The Potash Corporation of Saskatchewan reported profits rising faster than expected, thanks to rising potash sales volumes, and the miner expects demand for the crop nutrient to continue growing next year.
PotashCorp lifted its forecast for full year profit by 10 cents a share, to 45-65 cents a share, citing an upgrade to its sales prospect, and to its profit margins.
The company raised the lower end of its estimate for 2017 potash sales, leaving the range at 8.9m to 9.4m tonnes, compared to an earlier forecast of 8.7m to 9.4m tonnes.
"Potash market fundamentals continued to improve in the first quarter, creating a supportive earnings environment," said PotashCorp President and Chief Executive Officer Jochen Tilk.
"We expect improved consumption trends and nutrient affordability in key markets to support potash demand and our results through the remainder of 2017."
PotashCorp continues to expect "strong demand" for potash in 2016, maintaining a forecast for global potash shipments of 61-64m tonnes in 2017, up from about 60m tonnes in 2016.
"In North America, we believe fertilizer affordability and the need to replenish soil nutrients following 2016's record harvest will contribute to healthy demand at the farm level," the company said, maintain expectations of total potash demand of 9.3 to 9.8m tonnes.
The company also maintained its Chinese demand forecast at 14.4 to 15.5m tonnes, citing "healthy consumption levels driven by attractive crop prices and strong affordability relative to other nutrients".
Demand ideas in both the Latin America, and in Asia excluding China and India, were raised.
The forecast for shipments in both areas were raised by 0.2m tonnes, to 11.7-12.2m tonnes and 9/0-9.5m tonnes respectively.
But the company trimmed its forecast for Indian shipments by 0.4m tonnes, to 3.8-43m tonnes, ""due to recent potash subsidy changes that are expected to result in higher retail prices for farmers".
PotashCorp's net earnings rose 99% year-on-year, to $149m, in the months to March 31, thanks to rising potash volumes.
This equates to 18 cents per share, in ahead of analysts' estimates at 11 cents a share.
But total revenue fell 8% to $1.11bn, due to lower phosphate prices, and continued supressed potash prices.
Revenues were ahead of analyst expectations of $1.06bn.
The company remains confident that a merger of equals with the US fertilizer group Agrium will be completed by the middle of this year.
By William Clarke