Transcript: Nutrien Q2 2026 Earnings Conference Call

Nutrien (TSX: NTR ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Nutrien reported record potash sales volumes and strong growth in proprietary products margins for the first half of 2026. The company raised its potash sales volumes guidance and lowered capital expenditures guidance while increasing the pace of share repurchases. Nutrien achieved significant automation in its mining operations, exceeding its 2024 target and optimizing capital expenditures. The nitrogen segment faced planned maintenance but maintained production expectations, benefiting from operational excellence.

The retail segment's adjusted EBITDA increased by 4% in the first half, with strong growth in proprietary crop nutrients despite softer fertilizer demand. Nutrien generated approximately $1 billion from asset divestitures since late 2024, enhancing portfolio quality and creating flexibility for debt reduction and shareholder returns. The company is reviewing strategic alternatives for its phosphate business, receiving numerous non-binding bids. Global agricultural markets are supported by robust demand, with expectations of El Niño conditions potentially increasing crop prices.

4 billion in Q2 2026, with cash provided by operating activities up 12% in the first half. The company plans to hold an Investor Day on November 30 to outline future growth opportunities. Full Transcript OPERATOR Greetings and welcome to Nutrien's 2026 second quarter earnings call. At this time all participants are in a listen-only mode.

The question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded, and I would now like to turn the conference call over to Jeff Holzman, Senior Vice President of Investor Relations and FP&A. Please go ahead. Jeff Holzman, Senior Vice President, Investor Relations and FP&A Thank you, operator.

Good morning, and welcome to Nutrien's second quarter 2026 earnings call. As we conduct this call, various statements that we make about future expectations, plans and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information.

Additional information about these factors and assumptions is contained in our Quarterly Report to Shareholders as well as our most recent Annual Report, MD&A and Annual Information Form. I will now turn the call over to Ken Seitz, Nutrien's President and CEO, and Mark Thompson, our CFO. Ken Seitz, President and CEO Good morning and thank you for joining us today to review our first half performance, progress on our strategic priorities and the outlook for our business.

In the first half of 2026, Nutrien delivered record potash sales volumes, strong growth in proprietary products margins and further enhanced the reliability and cost position of our nitrogen assets in a dynamic global operating environment. We raised the bottom end of our 2026 potash sales volumes guidance, lowered our capital expenditures guidance range and increased the pace of share repurchases. Our results demonstrated strong performance against our strategic priorities that are strengthening our business, driving structural growth in free cash flow and increasing cash returns to shareholders.

In potash, we increased production from our low-cost six-mine network and utilized the capabilities of our extensive global supply chain to meet strong customer demand. In the first half, we mined 53% of ore tons using automation, exceeding the top end of our 2024 Investor Day target. This result reflects the strong execution of our automation strategy while also highlighting additional opportunities to further enhance deployment and performance across the network. These investments are delivering wide-ranging benefits beyond improvements in safety and productivity.

Increased automation enables us to mine more ore with the assets already in place, helping to optimize capital expenditures and maximize returns on existing investments. In nitrogen, our low-cost North American assets remain well positioned with advantaged natural gas costs and a continued focus on initiatives that increase upgraded product volumes and margins. Our first half production was consistent with our previous expectations, including a planned turnaround at our Carsland facility that demonstrated operational excellence in action.

The turnaround was the largest in the facility's history and included a debottlenecking project that increased the site's annual production capacity. Despite a much larger scope than the last major turnaround four years ago, we achieved higher productivity and contractor efficiency through improved planning and execution. The work was completed safely with zero lost-time injuries, ahead of schedule and under budget.

Turning to our downstream retail business, adjusted EBITDA increased by 4% in the first half of 2026, underpinned by execution of key growth initiatives that enhance our ability to serve growers with a broader set of products and services integrated through our network. Our proprietary products business delivered strong growth in the first half, including a 10% increase in proprietary crop nutrients gross margin despite softer fertilizer demand.

As growers continue to prioritize solutions that enhance productivity, our performance reflects targeted investments we made to expand capacity and meet increasing customer demand, with sales volumes for certain nutritional products increasing nearly tenfold compared to the prior year. Together, these results demonstrate how customer insights, targeted investments and disciplined execution are driving earnings growth. Over the last two years, we have taken purposeful steps to optimize our portfolio following a comprehensive review of each asset's free cash flow contribution and returns on invested capital.

Since June 2026, we completed agreements to sell non-core assets for gross proceeds of approximately $90 million. Including these agreements and prior divestments, we have generated approximately $1 billion in gross proceeds since the fourth quarter of 2024. These actions are strengthening our portfolio quality while creating additional flexibility to reduce debt, increase shareholder returns and allocate capital to businesses with superior long-term growth opportunities. As previously announced, we are reviewing strategic alternatives for our phosphate business and are encouraged to have received numerous non-binding bids as part of the process.

We also continue to review strategic options for our Trinidad nitrogen operations and each component of the Brazilian retail business. We remain on track to solidify the optimal path for these businesses in 2026. Overall, our first half results demonstrate progress on our strategic priorities and disciplined execution to enhance earnings quality and free cash flow per share. Across each of our businesses, we continue to focus on areas within our control, namely operational excellence, cost management and capital efficiency.

While the external environment remains dynamic, we believe Nutrien is well positioned to create long-term value for our shareholders. Now, turning to the market outlook, global agricultural markets are supported by robust grain and oilseed demand. Risks to crop production and trade have increased due to geopolitical uncertainty and forecasts indicating El Niño conditions, which are expected to place upside pressure on crop prices. Potash margins remain constructive due to favorable affordability, healthy demand in all major global markets and stable supply relative to other commodities.

We've maintained our forecast for global potash shipments of 74 to 77 million tons in 2026 as projected shipment levels are expected to be consistent with consumption. Global urea prices declined in the latter half of the second quarter during a seasonal low for demand that was exacerbated this year due to evolving geopolitical developments. Global urea fundamentals have firmed in the third quarter, driven by ongoing trade flow disruptions, production outages, elevated energy prices and increased demand. We expect these factors will continue to shape the outlook for nitrogen markets over the remainder of 2026.

In this environment, Nutrien's North American nitrogen assets are well positioned to benefit from secure, low-cost feedstock supply and dependable market access. With that overview, I'll now turn it over to Mark to provide more detail on our second quarter financial performance, guidance assumptions and capital allocation priorities. Mark Thompson, CFO Thanks, Ken. 5 billion, up 6% from the prior year.

Cash provided by operating activities rose by 12% in the first half, providing opportunity to further advance our capital allocation priorities. At potash, we generated adjusted EBITDA of $658 million in the second quarter, reflecting higher global benchmarks and strong operational and supply chain execution. Our second quarter and first half potash controllable cash cost of product manufactured was flat compared to the prior year due to cost control measures and the benefits of our automation program that Ken articulated. We continue to target our controllable cash cost below $60 per ton on a full year basis.

8 million tons due to the strength of first half sales and increased visibility on the second half order book. Canpotex is fully committed for third quarter sales volumes and we had a favorable response to our domestic summer fill program. We anticipate a similar split between offshore and domestic sales volumes in the third quarter compared to the prior year. Our nitrogen operating segment generated adjusted EBITDA of $635 million in the second quarter.

Net selling prices were in line with higher global benchmarks and the timing of order book sales, with approximately 35% of total segment volume sold prior to the onset of the Middle East conflict. Nitrogen sales volumes were down from the prior year, reflecting no production from Trinidad and New Madrid, planned maintenance at Carsland and some deferred customer purchases late in the quarter during a period of increased market volatility. Looking ahead, the majority of our Q3 nitrogen fertilizer sales volumes are now committed to and aligned with summer fill values set in late June and early July.

7 million tons, with planned turnarounds scheduled at our Lima and Redwater nitrogen facilities in the third quarter and higher ammonia operating rates expected in the fourth quarter. In phosphate, adjusted EBITDA declined in the second quarter due to elevated sulfur costs, which have placed unsustainable pressure on global phosphate producer margins. We maintained our 2026 phosphate sales volume guidance, supported by reliability improvements achieved in the first half, while we continue to closely monitor customer demand and sulfur input costs in the second half of the year. 24 billion in the first half, up 4% compared to the prior year.

Following a strong start to the application season in the first quarter, North American retail crop nutrient volumes declined in the second quarter, in particular for phosphate and nitrogen. The reduction in commodity fertilizer volumes was offset by strong proprietary products performance. 95 billion, with the midpoint of the range underpinned by three key items. First, we continue to project high single digit growth in our proprietary products gross margin in 2026 supported by organic growth in our core retail geographies.

Second, we expect higher crop nutrient margins per ton to offset a reduction in sales volumes compared to the prior year. We anticipate firming crop prices and an earlier start to the North American fall application season will support nitrogen and potash applications similar to historical average levels, with phosphate demand expected to remain below historical levels. Third, we anticipate recent favorable weather to improve winter planting prospects in Australia and continued strength in livestock markets through the second half.

As we look toward the remainder of 2026, we expect free cash flow to be supported by constructive fertilizer market fundamentals, strong operational execution, capital discipline, as well as ongoing portfolio optimization efforts. 05 billion. We increased share repurchases in the first half of 2026 by 26% compared to the prior year and have stepped up our repurchase pace in the third quarter to approximately $75 million per month. This is consistent with our capital allocation approach of increasing cash returns to shareholders and maintaining a strong balance sheet as we structurally grow free cash flow.

I'll now turn it back to Ken for final comments. Ken Seitz, President and CEO Thanks, Mark. The results we shared today demonstrate the progress towards strengthening the business and positioning Nutrien for long-term growth and resilience across Nutrien. Our teams continue to identify initiatives to further improve performance, unlock value from existing platforms, efficiently serve our customers, and advance future growth.

Together, these efforts are expected to structurally increase free cash flow per share and enhance long-term shareholder returns. To that end, we intend on hosting an Investor Day on Nov. 30 in Toronto where we will outline the next phase of opportunities to create additional value across the business to close. I'm encouraged by the team's execution in the first half of 2026 and the momentum we continue to build across Nutrien.

With that, we'd be happy to take your questions. OPERATOR Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the number one on your touchtone phone.

You will hear a prompt that your hand has been raised, and should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. The first question comes from the line of Chris Parkinson from Wolfe Research. Please go ahead.

Chris Parkinson, Analyst at Wolfe Research Great. Good morning. Just want to circle around the second half outlook for potash. It seems like demand has been pretty stable across Asia, Southeast Asia, some of your core markets.

I'd love to hear your perspectives there versus your initial Jan 1 expectations, run through the Americas. And then in terms of your order books, do you feel pretty comfortable where you are now heading into December, especially that you know your Cali is taking some maintenance downtime and some other stuff. Would just love to hear both the puts and takes, how you're thinking about that. Thank you so much.

Ken Seitz, President and CEO Great. Thank you, Chris. Yeah, we are certainly constructive on potash for the second half and for the year. 8 million tons, and this is largely owing to favorable affordability, of course, and, to your question, healthy demand in all major global markets.

We started the year with low inventories that are being replenished, and here we are in the second half. We've had a favorable response to our summer fill program, we're now heavily committed through Q3, and of course Canpotex is fully committed to Q3 and expecting year-over-year growth in offshore markets. So yes, constructive on the setup. But maybe, to your question, Chris, I'll hand it over to Chris Reynolds to just talk about region by region.

Chris Reynolds Yeah, good morning, Chris. Thanks for the question. And as Ken said, we are feeling good about demand for potash for the balance of the year. As you know, still globally the most affordable nutrient out there, and we're seeing that in our major markets.

And so as you suggest, as we go around the world here, North America: we had a good response to our summer fill program and then subsequent to that a price increase we took, where we've taken some orders against that already, and also a fairly slim import lineup as we look out over the next couple of months. Brazil: Q3 is always a little seasonally quiet in Brazil, but despite that, prices have been holding pretty steady around that $400 mark. And the uptick in ag commodity prices we've witnessed has also helped sentiment down there.

We estimate there's still a lot of buying to be done yet in Brazil for the balance of the year, somewhere around 4 million tons, and so feeling good about things there. We actually just got back from a trip to China, talking to customers there. And although port inventories have grown a little bit year over year in China, what we heard from our customers is that in-country channels are reasonably slim. 3 million tons, certainly not overbearing in terms of supply and demand.