Strong Fertilizer Prices Sustain Revenues, and Profits Begin to Rise |
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By: Integer Research Ltd Posted: 2007-06-23 13:57:46 |
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The latest quarterly financials show fertilizer producer revenues remain buoyant in line with robust product prices. This is according to Integer Research's latest publication, the Fertilizer Financial Bulletin, which provides quarterly financial data for the world's 70 largest fertilizer companies and divisions.
"Of 51 companies and segments reporting revenues in the fourth quarter of 2006, all but seven of them saw revenues rise," says Integer Research Director, Oliver Hatfield. "The increase was significant for phosphates producers as higher phosphates prices began to feed in to company results." All eight phosphates companies or segments reported revenues up in Q4 2006, with Lifosa's sales rising 29% year on year, and CF Industries Phosphate revenues by 16%. Phosphates continue at recent record levels, and phosphate profit margins are likely to rise in the near term. "The five biggest global producers reported higher sales, and profits are beginning to move in line," says Integer Research Analyst, Andrea Valentini. "The combined operating profit of three companies reporting in Q1 2007, PotashCorp, Yara and Mosaic, was US$512 million. This outweighed the total for all five companies which reported in the previous quarter. "As the Financial Bulletin shows, the overall industry profitability has generally improved in the most recent reporting periods. Of 46 producers reporting operating profit in Q4 2006, twenty eight reported an increase compared to the same period a year ago," continues Valentini. "The overall industry profitability has improved, but this is not the case for all the fertilizer producing regions, particularly in North America and Central Europe," says Hatfield. "Of the nine North American producers reporting operating profit, five reported a year on year drop. In Central Europe, four out of the five producers reported operating profits lower than the same period a year ago, and three recorded an operating loss. Profit margins for producers in the Former USSR declined in the middle of 2006 after a recent 2005 peak. This stems from higher production costs, particularly in Ukraine." Integer Research Integer Research is the leading supplier of market analysis, forecasts and strategy consultancy to the fertilizer industry. Integer uses its team of engineers, economists and analysts to offer tailored consultancy services, regular reports and financial profile services. |
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