Nutrien Reports Third Quarter 2024 Results

Posted on November 6th, 2024 | Filed under Press Releases

Nine-month results supported by record Potash sales volumes, lower Potash operating costs and higher Retail product margins in North America.
Commenced share repurchases late in the third quarter and have continued activity in the fourth quarter.

All amounts are in US dollars, except as otherwise noted

SASKATOON, Saskatchewan–(BUSINESS WIRE)–Nutrien Ltd. (TSX and NYSE: NTR) announced today its third quarter 2024 results, with net earnings of $25 million ($0.04 diluted net earnings per share). Third quarter 2024 adjusted EBITDA¹ was $1.0 billion and adjusted net earnings per share¹ was $0.39.

“Nutrien delivered higher Potash sales volumes and lower operating costs through the first nine months of 2024, utilizing the strengths of our six-mine network and global distribution capabilities to respond to increased customer demand. We are seeing strong crop nutrient demand in North America for the fall application season following a period of lower field activity in the third quarter,” commented Ken Seitz, Nutrien’s President and CEO.

“We remain focused on strategic priorities that strengthen the advantages of our business across the ag value chain. This includes accelerating the timeline for achieving our annual consolidated cost savings target, further optimizing capital expenditures, delivering upstream fertilizer sales volume growth and advancing high-return downstream Retail growth opportunities. These initiatives provide a pathway for delivering structural improvements to our earnings and free cash flow through the cycle,” added Mr. Seitz.

Highlights²:

Generated net earnings of $582 million and adjusted EBITDA of $4.3 billion in the first nine months of 2024.

Retail adjusted EBITDA increased to $1.4 billion in the first nine months of 2024 supported by higher product margins in North America. Lowered full-year 2024 Retail adjusted EBITDA guidance to $1.5 to $1.6 billion as favorable growing conditions in North America resulted in reduced pest pressure and lower field activity in the third quarter.

Potash adjusted EBITDA decreased to $1.6 billion in the first nine months of 2024 due to lower net selling prices, partially offset by record sales volumes of 11.1 million tonnes. Raised full-year 2024 Potash sales volumes guidance to 13.5 to 13.9 million tonnes due to the continued strength of global demand.

Nitrogen adjusted EBITDA decreased to $1.4 billion in the first nine months of 2024 as lower net selling prices more than offset lower natural gas costs and higher sales volumes. Total ammonia production increased in the first nine months of 2024, driven by improved natural gas utilization and reliability at our operations in Trinidad.

Accelerated operational efficiency and cost savings initiatives and expect to achieve approximately $200 million of annual consolidated savings by 2025, ahead of our initial target of 2026.

Maintained total capital expenditures guidance of $2.2 to $2.3 billion for 2024 and expect capital expenditures in a range of $2.0 to $2.1 billion in 2025 to sustain our assets and deliver on our growth initiatives.

Repurchased 1.5 million shares for a total of approximately $75 million in the second half of 2024 as of November 5, 2024.

This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.
Our discussion of highlights set out on this page is a comparison of the results for the three and nine months ended September 30, 2024 to the results for the three and nine months ended September 30, 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 November 6, 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 (“annual 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 and nine months ended September 30, 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

Favorable growing conditions in the US have supported expectations for record US corn and soybean yields and significant soil nutrient removal in 2024. Prospective crop margins have declined compared to the historically high levels in recent years, however we believe most growers in the US Midwest remain in a healthy financial position. Global grain stocks remain below historical average levels, supporting export demand for North American crops and firm prices for key agriculture commodities such as rice, sugar and palm oil.

Fertilizer demand in North America for the fall application season has been supported by a relatively early harvest and the need to replenish soil nutrients, following a period of lower field activity in the third quarter.

Soybean planting in Brazil was delayed by dryness; however, the pace of planting picked up in the second half of October and soybean crop area is expected to increase by one to three percent. Brazilian fertilizer demand is projected to be approximately 46 million tonnes in 2024, in line with historical record levels.

Australian growing conditions for winter crops have been favorable with timely rains received in key areas, supporting crop production prospects and expected grower returns.

Crop Nutrient Markets

We raised our 2024 global potash shipment forecast to 70 to 72 million tonnes primarily driven by stronger expected demand in Brazil and Southeast Asia. We believe the increase in global shipments in 2024 has been driven by an underlying increase in consumption in key markets.

We forecast global potash shipments between 71 and 74 million tonnes in 2025 supported by the need to replenish soil nutrient levels and the relative affordability of potash. We anticipate limited new capacity in 2025 and the potential for incremental supply tightness with demand growth.

Global ammonia prices have been supported by supply outages, project delays and higher European natural gas values. Chinese urea export restrictions, production challenges from major exporters and strong demand from India and Brazil have tightened the global urea market. US nitrogen inventory was estimated to be well below average levels at the end of the third quarter, which we expect will support demand in the fourth quarter of 2024 and early 2025.

Global phosphate markets remain tight supported by Chinese export restrictions and production outages in the US. We anticipate some impact on global demand due to tight supply and weaker affordability relative to potash and nitrogen.

Financial and Operational Guidance

Retail adjusted EBITDA guidance was lowered to $1.5 to $1.6 billion as favorable growing conditions in North America resulted in reduced pest pressure and lower field activity in the third quarter.

Potash sales volume guidance was raised to 13.5 to 13.9 million tonnes due to the continued strength of global demand. The range reflects our scheduled maintenance downtime in the fourth quarter and the assumption of a relatively short duration labor disruption at the Port of Vancouver.

Nitrogen sales volume guidance was lowered to 10.6 to 10.8 million tonnes due to extended turnarounds and unplanned outages in the third quarter, including the impact of weather-related events.

Phosphate sales volume guidance was lowered to 2.4 to 2.5 million tonnes due to weather-related production impacts in the second half of 2024.

Effective tax rate on adjusted net earnings guidance was lowered primarily due to a change in 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
	November 6, 2024		August 7, 2024
(billions of US dollars, except as otherwise noted)	Low	High	Low	High
Retail adjusted EBITDA	1.5	1.6	1.5	1.7
Potash sales volumes (million tonnes) ²	13.5	13.9	13.2	13.8
Nitrogen sales volumes (million tonnes) ²	10.6	10.8	10.7	11.1
Phosphate sales volumes (million tonnes) ²	2.4	2.5	2.5	2.6
Depreciation and amortization	2.30	2.35	2.2	2.3
Finance costs	0.70	0.75	0.7	0.8
Effective tax rate on adjusted net earnings (%) ³	21.5	22.5	23.0	25.0
Capital expenditures⁴	2.2	2.3	2.2	2.3
1 See the “Forward-Looking Statements” section.
2 Manufactured product only.
3 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.
4 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 September 30			Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)	2024	2023	% Change	2024	2023	% Change
Sales	5,348	5,631	(5)	20,893	23,392	(11)
Gross margin	1,500	1,627	(8)	5,949	6,706	(11)
Expenses	1,304	1,242	5	4,490	4,254	6
Net earnings	25	82	(70)	582	1,106	(47)
Adjusted EBITDA ¹	1,010	1,084	(7)	4,300	4,983	(14)
Diluted net earnings per share	0.04	0.15	(73)	1.13	2.18	(48)
Adjusted net earnings per share ¹	0.39	0.35	11	3.18	4.01	(21)
1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

Net earnings and adjusted EBITDA decreased in the third quarter of 2024 compared to the same period in 2023, primarily due to lower Potash net selling prices and Retail earnings, partially offset by higher Nitrogen net selling prices and record Potash sales volumes. Net earnings were impacted over the same period due to higher expense for asset retirement obligations at non-operating sites. For the first nine months of the year, net earnings and adjusted EBITDA decreased due to lower fertilizer net selling prices, partially offset by increased Retail earnings, higher Potash sales volumes and lower natural gas costs. Net earnings were also impacted over the same period due to a loss on foreign currency derivatives.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three and nine months ended September 30, 2024 to the results for the three and nine months ended September 30, 2023, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)

	Three Months Ended September 30			Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)	2024	2023	% Change	2024	2023	% Change
Sales	3,271	3,490	(6)	14,653	16,040	(9)
Cost of goods sold	2,412	2,595	(7)	11,018	12,599	(13)
Gross margin	859	895	(4)	3,635	3,441	6
Adjusted EBITDA ¹	151	197	(23)	1,356	1,230	10
1 See Note 2 to the interim financial statements.

Retail adjusted EBITDA decreased in the third quarter of 2024 due primarily to lower crop nutrient sales volumes in North America and lower seed margins in Brazil. Adjusted EBITDA for the first nine months increased, supported by higher product margins in North America.

	Three Months Ended September 30				Nine Months Ended September 30
	Sales		Gross Margin		Sales		Gross Margin
(millions of US dollars)	2024	2023	2024	2023	2024	2023	2024	2023
Crop nutrients	1,093	1,250	210	262	5,683	6,571	1,150	1,032
Crop protection products	1,518	1,566	360	339	5,365	5,790	1,271	1,220
Seed	132	158	24	54	2,051	2,093	379	391
Services and other	242	235	164	150	690	691	528	522
Merchandise	222	231	37	40	667	750	110	131
Nutrien Financial	85	73	85	73	284	252	284	252
Nutrien Financial elimination ¹	(21)	(23)	(21)	(23)	(87)	(107)	(87)	(107)
Total	3,271	3,490	859	895	14,653	16,040	3,635	3,441
1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.

Crop nutrients sales decreased in the third quarter and first nine months of 2024 due to lower sales volumes and selling prices. Gross margin decreased in the third quarter due to reduced field activity in North America that contributed to lower sales volumes and lower international per-tonne margins compared to the historically high levels in the same period last year that were supported by foreign exchange benefits in Argentina. For the first nine months, gross margin increased due to higher per-tonne margins, including growth in our proprietary crop nutritional and biostimulant product lines.

Crop protection products sales were lower in the third quarter and first nine months of 2024 primarily due to lower selling prices and favorable growing conditions that resulted in reduced pest pressure and lower field activity. Gross margin for the third quarter and first nine months of 2024 were supported by the timing of supplier programs and the selling through of lower cost inventory compared to the same periods in 2023.

Seed sales and gross margin decreased in the third quarter and first nine months of 2024 mainly due to the impact of dry weather and delayed planting on our proprietary seed business in Brazil.

Nutrien Financial sales and gross margin increased in the third quarter and first nine months of 2024 due to higher financing rates offered.

Supplemental Data	Three Months Ended September 30				Nine Months Ended September 30
	Gross Margin		% of Product Line ¹		Gross Margin		% of Product Line ¹
(millions of US dollars, except as otherwise noted)	2024	2023	2024	2023	2024	2023	2024	2023
Proprietary products
Crop nutrients	71	79	38	31	361	347	31	34
Crop protection products	119	107	32	31	429	434	34	36
Seed	4	28	22	54	148	171	39	44
Merchandise	4	2	11	6	11	8	10	7
Total	198	216	24	24	949	960	26	28
1 Represents percentage of proprietary product margins over total product line gross margin.

	Three Months Ended September 30				Nine Months Ended September 30
	Sales Volumes (tonnes – thousands)		Gross Margin / Tonne (US dollars)		Sales Volumes (tonnes – thousands)		Gross Margin / Tonne (US dollars)
	2024	2023	2024	2023	2024	2023	2024	2023
Crop nutrients
North America	931	1,118	165	165	6,693	6,912	147	130
International	956	880	59	88	2,999	2,857	56	47
Total	1,887	1,998	111	131	9,692	9,769	119	106


(percentages)	September 30, 2024	December 31, 2023
Financial performance measures ^{1, 2}
Cash operating coverage ratio	66	68
Adjusted average working capital to sales	20	19
Adjusted average working capital to sales excluding Nutrien Financial	–	1
Nutrien Financial adjusted net interest margin	5.3	5.2
1 Rolling four quarters.
2 These are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section.

Potash

	Three Months Ended September 30			Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)	2024	2023	% Change	2024	2023	% Change
Net sales	884	972	(9)	2,453	2,983	(18)
Cost of goods sold	422	389	8	1,139	1,047	9
Gross margin	462	583	(21)	1,314	1,936	(32)
Adjusted EBITDA ¹	555	611	(9)	1,557	1,941	(20)
1 See Note 2 to the interim financial statements.

Potash adjusted EBITDA decreased in the third quarter and first nine months of 2024 due to lower net selling prices, partially offset by record sales volumes. Higher potash production and the continued advancement of mine automation contributed to our lower controllable cash cost of product manufactured in the first nine months of 2024.

Manufactured Product	Three Months Ended September 30		Nine Months Ended September 30
($ / tonne, except as otherwise noted)	2024	2023	2024	2023
Sales volumes (tonnes – thousands)
North America	1,733	1,674	3,954	3,754
Offshore	2,419	2,221	7,174	6,159
Total sales volumes	4,152	3,895	11,128	9,913
Net selling price
North America	264	298	287	349
Offshore	177	213	183	271
Average net selling price	213	250	220	301
Cost of goods sold	102	100	102	106
Gross margin	111	150	118	195
Depreciation and amortization	43	34	43	35
Gross margin excluding depreciation and amortization ¹	154	184	161	230
1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

Sales volumes for the third quarter and first nine months of 2024 were the highest on record, supported by low channel inventories and strong potash affordability in North America and key offshore markets.

Net selling price per tonne decreased in the third quarter and first nine months of 2024 due to a decline in benchmark prices compared to the same periods in 2023.

Cost of goods sold per tonne increased in the third quarter of 2024 as higher depreciation more than offset lower royalties and the favorable impact of higher production volumes. For the first nine months of the year, cost of goods sold per tonne decreased mainly due to higher production volumes and lower royalties.

Supplemental Data	Three Months Ended September 30		Nine Months Ended September 30
	2024	2023	2024	2023
Production volumes (tonnes – thousands)	3,696	3,287	10,836	9,612
Potash controllable cash cost of product manufactured per tonne ¹	52	56	52	59
Canpotex sales by market (percentage of sales volumes)
Latin America	46	49	41	47
Other Asian markets ²	27	28	29	28
China	9	10	12	9
India	4	3	5	5
Other markets	14	10	13	11
Total	100	100	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 September 30			Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)	2024	2023	% Change	2024	2023	% Change
Net sales	793	723	10	2,732	3,251	(16)
Cost of goods sold	581	569	2	1,835	2,157	(15)
Gross margin	212	154	38	897	1,094	(18)
Adjusted EBITDA ¹	355	294	21	1,413	1,539	(8)
1 See Note 2 to the interim financial statements.

Nitrogen adjusted EBITDA increased in the third quarter of 2024 primarily due to higher net selling prices. Adjusted EBITDA for the first nine months decreased as lower net selling prices more than offset lower natural gas costs and higher sales volumes. Our total ammonia production was flat for the third quarter and increased in the first nine months of the year supported by improved natural gas utilization and reliability at our operations in Trinidad.

Manufactured Product	Three Months Ended September 30		Nine Months Ended September 30
($ / tonne, except as otherwise noted)	2024	2023	2024	2023
Sales volumes (tonnes – thousands)
Ammonia	567	570	1,782	1,785
Urea and ESN^®	661	687	2,300	2,386
Solutions, nitrates and sulfates	1,227	1,130	3,698	3,518
Total sales volumes	2,455	2,387	7,780	7,689
Net selling price
Ammonia	375	272	395	489
Urea and ESN^®	400	396	427	496
Solutions, nitrates and sulfates	207	205	224	255
Average net selling price	298	276	323	384
Cost of goods sold	215	208	210	239
Gross margin	83	68	113	145
Depreciation and amortization	54	54	54	55
Gross margin excluding depreciation and amortization ¹	137	122	167	200
1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.

Sales volumes were higher in the third quarter and first nine months of 2024 primarily due to higher production and strong demand for solutions, nitrates, and sulfates.

Net selling price per tonne was higher in the third quarter of 2024 primarily due to stronger ammonia benchmark prices. For the first nine months of the year, net selling price per tonne was lower for all major nitrogen products due to weaker benchmark prices in key nitrogen producing regions in the first half of the year.

Cost of goods sold per tonne increased in the third quarter of 2024 mainly due to higher natural gas costs in Trinidad, partially offset by lower natural gas costs in North America. For the first nine months of the year, cost of goods sold per tonne decreased primarily due to lower natural gas costs across all operating regions.

Supplemental Data	Three Months Ended September 30		Nine Months Ended September 30
	2024	2023	2024	2023
Sales volumes (tonnes – thousands)
Fertilizer	1,319	1,305	4,458	4,419
Industrial and feed	1,136	1,082	3,322	3,270
Production volumes (tonnes – thousands)
Ammonia production – total ¹	1,322	1,315	4,157	3,995
Ammonia production – adjusted ^{1, 2}	895	912	2,912	2,880
Ammonia operating rate (%) ²	79	82	87	88
Natural gas costs (US dollars per MMBtu)
Overall natural gas cost excluding realized derivative impact	3.13	2.96	2.98	3.56
Realized derivative impact ³	0.15	(0.01)	0.09	(0.01)
Overall natural gas cost	3.28	2.95	3.07	3.55
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 4 to the interim financial statements.

Phosphate

	Three Months Ended September 30			Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)	2024	2023	% Change	2024	2023	% Change
Net sales	412	444	(7)	1,243	1,460	(15)
Cost of goods sold	383	417	(8)	1,116	1,297	(14)
Gross margin	29	27	7	127	163	(22)
Adjusted EBITDA ¹	89	90	(1)	298	340	(12)
1 See Note 2 to the interim financial statements.

Phosphate adjusted EBITDA was flat in the third quarter of 2024 as higher net selling prices were offset by lower sales volumes and higher input costs. Adjusted EBITDA for the first nine months decreased as lower net selling prices more than offset higher sales volumes and lower costs.

Manufactured Product	Three Months Ended September 30		Nine Months Ended September 30
($ / tonne, except as otherwise noted)	2024	2023	2024	2023
Sales volumes (tonnes – thousands)
Fertilizer	454	519	1,316	1,333
Industrial and feed	168	145	510	465
Total sales volumes	622	664	1,826	1,798
Net selling price
Fertilizer	605	472	611	572
Industrial and feed	797	946	826	1,064
Average net selling price	657	575	671	700
Cost of goods sold	601	528	594	604
Gross margin	56	47	77	96
Depreciation and amortization	121	113	117	118
Gross margin excluding depreciation and amortization ¹	177	160	194	214
1 This is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section.