Q3 production was down by 16 percent from Q2 but 31 percent above the previous year. Q3 exports were down by 28 percent from Q2 but were 18 percent higher than last year. Q3 domestic sales were down 23 percent from Q2 and 24 percent lower than last year. Q3 ending inventory was up by 126,000 metric tons from Q2 and is now 15 percent higher than the prior 5 year average.
K+S is current trading for about 24 euros. Maybe it stays at that level or maybe it heads south from there. At 25 euros per share, maybe even I might swing for it.
CF, AGU and MOS were all up a lot more than POT today so I really doubt that there was any "spike" due to the reported rumor. If anything, such news ought to have sent buyers running away from the company instead of towards it. The company was prepared to massively overpay for K+S last time and I doubt whether anything would change next year if the rumor has any legs. POT needs to weather the current market storm without cracking open the piggy bank to buy K+S although I wonder if the latter will still be pushing the notion that the company is worth 50 euros per share. I sure hope so because with volumes and potash prices falling, no deal will ever get done.
Let us hope that the clueless over at POT are not at it again with a yen to acquire K+S unless whatever is offered is pocket change.
The delisting of Uralkali may mean that a combination between Uralkali and OAO UralChem might be in the offing. Uralkali has been repurchasing its shares like mad which is why it is being dropped out of the London Exchange and soon will likely be dropped by even the Moscow Exchange. The Chinese, for example, have liquidated their 12.5 percent interest in Uralkali. But amidst all this stock repurchasing, notice that UralChem, which held 20 percent of Uralkali, is not tendering any of its shares. That datum tells me a lot. If Uralchem and Uralkali become one, the next thing to wonder about is whether Belaruskali will continue to remain an independent potash seller. If, for example, the U.S. concludes that Belaruskali has improperly avoided sanctions against Belarus, potash sales from Belaruskali into the U.S. will be halted. And when that happens, the Europeans will likely follow suit. A development like that would create an incentive for Belaruskali to rejoin Uralkali as a marketing group whether or not UralChem has or has not taken over Uralkali because that would be the only way Belaruskali would not lose some of the market share they otherwise will be locked out of. Of course, this is all 'If,If, If speculation but it is at least interesting to think about what might happen given the facts in front of us.
As for K+S, it will bump along on its own as long as it can.
I have little doubt that part of PAA's problem right now is that hedge funds are not only selling but shorting positions that are either directly or indirectly involved in energy. To the extent that ETFs and other funds in which hedge funds have an interest are holding PAA units, those units are under selling pressure. This is also the time of year when tax loss selling becomes a predominant interest among investors. PAA is likely to be a victim of this propensity as well. When will it end? I doubt that we will see any upsurge during the balance of the year. Some of these pressures will be lessened next year. Whether that will be enough to see PAA's unit price revive though is anybody's guess.
To your point, Vale announced yesterday that they had put on 'hold' their potash mining project at Kronau, Saskatchewan. In their public letter to the local community, they said that although there was a compelling case for a mine in Kronau "someday", market conditions make it difficult to finance the project right now.
After reading Treasury's "Fact Sheet" regarding its augmented rules dealing with inversion transactions that came out yesterday, because a UK holding company is being used, the foreign ownership of the new entity will be ignored for purposed of the 80 percent rule. Consequently, the new UK holding company will be treated as a U.S. company for tax purposes, thereby negating any tax advantage resulting from the transaction. That is not to say that the deal might not be a good deal anyway just that the expected tax savings have now disappeared. Why CF has not yet commented on the implications of this Notice vis a vis its proposed transaction is beyond me. If I can read it and understand what it says, surely they can. As for how this will affect US shareholders, I suppose that there ought to be no foreign withholding tax imposed when a dividend is paid to us. Also, the transaction should be tax free on the exchange.
According to the WSJ, the new restrictions will hit those inversions in which the U.S. shareholders end up owning more than 60 percent of the combined entity. In CF's case, the U.S. shareholders will own about 74 percent of the combined entity.
Noteworthy too in this regard is that as the CAPEX declines in Saskatchewan, POT's EPS will increase because they will have that much less to write off.
That clown is a time wasting moron. He pretends that he is sitting in the boardroom advising the company on dividend matters when of course he knows nothing. I have him on IGNORE which is about all one can do.
Britain currently has only 1 potash mine located in Boulby on the North Sea coast. It is owned and operated by ICL. However, ICL announced last Thursday that its mine will shed 200 jobs and 140 contractors from a total work force of over 1,000. More relevant to us though is that ICL plans to stop producing potash entirely by 2018 from that mine and concentrate on increasing its production of polysulphate, a different type of fertilizer. The Boulby mine currently produces more than 1 million metric tons of potash annually but only 200,000 metric tons of polysulphate..
I concur with what you are saying in terms of companies making bad timing decisions regarding when to repurchase their stock. My sense from what I had heard is that as bad as the share price is now, it would have to plunge significantly lower before a different calculation regarding what to do with existing and future cash flow. And even in the event that POT decided 'enough is enough' and indicated that it would pursue a buyback of its shares, my guess is that it would have no impact on the current yield and that whether it were, say, a 5 percent or a 10 percent repurchase, they would give themselves a year to accomplish it, figuring that lower CAPEX and lower operating costs in 2016 would give them enough flexibility to accomplish the current dividend payout as well as the buyback. The nabobs of negativism have been coming out in full force that the share price is headed down to the $10-$15 range. I just thought people might like to know that the company is actively watching what is happening to its share price.
Not according to CEO Tilk. In the most recent Q3 CC, a question was asked about any plans the company might have to repurchase its shares. The reply was that POT continues to have a bias in favor of increasing shareholder value via dividend increases rather than buybacks but mentioned that at a certain, unspecified share price, the emphasis could shift over to a share repurchase. Whether we will see that situation develop prompting a shift to buybacks remains to be seen notwithstanding the continuing weakness in the share price over the last several months.