Net income at the company during the second quarter ended June 30 was $565 million, equal to $4.08 per share on the common stock, down nearly 17% from $675 million, or $4.71 per share, in the same period a year ago. Sales for the quarter fell to $6.415 billion from $6.992 billion. The company attributed the decline in earnings and sales primarily to weakness in global nutrient prices.
Despite the lower results, company executives in the Aug. 4 conference call spoke positively about a number of initiatives in place, especially as they pertain to the company’s retail growth plans.
“The total acquisitions this year are expected to total well over $500 million in annual sales,” said Steve Douglas, chief financial officer. “We are on a record pace this year in terms of retail tuck-ins, adding 33 sites in the U.S. and Canada with combined expected sales of over $230 million. In addition to these completed transactions, we have a couple other slightly larger deals that we have signed but not yet completed, including the recently announced Cargill acquisition. These other acquisitions are expected to add an additional estimated $300 million of sales and more than 30 locations. We expect this strong deal flow to continue, as we execute our strategy of growing in North America and retail business.”
In addition to the acquisitions, Douglas said one of Agrium’s pillars of its strategy is to invest approximately $250 million in technology and innovation over the next five years. Doing so will ensure the company continues to solidify its position as a leading global provider of crop input products and solutions, he said.
“In this regard, we recently announced a $15 million investment in Finistere, a venture fund focused on identifying and investing in world-class agriculture technologies across early to growth stage companies within the areas of plant nutrition, biologicals, seed technology, digital agriculture and novel farm systems,” Douglas said. “Through this investment, Agrium will join a core of leading strategic investors and Finistere across the agriculture, farming and food industries, which will provide access to unique collaboration and partnership opportunities. We see this investment as playing an important role in supporting Agrium's innovation and technology strategy, creating opportunities for new products and services for growers and generating future earnings growth for shareholders.”
For the six months ended June 30, net income was $568 million, or $4.09 per share, which compared with $689 million, or $4.78 per share, in the same period a year ago. Sales for the six months totaled $9.140 billion, down from $9.864 billion.