Potash Corp cuts back production, plans layoffs
SASKATOON — Potash Corp of Saskatchewan Inc. plans to slash production and permanently close a New Brunswick mine ahead of schedule, the company said Thursday as it reported a drop in quarterly profits, sales and financial guidance.
The company said the fertilizer market has been weaker than expected in the second half of this year and it’s taking measures to reduce inventory and output. PotashCorp CEO Jochen Tilk said the company is focused on striking the right balance between flexibility and cost.
“We have some of the best, most efficient potash assets in the world and we continue to take steps to even further improve efficiencies and lower our costs,” he told a conference call with analysts.
Tilk noted cuts the company made in 2013 when it took out 3.5 million tonnes in potash production capacity.
The company said it will permanently close its Penobsquis mine in New Brunswick at the end of next month, instead of next year, affecting 140 contract workers employed by Vic Progressive Diamond Drilling.
PotashCorp is also planning three-week temporary shutdowns at three of its mines in Saskatchewan in December as part of the plan to reduce production by 500,000 tonnes in the fourth quarter.
The earlier closure of the Penobsquis mine, with 800,000 tonnes of capacity, will allow the company to focus on ramping up production at Picadilly, a newer and lower-cost mine in the province.
New Brunswick Premier Brian Gallant said the closure had been planned, but that didn’t make it any easier for those affected.
In its financial report for the three months ended Sept. 30, PotashCorp said its net income dropped to US$282 million or 34 cents per share from US$317 million or 38 cents per share in the third quarter of 2014.
Revenue from sales of potash, nitrogen and phosphates and related fertilizer products or services fell to US$1.53 billion from US$1.64 billion.
In its outlook, the company said it now expects earnings for the full year of $1.55 to $1.65 per share, down from earlier expectations for between $1.75 and $1.95.