Thanks to stronger demand for potash and higher nitrogen prices,
Net earnings in the three months ended June 30 topped US$60.1 million (or $1.15 per share) on revenue of US$560.8 million, compared with US$61.8 million ($1.14 per share) on US$564.5 million in the corresponding period of 1999.
Operating income between the periods rose to US$97.2 million from US$96.3 million, but cash flow dropped to US$119 million from US$132.6 million.
For the six months ended June 30, net earnings were US$131.75 million on US$1.2 billion, comparable to the year-ago period. (Excluding a non-recurring expense, earnings in the recent period were actually 7% higher.)
Operating income was 20% higher, at $203.8 million, whereas cash flow was 7% higher, at $233 million.
During the first six months of this year, PCS cranked out a record 4.4 million tonnes of potash and sold a record 4.2 million tonnes. Stronger offshore demand caused the increase.
Nitrogen prices increased 33% quarter-over-quarter, which, when combined with US$15.3 million in hedging gains, pushed divisional income to positive US$22.1 million from negative US$15.3 million in the first half of 1999. The improved prices are attributed to temporary shutdowns and tight supply.
On the downside, operating earnings in the phosphate division slipped 37% to US$56.2 million in the first six months of 2000. Much of this occurred in the second quarter, when planned production cutbacks kicked in. Accordingly, unit costs of sales rose; however, they are expected to settle in the final half of the year, owing to the elimination of 224 positions.
On June 30, PCS had negative US$118.2 million in working capital, and its debt-to-capital ratio stood at 31.1%, down from the start of the year.
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