash flow.

  1. This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.
  2. Our discussion of highlights set out on this page is a comparison of the results for the three months ended March 31, 2024 to the results for the three months ended March 31, 2023, unless otherwise noted.

Management’s Discussion and Analysis

The following management’s discussion and analysis (“MD&A”) is the responsibility of management and is dated as of May 8, 2024. The Board of Directors (“Board”) of Nutrien carries out its responsibility for review of this disclosure principally through its Audit Committee, composed entirely of independent directors. The Audit Committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term “Nutrien” refers to Nutrien Ltd. and the terms “we”, “us”, “our”, “Nutrien” and “the Company” refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our annual report dated February 22, 2024 (“2023 Annual Report”), which includes our annual audited consolidated financial statements and MD&A, and our annual information form dated February 22, 2024, each for the year ended December 31, 2023, can be found on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. No update is provided to the disclosure in our 2023 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the “SEC”).

This MD&A is based on and should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements as at and for the three months ended March 31, 2024 (“interim financial statements”) based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”, unless otherwise noted. This MD&A contains certain non-GAAP financial measures and ratios and forward-looking statements, which are described in the “Non-GAAP Financial Measures” and the “Forward-Looking Statements” sections, respectively.

Market Outlook and Guidance

Agriculture and Retail Markets

  • We expect US corn plantings of approximately 90 million acres in 2024 and soybean plantings of approximately 87 million acres. US planting progress is in line with historical average levels and fertilizer application rates have been strong. Wet weather has recently delayed planting progress and fertilizer application in the Corn Belt.
  • Brazilian growers are finalizing their soybean harvest, and favorable weather conditions resulted in safrinha corn planted area exceeding initial expectations. Soybean margins are expected to improve from the compressed levels in 2023 and support growth in planted acreage and crop input demand in the second half of 2024.
  • Australian soil moisture conditions vary regionally but remain supportive for this upcoming growing season and the Indian monsoon is projected to produce average to above-average precipitation, supporting yield potential and grower demand for crop inputs.

Crop Nutrient Markets

  • Global potash supply and demand has been relatively balanced as increased shipments have been required to meet historically strong demand in the first quarter. We have maintained our 2024 full-year potash shipment forecast of 68 to 71 million tonnes.
  • We are seeing strong potash demand in North America for the spring application season as channel inventories were tight to start 2024. Potash demand in Southeast Asia has been supported by lower inventory levels compared to the prior year and favorable economics for key crops such as oil palm and rice. China’s potash imports remained strong in the first quarter of 2024 supported by a step-change in domestic consumption but are expected to decline on a full-year basis compared to the record levels in 2023.
  • Global nitrogen markets have fluctuated in 2024 driven by seasonal buying patterns, production outages and uncertainty over Chinese urea export restrictions and India’s urea import requirements. The US nitrogen supply and demand balance remains relatively tight, in particular for ammonia and UAN, with net nitrogen imports down 21 percent on a fertilizer year basis compared to the historical average.
  • Phosphate fertilizer prices remained firm through the first quarter of 2024 due to strong demand in the Northern Hemisphere, supportive Indian DAP purchases, Chinese export restrictions and production outages. Prices have softened in the second quarter driven primarily by lower seasonal demand.

Financial and Operational Guidance

  • We are maintaining our Retail adjusted EBITDA and fertilizer sales volume guidance ranges as market fundamentals and operational performance have been in line with our previous expectations.
  • Retail adjusted EBITDA guidance of $1.65 to $1.85 billion reflects expectations for increased crop nutrient sales volumes and margins for our North American business in the first half of 2024 and improved crop input margins in Brazil during the second half of the year. Guidance assumes a full year of earnings from our Retail assets in Argentina, Chile and Uruguay.
  • Potash sales volumes guidance of 13.0 to 13.8 million tonnes assumes a more even split between first and second half volumes compared to the prior year. Nitrogen sales volumes guidance of 10.6 to 11.2 million tonnes assumes higher operating rates at our North American and Trinidad plants and growth in sales of upgraded products such as urea and nitrogen solutions.
  • Effective tax rate on adjusted earnings guidance was lowered primarily due to a change to our expected geographic mix of earnings.

All guidance numbers, including those noted above are outlined in the table below. Refer to page 65 of Nutrien’s 2023 Annual Report for related assumptions and sensitivities.

 

2024 Guidance Ranges 1 as of

 

May 8, 2024

 

February 21, 2024

(billions of US dollars, except as otherwise noted)

Low

 

High

 

Low

 

High

Retail adjusted EBITDA

1.65

 

1.85

 

1.65

 

1.85

Potash sales volumes (million tonnes) 2

13.0

 

13.8

 

13.0

 

13.8

Nitrogen sales volumes (million tonnes) 2

10.6

 

11.2

 

10.6

 

11.2

Phosphate sales volumes (million tonnes) 2

2.6

 

2.8

 

2.6

 

2.8

Depreciation and amortization

2.2

 

2.3

 

2.2

 

2.3

Finance costs

0.75

 

0.85

 

0.75

 

0.85

Effective tax rate on adjusted earnings (%)

23.0

 

25.0

 

24.0

 

26.0

Capital expenditures 3

2.2

 

2.3

 

2.2

 

2.3

1 See the “Forward-Looking Statements” section.

2 Manufactured product only.

3 Comprised of sustaining capital expenditures, investing capital expenditures and mine development and pre-stripping capital expenditures which are supplementary financial measures. See the “Other Financial Measures” section.

Consolidated Results

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

% Change

Sales

5,389

 

6,107

 

(12)

Gross margin

1,537

 

1,913

 

(20)

Expenses

1,118

 

974

 

15

Net earnings

165

 

576

 

(71)

Adjusted EBITDA 1

1,055

 

1,421

 

(26)

Diluted net earnings per share

0.32

 

1.14

 

(72)

Adjusted net earnings per share 1

0.46

 

1.11

 

(59)

1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

Net earnings and adjusted EBITDA decreased in the first quarter of 2024 compared to the same period in 2023, primarily due to lower net fertilizer selling prices. This was partially offset by increased Retail earnings, higher fertilizer sales volumes and lower natural gas costs. Expenses increased mainly due to higher foreign exchange losses primarily from our Retail – South America region in the first quarter of 2024 and an $80 million gain recognized in the first quarter of 2023 due to post-retirement benefit plan amendments.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three months ended March 31, 2024 to the results for the three months ended March 31, 2023, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

% Change

Sales

3,308

 

3,422

 

(3)

Cost of goods sold

2,561

 

2,807

 

(9)

Gross margin

747

 

615

 

21

Adjusted EBITDA 1

77

 

(34)

 

n/m

1 See Note 2 to the interim financial statements.

  • Retail adjusted EBITDA increased in the first quarter of 2024 primarily due to higher gross margin for crop nutrients and crop protection products supported by strong grower demand and a normalization of product margins in North America. Gross margin of our proprietary products increased in the first quarter driven primarily by our crop nutritional and biostimulant product lines, as we continued to expand our differentiated product offering and manufacturing capacity.

 

Three Months Ended March 31

 

Sales

 

Gross Margin

(millions of US dollars)

2024

 

2023

 

2024

 

2023

Crop nutrients

1,309

 

1,335

 

254

 

141

Crop protection products

1,114

 

1,154

 

234

 

208

Seed

485

 

507

 

59

 

72

Services and other

156

 

148

 

125

 

118

Merchandise

200

 

246

 

31

 

44

Nutrien Financial

66

 

57

 

66

 

57

Nutrien Financial elimination

(22)

 

(25)

 

(22)

 

(25)

Total

3,308

 

3,422

 

747

 

615

  • Crop nutrients sales decreased in the first quarter of 2024 due to lower selling prices, partially offset by higher sales volumes across all regions. Gross margin increased in the first quarter due to higher per-tonne margins and higher sales volumes resulting from a more typical start to spring applications in the US compared to 2023.
  • Crop protection products sales were lower in the first quarter of 2024 primarily due to lower selling prices. Gross margin increased compared to the first quarter of 2023, which was impacted by the sell through of higher cost inventory.
  • Seed sales and gross margin decreased in the first quarter of 2024 primarily due to lower sales volumes and competitive market prices in the US, as growers delayed crop selection decisions in some regions.
  • Nutrien Financial sales and gross margin increased in the first quarter of 2024 due to higher financing offering rates and expanded program participation from growers in the US and Australia.

Supplemental Data

Three Months Ended March 31

 

Gross Margin

 

% of Product Line 1

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

2024

 

2023

Proprietary products

 

 

 

 

 

 

 

Crop nutrients

70

 

54

 

28

 

38

Crop protection products

83

 

74

 

36

 

36

Seed

17

 

30

 

29

 

42

Merchandise

3

 

3

 

9

 

6

Total

173

 

161

 

23

 

26

1 Represents percentage of proprietary product margins over total product line gross margin.

 

Sales Volumes

(tonnes - thousands)

 

Gross Margin / Tonne

(US dollars)

 

2024

 

2023

 

2024

 

2023

Crop nutrients

 

 

 

 

 

 

 

North America

1,464

 

1,195

 

139

 

94

International

918

 

845

 

55

 

35

Total

2,382

 

2,040

 

106

 

69

(percentages)

March 31, 2024

December 31, 2023

Financial performance measures 1, 2

 

 

Cash operating coverage ratio

66

68

Adjusted average working capital to sales

19

19

Adjusted average working capital to sales excluding Nutrien Financial

nil

1

Nutrien Financial adjusted net interest margin

5.2

5.2

1 Rolling four quarters.

2 These are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section.

Potash

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

% Change

Net sales

813

 

1,002

(19)

Cost of goods sold

358

 

305

17

Gross margin

455

 

697

(35)

Adjusted EBITDA 1

530

 

676

(22)

1 See Note 2 to the interim financial statements.

  • Potash adjusted EBITDA declined in the first quarter of 2024 due to lower net selling prices, which more than offset higher sales volumes. We increased potash production in the first quarter, supported by continued advancement of mine automation initiatives, which helped to meet customer demand and reduced our controllable cash cost of product manufactured1 to $56 per tonne.

Manufactured product

Three Months Ended

March 31

($ / tonne, except as otherwise noted)

2024

 

2023

Sales volumes (tonnes - thousands)

 

 

 

North America

1,307

 

854

Offshore

2,106

 

1,782

Total sales volumes

3,413

 

2,636

Net selling price

 

 

 

North America

310

 

401

Offshore

193

 

370

Average selling price

238

 

380

Cost of goods sold

105

 

115

Gross margin

133

 

265

Depreciation and amortization

43

 

37

Gross margin excluding depreciation and amortization 1

176

 

302

1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

  • Sales volumes increased in North America in the first quarter of 2024 due to low channel inventory and more normal buying behaviors compared to the same period in 2023. Offshore sales volumes were higher compared to the same period in the prior year driven by increased demand in major offshore markets.
  • Net selling price per tonne decreased in the first quarter of 2024 due to a decline in benchmark prices compared to the strong prices in the first quarter of 2023.
  • Cost of goods sold per tonne decreased in the first quarter of 2024 mainly due to higher production volumes and lower royalties.

Supplemental Data

Three Months Ended

March 31

 

2024

 

2023

Production volumes (tonnes – thousands)

3,565

 

3,088

Potash controllable cash cost of product manufactured per tonne 1

56

 

62

Canpotex sales by market (percentage of sales volumes)

 

 

 

Latin America

32

 

35

Other Asian markets 2

33

 

38

China

20

 

12

India

3

 

2

Other markets

12

 

13

Total

100

 

100

1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

2 All Asian markets except China and India.

Nitrogen

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

% Change

Net sales

911

 

1,312

(31)

Cost of goods sold

604

 

771

(22)

Gross margin

307

 

541

(43)

Adjusted EBITDA 1

464

 

676

(31)

1 See Note 2 to the interim financial statements.

  • Nitrogen adjusted EBITDA declined in the first quarter of 2024 due to lower net selling prices for all major nitrogen products, which more than offset higher sales volumes and lower natural gas costs. Ammonia production increased in the first quarter supporting product mix optimization and increased downstream urea and UAN production.

Manufactured product

Three Months Ended

March 31

($ / tonne, except as otherwise noted)

2024

 

2023

Sales volumes (tonnes - thousands)

 

 

 

Ammonia

517

 

534

Urea and ESN®

775

 

747

Solutions, nitrates and sulfates

1,215

 

1,076

Total sales volumes

2,507

 

2,357

Net selling price

 

 

 

Ammonia

403

 

721

Urea and ESN®

432

 

617

Solutions, nitrates and sulfates

226

 

310

Average net selling price

326

 

500

Cost of goods sold

207

 

275

Gross margin

119

 

225

Depreciation and amortization

54

 

57

Gross margin excluding depreciation and amortization 1

173

 

282

1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

  • Sales volumes were higher in the first quarter of 2024 primarily due to higher urea and UAN production and strong fertilizer demand, partially offset by lower ammonia sales due to product mix optimization.
  • Net selling price per tonne was lower in the first quarter of 2024 for all major nitrogen products primarily due to weaker benchmark prices resulting from lower energy prices in key nitrogen producing regions.
  • Cost of goods sold per tonne decreased in the first quarter of 2024 mainly due to lower natural gas costs.

Supplemental Data

Three Months Ended

March 31

 

2024

 

2023

Sales volumes (tonnes – thousands)

 

 

 

Fertilizer

1,423

 

1,248

Industrial and feed

1,084

 

1,109

Production volumes (tonnes – thousands)

 

 

 

Ammonia production – total 1

1,452

 

1,431

Ammonia production – adjusted 1, 2

1,018

 

1,037

Ammonia operating rate (%) 2

92

 

95

Natural gas costs (US dollars per MMBtu)

 

 

 

Overall natural gas cost excluding realized derivative impact

3.16

 

4.85

Realized derivative impact 3

0.04

 

Overall natural gas cost

3.20

 

4.85

1 All figures are provided on a gross production basis in thousands of product tonnes.

2 Excludes Trinidad and Joffre.

3 Includes realized derivative impacts recorded as part of cost of goods sold or other income and expenses. Refer to Note 3 to the interim financial statements.

Phosphate

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

% Change

Net sales

437

 

514

(15)

Cost of goods sold

372

 

427

(13)

Gross margin

65

 

87

(25)

Adjusted EBITDA 1

121

 

137

(12)

1 See Note 2 to the interim financial statements.

  • Phosphate adjusted EBITDA decreased in the first quarter of 2024 primarily due to lower net selling prices, partially offset by higher sales volumes and lower ammonia and sulfur input costs. Production increased in the first quarter due to improved reliability at our Aurora plant.

Manufactured product

Three Months Ended

March 31

($ / tonne, except as otherwise noted)

2024

 

2023

Sales volumes (tonnes - thousands)

 

 

 

Fertilizer

447

 

388

Industrial and feed

173

 

160

Total sales volumes

620

 

548

Net selling price

 

 

 

Fertilizer

627

 

682

Industrial and feed

848

 

1,136

Average net selling price

689

 

814

Cost of goods sold

580

 

651

Gross margin

109

 

163

Depreciation and amortization

113

 

122

Gross margin excluding depreciation and amortization 1

222

 

285

1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

  • Sales volumes increased in the first quarter of 2024 due to higher production and strong demand across fertilizer, industrial and feed products.
  • Net selling price per tonne decreased in the first quarter of 2024 due to lower fertilizer benchmark prices and lower industrial and feed net selling prices which reflect the typical lag in price realizations relative to benchmark prices.
  • Cost of goods sold per tonne decreased in the first quarter of 2024 mainly due to lower ammonia and sulfur input costs.

Supplemental Data

Three Months Ended

March 31

 

2024

 

2023

Production volumes (P2O5 tonnes – thousands)

352

 

341

P2O5 operating rate (%)

83

 

81

Corporate and Others and Eliminations

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

% Change

Corporate and Others

 

 

 

 

 

Selling expenses (recovery)

(2)

 

(2)

 

General and administrative expenses

89

 

84

 

6

Share-based compensation expense

6

 

15

 

(60)

Other expenses (income)

97

 

(81)

 

n/m

Adjusted EBITDA 1

(101)

 

(13)

 

677

Eliminations

 

 

 

 

 

Gross margin

(37)

 

(27)

 

37

Adjusted EBITDA 1

(36)

 

(21)

 

71

1 See Note 2 to the interim financial statements.

  • Other expenses (income) was an expense in the first quarter of 2024 compared to income in the same period in 2023 due to higher foreign exchange losses primarily from our Retail – South America region in the first quarter of 2024 and an $80 million gain recognized in the first quarter of 2023 due to post-retirement benefit plan amendments.

Finance Costs, Income Taxes and Other Comprehensive (Loss) Income

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

% Change

Finance costs

179

 

170

 

5

Income tax expense

75

 

193

 

(61)

Actual effective tax rate including discrete items (%)

31

 

25

 

24

Other comprehensive (loss) income

(102)

 

2

 

n/m

  • Income tax expense was lower in the first quarter of 2024 primarily as a result of lower earnings compared to the same period in 2023. We did not record the tax benefit on South America losses in the first quarter of 2024 as the recognition criteria to record deferred tax assets was not met. This resulted in a higher effective tax rate for the first quarter of 2024.
  • Other comprehensive (loss) income was a loss in the first quarter of 2024 primarily driven by changes in the currency translation of our Retail foreign operations primarily due to depreciation of Australian and Canadian currencies relative to the US dollar.

Liquidity and Capital Resources

Sources and Uses of Liquidity

We continued to manage our capital in accordance with our capital allocation strategy. We believe that our internally generated cash flow, supplemented by available borrowings under new or existing financing sources, if necessary, will be sufficient to meet our anticipated capital expenditures, planned growth and development activities, and other cash requirements for the foreseeable future. Refer to the “Capital Structure and Management” section for details on our existing long-term debt and credit facilities.

Sources and Uses of Cash

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

 

% Change

Cash used in operating activities

(487)

 

(858)

 

(43)

Cash used in investing activities

(494)

 

(694)

 

(29)

Cash provided by financing activities

548

 

2,129

 

(74)

Cash used for dividends and share repurchases 1

(261)

 

(1,143)

 

(77)

1 This is a supplementary financial measure. See the “Other Financial Measures” section.

Cash used in

operating activities

  • Reduced cash outflow in the first quarter of 2024 compared to the same period in 2023 due to a decrease in income taxes paid and other working capital movements. Typically, in the first quarter of the year, we have lower cash payments to our suppliers and have lower cash receipts from our grower customers as our receivables build during the planting and application season. In the first quarter of 2023, we experienced global supply chain challenges and higher benchmark prices compared to the first quarter of 2024, resulting in higher than usual payments to our suppliers offsetting the higher receivables we collected from our customers.

Cash used in

investing activities

  • Lower in the first quarter of 2024 compared to the same period in 2023 due to lower capital expenditures and fewer business acquisitions.

Cash provided by

financing activities

  • Lower in the first quarter of 2024 compared to the same period in 2023 due to the issuance of $1,500 million of senior notes in the first quarter of 2023.
  • The proceeds from our short-term debt decreased by $947 million compared to the first quarter of 2023; however, we also did not repurchase any shares in the first quarter of 2024.

Cash used for

dividends and share

repurchases

  • Lower in the first quarter of 2024 compared to the same period in 2023 as we did not repurchase any shares in the first quarter of 2024, compared to $897 million of share repurchases in the first quarter of 2023.

Financial Condition Review

The following is a comparison of balance sheet categories that are considered material:

 

As at

 

 

 

 

(millions of US dollars, except as otherwise noted)

March 31, 2024

 

December 31, 2023

 

$ Change

 

% Change

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

496

 

941

 

(445)

 

(47)

Receivables

5,561

 

5,398

 

163

 

3

Inventories

8,188

 

6,336

 

1,852

 

29

Prepaid expenses and other current assets

905

 

1,495

 

(590)

 

(39)

Property, plant and equipment

22,410

 

22,461

 

(51)

 

Liabilities and Equity

 

 

 

 

 

 

 

Short-term debt

2,835

 

1,815

 

1,020

 

56

Payables and accrued charges

9,431

 

9,467

 

(36)

 

Retained earnings

11,423

 

11,531

 

(108)

 

(1)

  • Explanations for changes in Cash and cash equivalents are in the “Sources and Uses of Cash” section.
  • Receivables remained consistent as the increase in receivables due to the seasonality of our Retail sales was offset by faster collection of our Potash receivables.
  • Inventories increased due to the seasonality of our Retail segment and the larger portion of its operations in North America. Our inventory levels build up in the last quarter of the year and peaks in the first quarter of the year, while we draw inventories in the succeeding quarters.
  • Prepaid expenses and other current assets decreased due to Retail taking delivery of prepaid inventories in preparation for the spring planting and application seasons in North America.
  • Property, plant and equipment decreased due to depreciation more than offsetting capital expenditures in the first quarter of 2024.
  • Short-term debt increased due to higher drawdowns on our credit facilities based on our working capital requirements driven by the seasonality of our business.
  • Payables and accrued charges remained consistent, as we have higher customer prepayment balances which were partially offset by lower costs to purchase and produce our inventories and lower capital expenditures accruals.
  • Retained earnings decreased as dividends declared exceeded net earnings.

Capital Structure and Management

Principal Debt Instruments

As part of the normal course of business, we closely monitor our liquidity position. We use a combination of cash generated from operations and short-term and long-term debt to finance our operations. We continually evaluate various financing arrangements and may seek to engage in transactions from time to time when market and other conditions are favorable. We were in compliance with our debt covenants and did not have any changes to our credit ratings for the three months ended March 31, 2024.

Capital Structure (Debt and Equity)

(millions of US dollars)

March 31, 2024

 

December 31, 2023

Short-term debt

2,835

 

1,815

Current portion of long-term debt

513

 

512

Current portion of lease liabilities

346

 

327

Long-term debt

8,910

 

8,913

Lease liabilities

1,034

 

999

Shareholders' equity

24,996

 

25,201

Commercial Paper, Credit Facilities and Other Debt

We have several credit facilities available in the jurisdictions where we operate. We also have a commercial paper program, which is limited to the undrawn amount under our $4,500 million unsecured revolving term credit facility and excess cash invested in highly liquid securities. As at March 31, 2024, we had $1,963 million of commercial paper outstanding.

As at March 31, 2024, $240 million in letters of credit were outstanding and committed, with $118 million of remaining credit available under our dedicated letter of credit facilities.

On March 7, 2024, we entered into an uncommitted $500 million accounts receivable repurchase facility, under which we drew borrowings of $100 million as at March 31, 2024. See Note 6 to the interim financial statements for a further description of this facility.

In March 2024, we filed a base shelf prospectus in Canada and the US qualifying the issuance, subject to approval of the Board of Directors, of common shares, debt securities and other securities during a period of 25 months from March 22, 2024.

Outstanding Share Data

 

As at May 7, 2024

Common shares

 494,628,434

Options to purchase common shares

 3,752,004

For more information on our capital structure and management, see Note 24 to the consolidated financial statements in our 2023 Annual Report.

Quarterly Results

(millions of US dollars, except as otherwise noted)

Q1 2024

Q4 2023

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022

Q2 2022

Sales

5,389

5,664

5,631

11,654

6,107

7,533

8,188

14,506

Net earnings

165

176

82

448

576

1,118

1,583

3,601

Net earnings attributable to equity holders of Nutrien

158

172

75

440

571

1,112

1,577

3,593

Net earnings per share attributable to equity holders of Nutrien

 

 

 

 

 

 

 

 

Basic

0.32

0.35

0.15

0.89

1.14

2.15

2.95

6.53

Diluted

0.32

0.35

0.15

0.89

1.14

2.15

2.94

6.51

Our quarterly earnings are significantly affected by the seasonality of our business, fertilizer benchmark prices, which have been volatile over the last two years and are affected by demand-supply conditions, grower affordability and weather. See Note 8 to the interim financial statements.

The following table describes certain items that impacted our quarterly earnings:

Quarter

Transaction or Event

Q2 2023

$698 million non-cash impairment of assets comprised of a $233 million non-cash impairment of our Phosphate White Springs property, plant and equipment due to a decrease in our forecasted phosphate margins and a $465 million non-cash impairment of our Retail – South America assets primarily related to goodwill mainly due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates which lowered our forecasted earnings.

Q3 2022

$330 million reversal of non-cash impairment of our Phosphate White Springs property, plant and equipment related to higher forecasted global prices and a more favorable outlook for phosphate margins.

Q2 2022

$450 million reversal of non-cash impairment of our Phosphate Aurora property, plant and equipment related to higher forecasted global prices and a more favorable outlook for phosphate margins.

Critical Accounting Estimates

Our significant accounting policies are disclosed in our 2023 Annual Report. We have discussed the development, selection and application of our key accounting policies, and the critical accounting estimates and assumptions they involve, with the Audit Committee of the Board. Our critical accounting estimates are discussed on pages 72 to 74 of our 2023 Annual Report. There were no material changes to our critical accounting estimates for the three months ended March 31, 2024.

Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, and National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

There has been no change in our internal control over financial reporting during the three months ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Forward-Looking Statements

Certain statements and other information included in this document, including within the “Market Outlook and Guidance” section, constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) under applicable securities laws (such statements are often accompanied by words such as “anticipate”, “forecast”, “expect”, “believe”, “may”, “will”, “should”, “estimate”, “project”, “intend” or other similar words). All statements in this document, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to:

Nutrien's business strategies, plans, prospects and opportunities; Nutrien's 2024 full-year guidance, including expectations regarding Retail adjusted EBITDA, Potash sales volumes, Nitrogen sales volumes, Phosphate sales volumes, depreciation and amortization, finance costs, effective tax rate and capital expenditures; our projections to generate strong cash from operations; expectations regarding our capital allocation intentions and strategies; our ability to advance strategic initiatives and high value growth investments, including expectations regarding our ability to serve growers, maintain a low-cost position of fertilizer production assets and increase free cash flow; capital spending expectations for 2024 and beyond; expectations regarding our ability to generate and enhance free cash flow; expectations regarding performance of our operating segments in 2024, including increased fertilizer sales volumes and growth in Retail earnings; our operating segment market outlooks and our expectations for market conditions and fundamentals in 2024 and beyond, and the anticipated supply and demand for our products and services, expected market, industry and growing conditions with respect to crop nutrient application rates, planted acres, grower crop investment, crop mix, including the need to replenish soil nutrient levels, production volumes and expenses, shipments, natural gas costs and availability, consumption, prices, operating rates and the impact of seasonality, import and export volumes, economic sanctions and restrictions, operating rates, inventories, crop development and natural gas curtailments; the negotiation of sales contracts; acquisitions and divestitures and the anticipated benefits thereof; and expectations in connection with our ability to deliver long-term returns to shareholders.

These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this document. Although we believe that these assumptions are reasonable, having regard to our experience and our perception of historical trends, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place undue reliance on these assumptions and such forward-looking statements. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.

The additional key assumptions that have been made in relation to the operation of our business as currently planned and our ability to achieve our business objectives include, among other things, assumptions with respect to: our ability to successfully implement our business strategies, growth and capital allocation investments and initiatives that we will conduct our operations and achieve results of operations as anticipated; our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions and divestitures, and that we will be able to implement our standards, controls, procedures and policies in respect of any acquired businesses and to realize the expected synergies on the anticipated timeline or at all; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, expenses, margins, demand, supply, product availability, shipments, consumption, weather conditions, including the current El Niño weather pattern, supplier agreements, product distribution agreements, inventory levels, exports, crop development and cost of labor and interest, exchange and effective tax rates; potash demand growth in offshore markets and normalization of Canpotex port operations; global economic conditions and the accuracy of our market outlook expectations for 2024 and in the future; assumptions related to our assessment of recoverable amount estimates of our assets, including in relation to our Retail - South America group of CGUs goodwill and intangible asset impairments; assumptions related to the calculation of recoverable amount of our Aurora and White Springs CGUs, including internal sales and input price forecasts, discount rate, long-term growth rate and end of expected mine life; our intention to complete share repurchases under our normal course issuer bid programs, including Toronto Stock Exchange approval, the funding of such share repurchases, existing and future market conditions, including with respect to the price of our common shares, and compliance with respect to applicable limitations under securities laws and regulations and stock exchange policies and assumptions related to our ability to fund our dividends at the current level; our expectations regarding the impacts, direct and indirect, of certain geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East on, among other things, global supply and demand, including for crop nutrients, energy and commodity prices, global interest rates, supply chains and the global macroeconomic environment, including inflation; assumptions regarding future markets for clean ammonia; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable terms; our ability to maintain investment grade ratings and achieve our performance targets; our ability to successfully negotiate sales and other contracts and our ability to successfully implement new initiatives and programs.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; failure to achieve expected results of our business strategy, capital allocation initiatives or results of operations; failure to complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; seasonality; climate change and weather conditions, including the current El Niño weather pattern (and transition to El Niña weather pattern), including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy (including tariffs, trade restrictions and climate change initiatives), government ownership requirements, changes in environmental, tax, antitrust and other laws or regulations and the interpretation thereof; political or military risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism and industrial espionage; our ability to access sufficient, cost-effective and timely transportation, distribution and storage of products (including potential rail transportation and port disruptions due to labor strikes and/or work stoppages or other similar actions); the occurrence of a major environmental or safety incident or becoming subject to legal or regulatory proceedings; innovation and cybersecurity risks related to our systems, including our costs of addressing or mitigating such risks; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities or challenges related to our major facilities that are out of our control; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; the risk that rising interest rates and/or deteriorated business operating results may result in the further impairment of assets or goodwill attributed to certain of our cash generating units; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East, and their potential impact on, among other things, global market conditions and supply and demand, including for crop nutrients, energy and commodity prices, interest rates, supply chains and the global economy generally; our ability to execute on our strategies related to environmental, social and governance matters, and achieve related expectations, targets and commitments; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States.

The purpose of our Retail adjusted EBITDA, depreciation and amortization, finance costs, effective tax rate and capital expenditures guidance ranges are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

The forward-looking statements in this document are made as of the date hereof and Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as may be required under applicable Canadian securities legislation or applicable US federal securities laws.

Terms and Definitions

For the definitions of certain financial and non-financial terms used in this document, as well as a list of abbreviated company names and sources, see the “Terms & Definitions” section of our 2023 Annual Report. All references to per share amounts pertain to diluted net earnings (loss) per share, “n/m” indicates information that is not meaningful, and all financial amounts are stated in millions of US dollars, unless otherwise noted.

About Nutrien

Nutrien is a leading provider of crop inputs and services, helping to safely and sustainably feed a growing world. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our integrated business and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.

More information about Nutrien can be found at www.nutrien.com.

Selected financial data for download can be found in our data tool at www.nutrien.com/investors/interactive-datatool

Such data is not incorporated by reference herein.

Nutrien will host a Conference Call on Thursday, May 9, 2024 at 10:00 a.m. Eastern Time.

Telephone conference dial-in numbers:

  • From Canada and the US 1-800-717-1738
  • International 1-646-307-1865
  • No access code required. Please dial in 15 minutes prior to ensure you are placed on the call in a timely manner.

Live Audio Webcast: Visit https://www.nutrien.com/investors/events/2024-q1-earnings-conference-call

Non-GAAP Financial Measures

We use both International Financial Reporting Standards (“IFRS”) measures and certain non-GAAP financial measures to assess performance. Non-GAAP financial measures are financial measures disclosed by the Company that (a) depict historical or expected future financial performance, financial position or cash flow of the Company, (b) with respect to their composition, exclude amounts that are included in, or include amounts that are excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the Company, (c) are not disclosed in the financial statements of the Company and (d) are not a ratio, fraction, percentage or similar representation. Non-GAAP ratios are financial measures disclosed by the Company that are in the form of a ratio, fraction, percentage or similar representation that has a non-GAAP financial measure as one or more of its components, and that are not disclosed in the financial statements of the Company.

These non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS and, therefore, are unlikely to be comparable to similar financial measures presented by other companies. Management believes these non-GAAP financial measures and non-GAAP ratios provide transparent and useful supplemental information to help investors evaluate our financial performance, financial condition and liquidity using the same measures as management. These non-GAAP financial measures and non-GAAP ratios should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

The following section outlines our non-GAAP financial measures and non-GAAP ratios, their compositions, and why management uses each measure. It also includes reconciliations to the most directly comparable IFRS measures. Except as otherwise described herein, our non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable. As additional non-recurring or unusual items arise in the future, we generally exclude these items in our calculations.

Adjusted EBITDA (Consolidated)

Most directly comparable IFRS financial measure: Net earnings (loss).

Definition: Adjusted EBITDA is calculated as net earnings (loss) before finance costs, income taxes, depreciation and amortization, share-based compensation and certain foreign exchange gain/loss (net of related derivatives). We also adjust this measure for the following other income and expenses that are excluded when management evaluates the performance of our day-to-day operations: integration and restructuring related costs, impairment or reversal of impairment of assets, gain or loss on disposal of certain businesses and investments, asset retirement obligations (“ARO”) and accrued environmental costs (“ERL”) related to our non-operating sites, and loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps).

Why we use the measure and why it is useful to investors: It is not impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations. It provides a measure of our ability to service debt and to meet other payment obligations and as a component of employee remuneration calculations.

 

Three Months Ended March 31

(millions of US dollars)

2024

 

2023

Net earnings

165

 

576

Finance costs

179

 

170

Income tax expense

75

 

193

Depreciation and amortization

565

 

496

EBITDA 1

984

 

1,435

Adjustments:

 

 

 

Share-based compensation expense

6

 

15

Foreign exchange loss (gain), net of related derivatives

43

 

(34)

ARO/ERL expense for non-operating sites

3

 

Loss on Blue Chip Swaps

19

 

Integration and restructuring related costs

 

5

Adjusted EBITDA

1,055

 

1,421

1 EBITDA is calculated as net earnings before finance costs, income taxes, and depreciation and amortization.

Adjusted Net Earnings and Adjusted Net Earnings Per Share

Most directly comparable IFRS financial measure: Net earnings (loss) and diluted net earnings (loss) per share.

Definition: Adjusted net earnings and related per share information are calculated as net earnings (loss) before share-based compensation and certain foreign exchange gain/loss (net of related derivatives), net of tax. We also adjust this measure for the following other income and expenses (net of tax) that are excluded when management evaluates the performance of our day-to-day operations: certain integration and restructuring related costs, impairment or reversal of impairment of assets, gain or loss on disposal of certain businesses and investments, gain or loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting, asset retirement obligations and accrued environmental costs related to our non-operating sites, loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps), change in recognition of tax losses and deductible temporary differences related to impairments and certain changes to tax declarations (e.g., “Swiss Tax Reform adjustment”). We generally apply the annual forecasted effective tax rate to specific adjustments during the year, and at year-end, we apply the actual effective tax rate.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations and is used as a component of employee remuneration calculations.

 

Three Months Ended

March 31, 2024

 

 

 

 

 

Per

 

Increases

 

 

 

Diluted

(millions of US dollars, except as otherwise noted)

(Decreases)

 

Post-Tax

 

Share

Net earnings attributable to equity holders of Nutrien

 

 

158

 

0.32

Adjustments:

 

 

 

 

 

Share-based compensation expense

6

 

5

 

0.01

Foreign exchange loss, net of related derivatives

43

 

46

 

0.09

ARO/ERL expense for non-operating sites

3

 

2

 

Loss on Blue Chip Swaps

19

 

19

 

0.04

Adjusted net earnings

 

 

230

 

0.46

 

Three Months Ended

March 31, 2023

 

 

 

 

 

Per

 

Increases

 

 

 

Diluted

(millions of US dollars, except as otherwise noted)

(Decreases)

 

Post-Tax

 

Share

Net earnings attributable to equity holders of Nutrien

 

 

571

 

1.14

Adjustments:

 

 

 

 

 

Share-based compensation expense

15

 

11

 

0.01

Foreign exchange gain, net of related derivatives

(34)

 

(25)

 

(0.05)

Integration and restructuring related costs

5

 

4

 

0.01

Adjusted net earnings

 

 

561

 

1.11

Gross Margin Excluding Depreciation and Amortization Per Tonne – Manufactured Product

Most directly comparable IFRS financial measure: Gross margin.

Definition: Gross margin per tonne less depreciation and amortization per tonne for manufactured products. Reconciliations are provided in the “Segment Results” section.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations, which excludes the effects of items that primarily reflect the impact of long-term investment and financing decisions.

Potash Controllable Cash Cost of Product Manufactured (“COPM”) Per Tonne

Most directly comparable IFRS financial measure: Cost of goods sold (“COGS”) for the Potash segment.

Definition: Total Potash COGS excluding depreciation and amortization expense included in COPM, royalties, natural gas costs and carbon taxes, change in inventory, and other adjustments, divided by potash production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Potash controllable cash COPM excludes the effects of production from other periods and the impacts of our long-term investment decisions, supporting a focus on the performance of our day-to-day operations. Potash controllable cash COPM also excludes royalties and natural gas costs and carbon taxes, which management does not consider controllable, as they are primarily driven by regulatory and market conditions.

 

Three Months Ended March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

Total COGS – Potash

358

 

305

Change in inventory

28

 

40

Other adjustments 1

(3)

 

(8)

COPM

383

 

337

Depreciation and amortization in COPM

(153)

 

(100)

Royalties in COPM

(19)

 

(31)

Natural gas costs and carbon taxes in COPM

(12)

 

(16)

Controllable cash COPM

199

 

190

Production tonnes (tonnes – thousands)

3,565

 

3,088

Potash controllable cash COPM per tonne

56

 

62

1 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

Nutrien Financial Adjusted Net Interest Margin

Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial net receivables outstanding for the last four rolling quarters.

Why we use the measure and why it is useful to investors: Used by credit rating agencies and others to evaluate the financial performance of Nutrien Financial.

 

Rolling four quarters ended March 31, 2024

(millions of US dollars, except as otherwise noted)

Q2 2023

 

Q3 2023

 

Q4 2023

 

Q1 2024

 

Total/Average

Nutrien Financial revenue

122

 

73

 

70

 

66

 

 

Deemed interest expense 1

(39)

 

(41)

 

(36)

 

(27)

 

 

Net interest

83

 

32

 

34

 

39

 

188

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial net receivables

4,716

 

4,353

 

2,893

 

2,489

 

3,613

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2023

(millions of US dollars, except as otherwise noted)

Q1 2023

 

Q2 2023

 

Q3 2023

 

Q4 2023

 

Total/Average

Nutrien Financial revenue

57

 

122

 

73

 

70

 

 

Deemed interest expense 1

(20)

 

(39)

 

(41)

 

(36)

 

 

Net interest

37

 

83

 

32

 

34

 

186

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial net receivables

2,283

 

4,716

 

4,353

 

2,893

 

3,561

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

5.2

1 Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.

Retail Cash Operating Coverage Ratio

Definition: Retail selling, general and administrative, and other expenses (income), excluding depreciation and amortization expense, divided by Retail gross margin excluding depreciation and amortization expense in cost of goods sold, for the last four rolling quarters.

Why we use the measure and why it is useful to investors: To understand the costs and underlying economics of our Retail operations and to assess our Retail operating performance and ability to generate free cash flow.

 

Rolling four quarters ended March 31, 2024

 

(millions of US dollars, except as otherwise noted)

Q2 2023

 

Q3 2023

 

Q4 2023

 

Q1 2024

 

Total

 

Selling expenses

971

 

798

 

841

 

790

 

3,400

 

General and administrative expenses

55

 

57

 

55

 

52

 

219

 

Other expenses

29

 

37

 

77

 

22

 

165

 

Operating expenses

1,055

 

892

 

973

 

864

 

3,784

 

Depreciation and amortization in operating expenses

(185)

 

(186)

 

(199)

 

(190)

 

(760)

 

Operating expenses excluding depreciation and amortization

870

 

706

 

774

 

674

 

3,024

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

1,931

 

895

 

989

 

747

 

4,562

 

Depreciation and amortization in cost of goods sold

3

 

3

 

2

 

4

 

12

 

Gross margin excluding depreciation and amortization

1,934

 

898

 

991

 

751

 

4,574

 

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2023

 

(millions of US dollars, except as otherwise noted)

Q1 2023

 

Q2 2023

 

Q3 2023

 

Q4 2023

 

Total

 

Selling expenses

765

 

971

 

798

 

841

 

3,375

 

General and administrative expenses

50

 

55

 

57

 

55

 

217

 

Other expenses

15

 

29

 

37

 

77

 

158

 

Operating expenses

830

 

1,055

 

892

 

973

 

3,750

 

Depreciation and amortization in operating expenses

(179)

 

(185)

 

(186)

 

(199)

 

(749)

 

Operating expenses excluding depreciation and amortization

651

 

870

 

706

 

774

 

3,001

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

615

 

1,931

 

895

 

989

 

4,430

 

Depreciation and amortization in cost of goods sold

2

 

3

 

3

 

2

 

10

 

Gross margin excluding depreciation and amortization

617

 

1,934

 

898

 

991

 

4,440

 

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

68

 

Retail Adjusted Average Working Capital to Sales and Retail Adjusted Average Working Capital to Sales Excluding Nutrien Financial

Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the sales and working capital of certain acquisitions during the first year following the acquisition. We also look at this metric excluding Nutrien Financial revenue and working capital.

Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A lower or higher percentage represents increased or decreased efficiency, respectively. The metric excluding Nutrien Financial shows the impact that the working capital of Nutrien Financial has on the ratio.

 

Rolling four quarters ended March 31, 2024

(millions of US dollars, except as otherwise noted)

Q2 2023

 

Q3 2023

 

Q4 2023

 

Q1 2024

 

Average/Total

Current assets

11,983

 

10,398

 

10,498

 

11,821

 

 

Current liabilities

(8,246)

 

(5,228)

 

(8,210)

 

(8,401)

 

 

Working capital

3,737

 

5,170

 

2,288

 

3,420

 

3,654

Working capital from certain recent acquisitions

 

 

 

 

 

Adjusted working capital

3,737

 

5,170

 

2,288

 

3,420

 

3,654

Nutrien Financial working capital

(4,716)

 

(4,353)

 

(2,893)

 

(2,489)

 

 

Adjusted working capital excluding Nutrien Financial

(979)

 

817

 

(605)

 

931

 

41

 

Sales

9,128

 

3,490

 

3,502

 

3,308

 

 

Sales from certain recent acquisitions

 

 

 

 

 

Adjusted sales

9,128

 

3,490

 

3,502

 

3,308

 

19,428

Nutrien Financial revenue

(122)

 

(73)

 

(70)

 

(66)

 

 

Adjusted sales excluding Nutrien Financial

9,006

 

3,417

 

3,432

 

3,242

 

19,097

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

 

 

 

 

 

 

 

19

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

 

 

nil

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2023

(millions of US dollars, except as otherwise noted)

Q1 2023

 

Q2 2023

 

Q3 2023

 

Q4 2023

 

Average/Total

Current assets

13,000

 

11,983

 

10,398

 

10,498

 

 

Current liabilities

(8,980)

 

(8,246)

 

(5,228)

 

(8,210)

 

 

Working capital

4,020

 

3,737

 

5,170

 

2,288

 

3,804

Working capital from certain recent acquisitions

 

 

 

 

 

Adjusted working capital

4,020

 

3,737

 

5,170

 

2,288

 

3,804

Nutrien Financial working capital

(2,283)

 

(4,716)

 

(4,353)

 

(2,893)

 

 

Adjusted working capital excluding Nutrien Financial

1,737

 

(979)

 

817

 

(605)

 

243

 

 

 

 

 

 

 

 

 

 

Sales

3,422

 

9,128

 

3,490

 

3,502

 

 

Sales from certain recent acquisitions

 

 

 

 

 

Adjusted sales

3,422

 

9,128

 

3,490

 

3,502

 

19,542

Nutrien Financial revenue

(57)

 

(122)

 

(73)

 

(70)

 

 

Adjusted sales excluding Nutrien Financial

3,365

 

9,006

 

3,417

 

3,432

 

19,220

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

 

 

 

 

 

 

 

19

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

 

 

1

Other Financial Measures

Selected Additional Financial Data

Nutrien Financial

As at March 31, 2024

 

As at

December

31, 2023

(millions of US dollars)

Current

<31 Days

Past Due

31–90

Days

Past Due

>90 Days

Past Due

Gross

Receivables

Allowance 1

Net

Receivables

 

Net

Receivables

North America

1,275

91

254

146

1,766

(48)

1,718

 

2,206

International

598

47

78

58

781

(10)

771

 

687

Nutrien Financial receivables

1,873

138

332

204

2,547

(58)

2,489

 

2,893

1 Bad debt expense on the above receivables for the three months ended March 31, 2024 and 2023 were $9 million and $1 million, respectively, in the Retail segment.

Supplementary Financial Measures

Supplementary financial measures are financial measures disclosed by the Company that (a) are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company, (b) are not disclosed in the financial statements of the Company, (c) are not non-GAAP financial measures, and (d) are not non-GAAP ratios.

The following section provides an explanation of the composition of those supplementary financial measures if not previously provided.

Sustaining capital expenditures: Represents capital expenditures that are required to sustain operations at existing levels and include major repairs and maintenance and plant turnarounds.

Investing capital expenditures: Represents capital expenditures related to significant expansions of current operations or to create cost savings (synergies). Investing capital expenditures excludes capital outlays for business acquisitions and equity-accounted investees.

Mine development and pre-stripping capital expenditures: Represents capital expenditures that are required for activities to open new areas underground and/or develop a mine or ore body to allow for future production mining and activities required to prepare and/or access the ore, i.e., removal of an overburden that allows access to the ore.

Cash used for dividends and share repurchases (shareholder returns): Calculated as dividends paid to Nutrien’s shareholders plus repurchase of common shares as reflected in the unaudited condensed consolidated statements of cash flows. This measure is useful as it represents return of capital to shareholders.

Condensed Consolidated Financial Statements

Unaudited

Condensed Consolidated Statements of Earnings

 

 

Three Months Ended

 

 

March 31

(millions of US dollars, except as otherwise noted)

Note

2024

 

2023

SALES

2, 9

5,389

 

6,107

Freight, transportation and distribution

 

238

 

199

Cost of goods sold

 

3,614

 

3,995

GROSS MARGIN

 

1,537

 

1,913

Selling expenses

 

794

 

770

General and administrative expenses

 

154

 

145

Provincial mining taxes

 

68

 

119

Share-based compensation expense

 

6

 

15

Other expenses (income)

3

96

 

(75)

EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES

419

 

939

Finance costs

 

179

 

170

EARNINGS BEFORE INCOME TAXES

 

240

 

769

Income tax expense

4

75

 

193

NET EARNINGS

 

165

 

576

Attributable to

 

 

 

 

Equity holders of Nutrien

 

158

 

571

Non-controlling interest

 

7

 

5

NET EARNINGS

 

165

 

576

 

 

 

 

 

NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS")

Basic

 

0.32

 

1.14

Diluted

 

0.32

 

1.14

Weighted average shares outstanding for basic EPS

 

494,570,000

 

501,175,000

Weighted average shares outstanding for diluted EPS

 

494,792,000

 

502,220,000

Condensed Consolidated Statements of Comprehensive Income

 

Three Months Ended

 

March 31

(millions of US dollars)

2024

 

2023

NET EARNINGS

165

 

576

Other comprehensive (loss) income

 

 

 

Items that will not be reclassified to net earnings:

 

 

 

Net actuarial loss on defined benefit plans

 

(3)

Net fair value (loss) gain on investments

(18)

 

5

Items that have been or may be subsequently reclassified to net earnings:

 

 

 

(Loss) gain on currency translation of foreign operations

(66)

 

1

Other

(18)

 

(1)

OTHER COMPREHENSIVE (LOSS) INCOME

(102)

 

2

COMPREHENSIVE INCOME

63

 

578

Attributable to

 

 

 

Equity holders of Nutrien

57

 

573

Non-controlling interest

6

 

5

COMPREHENSIVE INCOME

63

 

578

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Cash Flows

 

 

Three Months Ended

 

 

March 31

(millions of US dollars)

Note

2024

 

2023

 

 

 

 

Note 1

OPERATING ACTIVITIES

 

 

 

 

Net earnings

 

165

 

576

Adjustments for:

 

 

 

 

Depreciation and amortization

 

565

 

496

Share-based compensation expense

 

6

 

15

Provision for deferred income tax

 

28

 

21

Net (undistributed) distributed earnings of equity-accounted investees

 

(50)

 

163

Gain on amendments to other post-retirement pension plans

3

 

(80)

Loss on Blue Chip Swaps

3

19

 

Long-term income tax receivables and payables

 

43

 

(72)

Other long-term assets, liabilities and miscellaneous

 

64

 

7

Cash from operations before working capital changes

 

840

 

1,126

Changes in non-cash operating working capital:

 

 

 

 

Receivables

 

(257)

 

535

Inventories and prepaid expenses and other current assets

 

(1,330)

 

(1,493)

Payables and accrued charges

 

260

 

(1,026)

CASH USED IN OPERATING ACTIVITIES

 

(487)

 

(858)

INVESTING ACTIVITIES

 

 

 

 

Capital expenditures 1

 

(373)

 

(465)

Business acquisitions, net of cash acquired

 

 

(111)

Proceeds from sales of Blue Chip Swaps, net of purchases

3

(19)

 

Net changes in non-cash working capital

 

(90)

 

(100)

Other

 

(12)

 

(18)

CASH USED IN INVESTING ACTIVITIES

 

(494)

 

(694)

FINANCING ACTIVITIES

 

 

 

 

Proceeds from debt with maturity periods within three months, net

 

926

 

1,873

Proceeds from debt

 

 

1,500

Repayment of debt

 

(14)

 

(17)

Repayment of principal portion of lease liabilities

 

(96)

 

(87)

Dividends paid to Nutrien's shareholders

 

(261)

 

(246)

Repurchase of common shares

 

 

(897)

Issuance of common shares

 

1

 

28

Other

 

(8)

 

(25)

CASH PROVIDED BY FINANCING ACTIVITIES

 

548

 

2,129

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

(12)

 

(5)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(445)

 

572

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

 

941

 

901

CASH AND CASH EQUIVALENTS – END OF PERIOD

 

496

 

1,473

Cash and cash equivalents is composed of:

 

 

 

 

Cash

 

422

 

361

Short-term investments

 

74

 

1,112

 

 

496

 

1,473

SUPPLEMENTAL CASH FLOWS INFORMATION

 

 

 

 

Interest paid

 

132

 

98

Income taxes paid

 

50

 

1,319

Total cash outflow for leases

 

131

 

119

1 Includes additions to property, plant and equipment, and intangible assets for the three months ended March 31, 2024 of $338 million and $35 million (2023 – $422 million and $43 million).

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Changes in Shareholders’ Equity

 

 

 

 

 

 

 

Accumulated Other Comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income ("AOCI")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on Currency

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Number of

 

 

 

 

 

Translation

 

 

 

 

 

 

 

Holders

 

Non-

 

 

 

 

Common

 

Share

 

Contributed

 

of Foreign

 

 

 

Total

 

Retained

 

of

 

Controlling

 

Total

 

(millions of US dollars, except as otherwise noted)

Shares

 

Capital

 

Surplus

 

Operations

 

Other

 

AOCI

 

Earnings

 

Nutrien

 

Interest

 

Equity

 

BALANCE – DECEMBER 31, 2022

507,246,105

 

14,172

 

109

 

(374)

 

(17)

 

(391)

 

11,928

 

25,818

 

45

 

25,863

 

Net earnings

 

 

 

 

 

 

571

 

571

 

5

 

576

 

Other comprehensive income

 

 

 

1

 

1

 

2

 

 

2

 

 

2

 

Shares repurchased

(11,751,290)

 

(328)

 

 

 

 

 

(571)

 

(899)

 

 

(899)

 

Dividends declared - $0.53/share

 

 

 

 

 

 

(265)

 

(265)

 

 

(265)

 

Non-controlling interest transactions

 

 

 

 

 

 

 

 

(6)

 

(6)

 

Effect of share-based compensation including issuance of

 

common shares

579,208

 

34

 

(3)

 

 

 

 

 

31

 

 

31

 

Transfer of net loss on cash flow hedges

 

 

 

 

5

 

5

 

 

5

 

 

5

 

Transfer of net actuarial loss on defined benefit plans

 

 

 

 

3

 

3

 

(3)

 

 

 

 

Other

 

 

 

(2)

 

 

(2)

 

 

(2)

 

 

(2)

 

BALANCE – MARCH 31, 2023

496,074,023

 

13,878

 

106

 

(375)

 

(8)

 

(383)

 

11,660

 

25,261

 

44

 

25,305

 

BALANCE – DECEMBER 31, 2023

494,551,730

 

13,838

 

83

 

(286)

 

(10)

 

(296)

 

11,531

 

25,156

 

45

 

25,201

 

Net earnings

 

 

 

 

 

 

158

 

158

 

7

 

165

 

Other comprehensive loss

 

 

 

(65)

 

(36)

 

(101)

 

 

(101)

 

(1)

 

(102)

 

Dividends declared - $0.54/share

 

 

 

 

 

 

(266)

 

(266)

 

 

(266)

 

Non-controlling interest transactions

 

 

 

 

 

 

 

 

(8)

 

(8)

 

Effect of share-based compensation including issuance of

 

common shares

37,199

 

2

 

2

 

 

 

 

 

4

 

 

4

 

Transfer of net loss on cash flow hedges

 

 

 

 

2

 

2

 

 

2

 

 

2

 

BALANCE – MARCH 31, 2024

494,588,929

 

13,840

 

85

 

(351)

 

(44)

 

(395)

 

11,423

 

24,953

 

43

 

24,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

 

Condensed Consolidated Balance Sheets

 

 

March 31

 

December 31

As at (millions of US dollars)

Note

2024

 

2023

 

2023

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

496

 

1,473

 

941

Receivables

6, 9

5,561

 

6,009

 

5,398

Inventories

 

8,188

 

9,852

 

6,336

Prepaid expenses and other current assets

 

905

 

937

 

1,495

 

 

15,150

 

18,271

 

14,170

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

 

22,410

 

21,832

 

22,461

Goodwill

 

12,083

 

12,433

 

12,114

Intangible assets

 

2,165

 

2,292

 

2,217

Investments

 

768

 

686

 

736

Other assets

 

999

 

1,078

 

1,051

TOTAL ASSETS

 

53,575

 

56,592

 

52,749

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Short-term debt

6

2,835

 

4,013

 

1,815

Current portion of long-term debt

 

513

 

545

 

512

Current portion of lease liabilities

 

346

 

306

 

327

Payables and accrued charges

 

9,431

 

10,611

 

9,467

 

 

13,125

 

15,475

 

12,121

Non-current liabilities

 

 

 

 

 

 

Long-term debt

 

8,910

 

9,510

 

8,913

Lease liabilities

 

1,034

 

880

 

999

Deferred income tax liabilities

 

3,601

 

3,603

 

3,574

Pension and other post-retirement benefit liabilities

 

246

 

242

 

252

Asset retirement obligations and accrued environmental costs

 

1,485

 

1,389

 

1,489

Other non-current liabilities

 

178

 

188

 

200

TOTAL LIABILITIES

 

28,579

 

31,287

 

27,548

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Share capital

 

13,840

 

13,878

 

13,838

Contributed surplus

 

85

 

106

 

83

Accumulated other comprehensive loss

 

(395)

 

(383)

 

(296)

Retained earnings

 

11,423

 

11,660

 

11,531

Equity holders of Nutrien

 

24,953

 

25,261

 

25,156

Non-controlling interest

 

43

 

44

 

45

TOTAL SHAREHOLDERS’ EQUITY

 

24,996

 

25,305

 

25,201

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

53,575

 

56,592

 

52,749

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Notes to the Condensed Consolidated Financial Statements

As at and for the Three Months Ended March 31, 2024

Note 1 Basis of presentation

Nutrien Ltd. (collectively with its subsidiaries, “Nutrien”, “we”, “us”, “our” or “the Company”) is a leading provider of crop inputs and services. Nutrien plays a critical role in helping growers around the globe increase food production in a sustainable manner.

These unaudited interim condensed consolidated financial statements (“interim financial statements”) are based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and have been prepared in accordance with IAS 34, “Interim Financial Reporting”. The accounting policies and methods of computation used in preparing these interim financial statements are materially consistent with those used in the preparation of our 2023 annual audited consolidated financial statements, as well as any amended standards adopted in 2024 that we previously disclosed. These interim financial statements include the accounts of Nutrien and its subsidiaries; however, they do not include all disclosures normally provided in annual audited consolidated financial statements and should be read in conjunction with our 2023 annual audited consolidated financial statements. Certain immaterial 2023 figures have been reclassified in the condensed consolidated statements of cash flows.

In management’s opinion, the interim financial statements include all adjustments necessary to fairly present such information in all material respects. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year. These interim financial statements were authorized by the Audit Committee of the Board of Directors for issue on May 8, 2024.

Note 2 Segment information

We have four reportable operating segments: Nutrien Ag Solutions (“Retail”), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seed and merchandise. Retail provides services directly to growers through a network of farm centers in North America, South America and Australia. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that each produces.

 

 

Three Months Ended March 31, 2024

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

(millions of US dollars)

Retail

 

Potash

 

Nitrogen

 

Phosphate

 

and Others

 

Eliminations

 

Consolidated

Sales

– third party

3,308

 

821

 

846

 

414

 

 

 

5,389

 

– intersegment

 

106

 

182

 

85

 

 

(373)

 

Sales

– total

3,308

 

927

 

1,028

 

499

 

 

(373)

 

5,389

Freight, transportation and distribution 1

 

114

 

117

 

62

 

 

(55)

 

238

Net sales

3,308

 

813

 

911

 

437

 

 

(318)

 

5,151

Cost of goods sold

2,561

 

358

 

604

 

372

 

 

(281)

 

3,614

Gross margin

747

 

455

 

307

 

65

 

 

(37)

 

1,537

Selling expenses

790

 

3

 

7

 

2

 

(2)

 

(6)

 

794

General and administrative expenses

52

 

4

 

5

 

4

 

89

 

 

154

Provincial mining taxes

 

68

 

 

 

 

 

68

Share-based compensation expense

 

 

 

 

6

 

 

6

Other expenses (income)

22

 

(3)

 

(33)

 

8

 

97

 

5

 

96

(Loss) earnings before finance costs and income taxes

(117)

 

383

 

328

 

51

 

(190)

 

(36)

 

419

Depreciation and amortization

194

 

147

 

136

 

70

 

18

 

 

565

EBITDA 2

77

 

530

 

464

 

121

 

(172)

 

(36)

 

984

Share-based compensation expense

 

 

 

 

6

 

 

6

ARO/ERL expense for non-operating sites 3

 

 

 

 

3

 

 

3

Foreign exchange loss, net of related derivatives

 

 

 

 

43

 

 

43

Loss on Blue Chip Swaps

 

 

 

 

19

 

 

19

Adjusted EBITDA

77

 

530

 

464

 

121

 

(101)

 

(36)

 

1,055

Assets – as at March 31, 2024

24,273

 

13,562

 

11,606

 

2,420

 

2,326

 

(612)

 

53,575

1 Potash freight, transportation and distribution only applies to our North American potash sales volumes.

2 EBITDA is calculated as net earnings (loss) before finance costs, income taxes, and depreciation and amortization.

3 ARO/ERL refers to asset retirement obligations and accrued environmental costs.

 

 

Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

(millions of US dollars)

Retail

 

Potash

 

Nitrogen

 

Phosphate

 

and Others

 

Eliminations

 

Consolidated

Sales

– third party

3,422

 

1,023

 

1,154

 

508

 

 

 

6,107

 

– intersegment

 

54

 

264

 

64

 

 

(382)

 

Sales

– total

3,422

 

1,077

 

1,418

 

572

 

 

(382)

 

6,107

Freight, transportation and distribution

 

75

 

106

 

58

 

 

(40)

 

199

Net sales

3,422

 

1,002

 

1,312

 

514

 

 

(342)

 

5,908

Cost of goods sold

2,807

 

305

 

771

 

427

 

 

(315)

 

3,995

Gross margin

615

 

697

 

541

 

87

 

 

(27)

 

1,913

Selling expenses

765

 

3

 

8

 

2

 

(2)

 

(6)

 

770

General and administrative expenses

50

 

3

 

5

 

3

 

84

 

 

145

Provincial mining taxes

 

119

 

 

 

 

 

119

Share-based compensation expense

 

 

 

 

15

 

 

15

Other expenses (income)

15

 

(7)

 

(14)

 

12

 

(81)

 

 

(75)

(Loss) earnings before finance costs and income taxes

(215)

 

579

 

542

 

70

 

(16)

 

(21)

 

939

Depreciation and amortization

181

 

97

 

134

 

67

 

17

 

 

496

EBITDA

(34)

 

676

 

676

 

137

 

1

 

(21)

 

1,435

Integration and restructuring related costs

 

 

 

 

5

 

 

5

Share-based compensation expense

 

 

 

 

15

 

 

15

Foreign exchange gain, net of related derivatives

 

 

 

 

(34)

 

 

(34)

Adjusted EBITDA

(34)

 

676

 

676

 

137

 

(13)

 

(21)

 

1,421

Assets – as at December 31, 2023

23,056

 

13,571

 

11,466

 

2,438

 

2,818

 

(600)

 

52,749

 

Three Months Ended

 

March 31

(millions of US dollars)

2024

 

2023

Retail sales by product line

 

 

 

Crop nutrients

1,309

 

1,335

Crop protection products

1,114

 

1,154

Seed

485

 

507

Services and other

156

 

148

Merchandise

200

 

246

Nutrien Financial

66

 

57

Nutrien Financial elimination 1

(22)

 

(25)

 

3,308

 

3,422

Potash sales by geography

 

 

 

Manufactured product

 

 

 

North America

520

 

417

Offshore 2

407

 

660

 

927

 

1,077

Nitrogen sales by product line

 

 

 

Manufactured product

 

 

 

Ammonia

244

 

416

Urea and ESN®

366

 

491

Solutions, nitrates and sulfates

319

 

371

Other nitrogen and purchased products

99

 

140

 

1,028

 

1,418

Phosphate sales by product line

 

 

 

Manufactured product

 

 

 

Fertilizer

321

 

302

Industrial and feed

167

 

195

Other phosphate and purchased products

11

 

75

 

499

 

572

1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.

2 Relates to Canpotex Limited (“Canpotex”) (see Note 9) and includes provisional pricing adjustments for the three months ended March 31, 2024 of $12 million (2023 – $(147) million).

Note 3 Other expenses (income)

 

Three Months Ended

 

March 31

(millions of US dollars)

2024

 

2023

Integration and restructuring related costs

 

5

Foreign exchange loss (gain), net of related derivatives

43

 

(34)

Earnings of equity-accounted investees

(51)

 

(37)

Bad debt expense

13

 

9

Project feasibility costs

15

 

13

Customer prepayment costs

16

 

14

Loss on natural gas derivatives not designated as hedge ¹

3

 

Loss on Blue Chip Swaps

19

 

ARO/ERL expense for non-operating sites

3

 

Gain on amendments to other post-retirement pension plans

 

(80)

Other expenses

35

 

35

 

96

 

(75)

1 Relates to unrealized loss for the three months ended March 31, 2024 (2023 – $nil).

Argentina has certain currency controls in place that limit our ability to settle our foreign currency-denominated obligations or remit cash out of Argentina. A Blue Chip Swap is a financial mechanism in Argentina that effectively allows companies to transact in US dollars. In the first quarter of 2024, we incurred a loss on these transactions due to the significant divergence between the Blue Chip Swap market exchange rate and the official Argentinian Central Bank rate.

Note 4 Income taxes

A separate estimated average annual effective income tax rate was determined and applied individually to the interim period pre-tax earnings for each taxing jurisdiction.

 

Three Months Ended

 

March 31

(millions of US dollars, except as otherwise noted)

2024

 

2023

Actual effective tax rate on earnings (%)

30

 

23

Actual effective tax rate including discrete items (%)

31

 

25

Discrete tax adjustments that impacted the tax rate

3

 

18

Note 5 Financial instruments

Natural Gas Derivatives

In 2024, we increased our use of natural gas derivatives to lock-in commodity prices. Our risk management strategies and accounting policies for derivatives that are designated and qualify as cash flow hedges are consistent with those disclosed in Note 10 and Note 30 of our annual consolidated financial statements, respectively. For derivatives that do not quality as cash flow hedges, any gains or losses are recorded in net earnings in the current period.

We assess whether our derivative hedging transactions are expected to be or were highly effective, both at the hedge’s inception and on an ongoing basis, in offsetting changes in fair values of hedged items.

Hedging Transaction

Measurement of Ineffectiveness

Potential Sources of Ineffectiveness

New York Mercantile

Exchange (“NYMEX”)

natural gas hedges

Assessed on a prospective and retrospective basis using regression analyses

Changes in:

• timing of forecast transactions

• volume delivered

• our credit risk or the credit risk of a counterparty

 

As at March 31, 2024

 

 

 

Maturities

 

Average

 

Fair Value of

(millions of US dollars, except as otherwise noted)

Notional 1

 

(year)

 

Contract Price 2

 

Assets (Liabilities)

Derivatives not designated as hedges

 

 

 

 

 

 

 

NYMEX call options

43

 

2024

 

2.77

 

7

Derivatives designated as hedges

 

 

 

 

 

 

 

NYMEX swaps

36

 

2024

 

2.64

 

(9)

1 In millions of Metric Million British Thermal Units (“MMBtu”).

2 US dollars per MMBtu.

Note 6 Short-term debt

On March 7, 2024, we entered into an uncommitted $500 million accounts receivable repurchase facility (the “repurchase facility”), where we may sell certain receivables from customers to a financial institution and agree to repurchase those receivables at a future date. When we draw under this repurchase facility, the receivables from customers remain on our condensed consolidated balance sheet as we control and retain substantially all of the risks and rewards associated with the receivables. As at March 31, 2024, $111 million in receivables from customers were pledged to the repurchase facility and $100 million of borrowings were included in short-term debt with variable interest accruing based on a margin and the Secured Overnight Financing Rate.

Note 7 Capital management

In March 2024, we filed a base shelf prospectus in Canada and the US qualifying the issuance, subject to the approval of the Board of Directors, of common shares, debt securities and other securities during a period of 25 months from March 22, 2024.

Note 8 Seasonality

Seasonality in our business results from increased demand for products during planting season. Crop input sales are generally higher in the spring and fall application seasons. Crop input inventories are normally accumulated leading up to each application season. The results of this seasonality have a corresponding effect on receivables from customers and rebates receivables, inventories, prepaid expenses and other current assets, and trade payables. Our short-term debt also fluctuates during the year to meet working capital requirements. Our cash collections generally occur after the application season is complete, while customer prepayments made to us are typically concentrated in December and January and inventory prepayments paid to our suppliers are typically concentrated in the period from November to January. Feed and industrial sales are more evenly distributed throughout the year.

Note 9 Related party transactions

We sell potash outside Canada and the US exclusively through Canpotex. Canpotex sells potash to buyers, including Nutrien, in export markets pursuant to term and spot contracts at agreed upon prices. Our total revenue is recognized at the amount received from Canpotex representing proceeds from their sale of potash, less net costs of Canpotex.

As at (millions of US dollars)

March 31, 2024

 

December 31, 2023

Receivables from Canpotex

148

 

162

Note 10 Accounting policies, estimates and judgments

IFRS 18, “Presentation and Disclosure in Financial Statements” (“IFRS 18”), which was issued on April 9, 2024, would supersede IAS 1, “Presentation of Financial Statements” and increase the comparability of financial statements by enhancing principles on aggregation and disaggregation. IFRS 18 will be effective January 1, 2027, and will also apply to comparative information. We are reviewing the standard to determine the potential impact.

Contacts

Investor Relations:

Jeff Holzman

Vice President, Investor Relations

(306) 933-8545

Investors@nutrien.com



Media Relations:

Megan Fielding

Vice President, Brand & Culture Communications

(403) 797-3015

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 SantaClara.com & California Media Partners, LLC. All rights reserved.