Nutrien names insider Mark Thompson as CFO as potash market wobbles

Nutrien (TSX: NTR; NYSE: NTR), the world’s biggest fertilizer producer, has appointed a new chief financial officer amid an industry downturn that has dented profits.

Mark Thompson, who has been with Nutrien for 13 years and currently serves as chief commercial officer, will assume his new role on Aug. 26. He is set to replace Pedro Farah, who will remain with the company in an advisory capacity until the end of the year, Nutrien said.

Since last April, at least eight senior executives or managers have been let go or have resigned from the company. This exodus included members of Brazil’s entire supply management team, as well as the chief executive officer and CFO for Latin America.

The company started its Brazilian expansion soon after its 2018 formation through the merger of Potash Corp of Saskatchewan and Agrium, which had one small fertilizer maker in Sao Paulo state.

By 2022, the company operated in 13 Brazilian states and had about 200 commercial units in Latin America, a region in which it has been present for over 25 years.

This year, however, the potash and other fertilizers producer revealed it may sell its retail operations in Argentina, Chile and Uruguay in order to focus on Brazil and other key markets.

Nutrien’s challenges in South America surfaced as fertilizer companies grappled with volatility in global markets, following Russia’s invasion of Ukraine in 2022. The geopolitical change caused prices to soar, only for them to then collapse the following year as farmers postponed purchases and global supplies stabilized.

The crop nutrient giant’s second quarter results presented a mixed bag, with net earnings of US$392 million, down from US$448 million in the same period last year. 

Sales reached US$10.2 billion, a decrease from the US$11.7 billion fetched in the second quarter of 2023. Diluted earnings per share came at US78¢, down from US89¢ a year earlier.

Its adjusted earnings beat analysts’ estimates of US$2.21 per share, reaching US$2.34 per share for the quarter ended June 30.

Nutrien attributed the result to strong potash sales volumes, which climbed to 3.6 million tonnes during the quarter, compared with 3.4 million tonnes in the same quarter of 2023.

The Saskatoon-based firm said in July that fertilizer demand was just beginning to stabilize after the dramatic upheavals of the past few years, but expected better market conditions have yet to materialize.

“Though crop price fundamentals aren’t great, patient investors might wait for the realization that nitrogen fundamentals are outperforming crop prices (because of strong energy price differentials), and potash demand is accelerating (as well, potash prices seem trough-y now),” BMO fertilizers and chemicals analyst, Joel Jackson, wrote in a note to investors.

Shares in Nutrien were slightly down in New York on Thursday in pre-market trading, changing hands at US$46.57 — 1.1% lower than their closing price on Wednesday. The crop nutrients giant has a current market capitalization of $32 billion (US$23.2 billion).