While the Alberta flood might just be one of Canada's most
expensive natural disasters, leading fertilizer company
CF Industries Holdings, Inc
) had on Jun 21 temporarily shut its nitrogen fertilizer complex
at Medicine Hat, Alberta, Canada as a precautionary measure.
Medicine Hat is Canada's largest nitrogen fertilizer complex.
It produces anhydrous ammonia and urea. The complex ships
approximately 1.5 million tons of fertilizer each year by rail
and truck, serving northern tier U.S. Corn Belt states and
western Canadian markets.
The Alberta complex is nearly 200 feet above the normal river
level. However, the pump house, which draws river water for
plant's operations, is near the bank of River South Saskatchewan
and within the area that is threatened by high water levels.
CF Industries' decision to temporarily halt productions is to
protect the plant and the equipments in the pump house. CF
Industries will inform its customers about when the company plans
to re-start productions and deliveries from the plant.
CF Industries, which is among the prominent players in the
fertilizer industry along with
Potash Corp of Sakatchewan Inc.
CVR Partners, LP
), posted its first-quarter 2013 results on May 8. The company's
adjusted earnings for the first quarter beat the Zacks Consensus
Estimate. However, revenues fell at a double-digit clip on
declines across nitrogen and phosphate businesses and missed
expectations. CF Industries is optimistic about the second
quarter based on higher grain prices.
CF Industries is benefiting from high global prices for
commodities, declining natural gas costs in North America and a
solid start to the domestic planting season. Moreover, the
company has a strong cash flow profile, which allows it to return
value to shareholders and invest in growth initiatives.
However, CF Industries faces intense pricing competition from
both domestic and foreign fertilizer producers. It is also
susceptible to cyclical and seasonal changes. Moreover, the
prices of its products are highly sensitive to demand and supply.
CF Industries is also exposed to volatility in raw material costs
and has significant debt.
CF Industries currently retains a short-term Zacks Rank #3
AGRIUM INC (AGU): Free Stock Analysis Report
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CVR PARTNERS LP (UAN): Free Stock Analysis
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