First-quarter earnings for Potash Corp. of Saskatchewan (TSE) are down 30% to $8 million (21 cents per share) compared with $11.4 million (29 cents per share) in the first quarter of 1992.
Revenues were up, however, rising 7.6% to $94.6 million in the latest quarter compared with $88 million in the same period a year ago. The decline in earnings is largely due to foreign exchange translation losses, whereas gains were experienced in the exchange market during the previous year. Contributing to poor results were shutdowns to control inventory and a $1-million capital tax levied by the Saskatchewan government. Both offshore and at home, Potash Corp. has difficulties. In the Canadian and U.S. markets, prices for the mineral are declining although demand remains strong. Meanwhile, producers in Russia are selling more potash to generate hard-currency sales.
In spite of these problems and the possibility of class-action suits (alleging price-fixing) being prepared in the U.S., President C.E. Childers says “volume-wise, we are off to our best start in the last five years.”
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