Nutrien (NTR) Q2 FY25 earnings call: guidance and Q&A

Clarification on whether potash market strength is supply or demand-driven, especially regarding FSU supply, and the outlook for 2026.

Management confirmed strong demand, with global potash shipments forecast at 73-75 million tonnes for 2025, testing supply chains. They see no material change in FSU tonnes and expect continued strength into 2026 due to affordable potash, low inventories, and nutrient removal from large crops.

“So we don't see any material change in FSU tonnes coming to the potash market. At the intersection of those things, we see the strengthening that we've seen in the potash price.”

asked by Chris Parkinson · answered by Kenneth Seitz

Inquiring if North America fall demand is primarily weather-dependent and the confidence level for Brazil Retail to return to positive EBITDA in 2026.

Management affirmed that an open application season (weather) is the biggest determinant for a decent fall in North America, expecting 5% higher fertilizer volumes. For Brazil, the improvement plan is on track, aiming for breakeven/positive EBITDA in 2025 and continued positive trends into 2026, driven by operational changes.

“But that's dependent on weather exactly as you said -- we're expecting fertilizer volumes to be up 5% from last year. You may recall that we had a compressed application season last year.”

asked by Joel Jackson · answered by Kenneth Seitz

Assessing risks to segments in 2026 if corn/soy prices remain low, particularly for potash given its 'lower ranked' input perception.

Management expressed a constructive outlook for 2026 across all nutrients. They highlighted ongoing strength in potash demand (China, Southeast Asia, Brazil, North America) and supply-side challenges. Nitrogen and phosphate also face supply issues, supporting prices. Potash's affordability drives record consumption, and volumes are moving well.

“On the demand side of the equation, we see strength. And then on the supply side, I won't call it a challenge, but we have seen project delays, and we have seen the ability of the market to meet these demand levels.”

asked by Ben Isaacson · answered by Kenneth Seitz

Questioning Nutrien's incremental capacity plans for potash production in 2026, given anticipated industry shipment growth.

Nutrien plans to grow with the market and maintain market share in 2026. With 15 million tonnes of installed capacity, they have the flexibility to bring on operators to liberate tonnes as demand grows, leveraging their 6-mine network and supply chain investments.

“That will be the same philosophy for next year, where you can expect that as the market grows and we've talked about this 2.5% average annual growth rates on trend, which is where we are today, that we will grow with the market and maintain market share.”

asked by Vincent Andrews · answered by Kenneth Seitz

Inquiring about the flat gross profits per tonne in North American crop nutrients and the progress on Retail gross margins versus SG&A cost cutting.

Management is pleased with cost progress but acknowledges more work on margins. Crop protection margins were better than anticipated. Global fertilizer margins were flat year-over-year, impacted by strategic decisions in Brazil to lower tonnage and shift marketing. They aim to expand margins by getting more nutritionals into the mix and continuously working across all crop input segments.

“If I look at our margins on fertilizer, if you look at it from a global basis, we are flat year-over-year. And that takes -- you got to take into effect that we strategically made decisions in Brazil to lower our tonnage there and go to a different marketing -- direct marketing concept versus going through those blenders that we've mentioned several times that we idled.”

asked by Jeff Zekauskas · answered by Jeffrey Tarsi

Questioning a perceived slowdown in share repurchases despite improved free cash flow, and how it fits with overall capital allocation.

Management clarified there is no slowdown, maintaining a consistent share repurchase pace of approximately $45 million per month, which they view as sustainable and balanced. This is part of a broader capital allocation strategy focused on growing cash, optimizing working capital, shedding noncore assets, and providing a stable, growing dividend.

“We've been buying at about a sort of $45 million per month level. And I think for the balance of the year, that's a good way to think about it as we -- as the year has unfolded for us and certainly as we continue to be quite constructive on how it's unfolding.”

asked by Ben Theurer · answered by Kenneth Seitz