Could it be possible there is less demand for potash than the experts predicted? What do stag and bob have to say on the subject while we await the already late delivery of the BFS. What $ per tonne number will be used in the BFS? Something tells me $500 might be a bit lofty.

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Potash Forecast Trails Estimates Amid Plan for More Shutdowns

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, forecast first-quarter profit that trailed analysts’ estimates as it plans additional output cuts to balance supply with demand.

First-quarter profit will be 50 cents to 65 cents a share, the Saskatoon, Saskatchewan-based company said today in a statement. That compares with the 69-cent average of 17 analysts’ estimates compiled by Bloomberg. The company said taxes will be higher in 2013 because of reduced capital expenditure and that it anticipates 17 “shutdown weeks” in the first quarter.

Sales of potash, a nutrient that helps strengthen plant roots and improve resistance to drought, generated 64 percent of the company’s gross profit in 2011, according to data compiled by Bloomberg. Photographer: Geoff Howe/Bloomberg

Fourth-quarter profit excluding a provision for legal costs was 52 cents a share, missing the 57-cent average of 27 estimates.

Potash Corp. announced in October and November the idling of four mines for eight weeks. It’s among producers that have seen export volumes slump in the past year after China and India held off from signing new sales contracts.

Potash Corp.’s “role as the key global swing producer often results in the company bearing a disproportionate amount of the burden when reduced global demand necessitates supply curtailments,” Don Carson, an analyst at Susquehanna International Group LLP in New York, said in a Jan. 28 note.

Fourth-quarter net income dropped to $421 million, or 48 cents a share, from $683 million, or 78 cents, a year earlier. Revenue fell to $1.64 billion from $1.87 billion, less than the $1.79 billion average of 18 estimates.

Potash Corp. and its two biggest North American competitors, Agrium Inc. (AGU) and Mosaic Co. (MOS), said last month they agreed to sell 1 million tons of potash to China for $70 a ton less than the previous accord, which expired at the end of June. No contract has been reached with Indian buyers.

Sales of potash, a nutrient that helps strengthen plant roots and improve resistance to drought, generated 64 percent of the company’s gross profit in 2011, according to data compiled by Bloomberg. The company also produces phosphate- and nitrogen- based fertilizers.

The company said yesterday it increased its quarterly dividend by 33 percent to 28 cents a share from 21 cents.

(Potash scheduled a conference call for 1 p.m. New York time, accessible at +1-877-881-1303.)

To contact the reporter on this story: Christopher Donville in Vancouver at [email protected]