X
<

Big Fertilizer: Comparing the Major Players' 2Q17 Results

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 5
Big Fertilizer: Comparing the Major Players' 2Q17 Results PART 5 OF 11

Which Fertilizer Giant Had the Best Nitrogen Margin in 2Q17?

Nitrogen margin

As nitrogen fertilizer price realizations for major fertilizer producers (XLB) fell YoY (year-over-year) in 2Q17, it’s not surprising that nitrogen producers’ margins contracted during the same quarter.

Which Fertilizer Giant Had the Best Nitrogen Margin in 2Q17?

Interested in TNH? Don't miss the next report.

Receive e-mail alerts for new research on TNH

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Gross margins by company

The gross margin average for the above five companies in 2Q17 stood at 36%, which shows a significant contraction on a YoY basis from 46% in 2Q16. Terra Nitrogen (TNH) continued to dominate with a high gross margin of 45%, though its margin contracted from 81%.

CVR Partners (UAN) saw a gross margin of 39%, which represents a YoY expansion from 25% in 2Q16. PotashCorp’s (POT) 2Q17 gross margin stood at 36%, contracting on a YoY basis, while Agrium (AGU) reported a gross margin of 31% for its nitrogen segment, also representing a YoY contraction.

CF Industries’ (CF) 2Q17 margin was the lowest at 15%, dropping from 46% in 2Q16.

Why margins contracted

These gross margins contracted in 2Q17 as a result of falling nitrogen prices, but the contraction was worse for producers that had operating costs above the realized selling prices. Some of the above companies lowered their costs to sustain margins, but it wasn’t enough to save them.

In the next part, we’ll move to potash.

X

Please select a profession that best describes you: