PotashCorp’s (POT) nitrogen segment contributes about 30% towards the company’s revenue and 32% towards the company’s gross margins. This segment experienced an 18% fall in revenue to $460 million from $562 million in 3Q14.
Decline in shipments
- Nitrogen shipments fell to 1.4 million metric tons from 1.5 million metric tons in the corresponding quarter last year.
- During the quarter, PotashCorp experienced lost production as a result of technical issues at its plants.
- Most lost production was a result of a plant shutdown in Lima, which was done to add 100,000 tons of ammonia capacity.
- Weakness in the nitrogen segment may also suggest that farmers are delaying their purchases as several countries have experienced weaker currencies compared with the dollar. For example, China devalued its currency during 3Q15, which puts pressure on affordability.