PotashCorp slashes dividend on weak sales

SASKATOON— Canada’s largest potash producer is cutting its dividend by 34 per cent in response to weaker sales volumes and lower global fertilizer prices.

The announcement was included with the latest financial report from Potash Corporation of Saskatchewan, which saw its fourth-quarter profit cut in half as a result of weak market conditions.

The Saskatoon-based company’s net income, reported in U.S. dollars, dropped to $201 million, or 24 cents per share, from $407 million, or 49 cents per share, in the fourth quarter of 2014.

The value of its sales dropped to $1.35 billion in the fourth quarter of 2015 from $1.9 billion a year earlier.

The fourth-quarter profit was six cents below the consensus estimate of 30 cents per share and revenue was $65 million below the estimate of $1.42 billion, according to analyst data compiled by Thomson Reuters.

During the quarter, PotashCorp declared dividends worth 38 cents per share but the payout to shareholders will fall to 25 cents per share with the May quarterly payment.

The company recently announced the closure of its new potash mine in New Brunswick, resulting in the loss of up to 430 jobs.

PotashCorp said Thursday it estimates its first-quarter results will include $35 million in severance and transition costs related to the closure of the Picadilly mining operation near Sussex, N.B. The company is forecasting its 2016 earnings will amount to between 90 cents and $1.20 per share. That’s down from $1.52 per share in 2015 and $1.82 per share in 2014.