Nutrien(NTR) - 2023 Q4 - Annual Report

Financial Performance - Nutrien reported fourth quarter 2023 net earnings of $176 million ($0.35 diluted net earnings per share) and adjusted EBITDA of $1.1 billion[3]. - For the full year 2023, Nutrien generated net earnings of$1.3 billion ($2.53 diluted net earnings per share) and adjusted EBITDA of$6.1 billion, both down from record levels in 2022[7]. - Adjusted EBITDA for the full year 2023 decreased by 36% to $1,459 million, primarily due to lower gross margins for crop nutrients and crop protection products[23]. - Net earnings for Q4 2023 were$176 million, a significant drop from $1,118 million in Q4 2022, reflecting a decline of 84$2,206 million, down from $7,124 million in 2022, with diluted earnings per share of$4.44 versus $13.19[75]. - The company reported a comprehensive income of$1,363 million for the twelve months ended December 31, 2023, down from $7,510 million in 2022[104]. - Adjusted EBITDA for the three months ended December 31, 2023, was$1,075 million, compared to $2,095 million in the same period of 2022, a decrease of about 48$1.5 billion, a decrease attributed to lower gross margins for crop nutrients and crop protection products[7]. - Total sales for the twelve months ended December 31, 2023, were $29,056 million, a decrease of 23.2$37,884 million in 2022[103]. - Net sales for the twelve months ended December 31, 2023, were $28,082 million, down from$37,012 million in 2022, reflecting a decline of 24.0%[120]. - Sales volumes for nitrogen products were higher in Q4 2023, driven by increased UAN production, despite lower ammonia availability[37]. - Retail sales for crop nutrients decreased by 22% to $1,808 million in Q4 2023 compared to$2,320 million in Q4 2022, with gross margin declining from 19% to 15%[20]. - Crop protection products sales fell by 2% to $960 million in Q4 2023, with gross margin decreasing from 42$5,664 million, down from $7,533 million in the same period of 2022, a decrease of approximately 25$1.65 billion and $1.85 billion, assuming increased gross margins across major product lines[10]. - Potash sales volume guidance for 2024 is projected between 13.0 and 13.8 million tonnes, reflecting demand growth in offshore markets[16]. - Nitrogen sales volume guidance for 2024 is estimated between 10.6 and 11.2 million tonnes, with expectations of higher operating rates at US and Trinidad plants[16]. - Global potash demand is expected to recover towards trend levels in 2024, with full-year shipments projected between 68 to 71 million tonnes[11]. - Nutrien anticipates a tight nitrogen supply and demand balance in 2024, with net imports down approximately 55$774 million in 2023, primarily related to Retail – South America goodwill and Nitrogen and Phosphate property, plant, and equipment[18]. - The company recognized a $465 million non-cash impairment related to goodwill of South American Retail assets in 2023[25]. - A non-cash impairment of$76 million was recognized for Trinidad property, plant, and equipment in Q4 2023 due to higher expected natural gas costs[37]. - The ammonia controllable cash cost of product manufactured per tonne increased in 2023, primarily due to lower ammonia production[37]. Expenses and Costs Management - Selling expenses increased by 40% to $7 million in Q4 2023 compared to$5 million in Q4 2022[42]. - General and administrative expenses rose by 5% to $104 million in Q4 2023, and by 12$364 million for the full year 2023[42][45]. - Finance costs increased by 13% to $213 million in Q4 2023 and by 41$793 million for the full year 2023[44][46]. - The effective tax rate on adjusted earnings for 2023 was 34%, up from 25% in 2022[44][46]. - Other expenses surged by 140% to $161 million in Q4 2023, driven by higher asset retirement obligations and foreign exchange losses[42][45]. Shareholder Returns - Nutrien returned$2.1 billion to shareholders in 2023 through dividends and share repurchases, with a quarterly dividend increase to $0.54 per share[7]. - The company repurchased 13,378,189 shares at a cost of$374 million during 2023[117]. - A dividend per share of $0.53 was declared for Q4 2023, an increase from$0.48 in 2022, with a total estimated dividend payment of $265[140]. Production and Operational Efficiency - Natural gas costs per MMBtu decreased by 55$3.30 from $7.44 in Q4 2022, contributing to lower production costs[35]. - Ammonia production adjusted operating rate improved to 91% in Q4 2023 from 83% in Q4 2022, indicating better production efficiency[62]. - Retail cash operating coverage ratio improved to 68% in 2023 from 55% in 2022, reflecting stronger cash flow management[58]. - The company plans to focus on operational efficiency and cost management in the upcoming year to improve margins and profitability[79].