Nutrien Ltd.

TN's 2024 Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference call over to Jeff Holzman, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and welcome to Nutrient's Second Quarter 2024 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 are contained in our quarterly report to shareholders, as well as our most recent annual report, MD&A, an annual information form. I'll now turn the call over to Ken Seitz, Nutrient's President and CEO, and Pedro Farrar, our CFO, for opening comments.

Good morning. Thank you for joining us today. Nutrient just delivered adjusted EBITDA of $3.3 billion in the first half of 2024, supported by increased crop input margins, strong global potash demand, and lower operating rate costs. Our upstream fertilizer production assets and downstream retail business in North America and Australia have performed well in 2024, demonstrating our advantages across the ag value chain. The operating environment in Brazil has remained more challenged, and we will discuss today the actions we are taking to stabilize our business in this market. In potash, we generated adjusted EBITDA of $1 billion in the first half of 2024, which was down from the prior year due to lower benchmark prices. We increased potash production across our six mine network and lowered our controllable cash cost of production to $53 per ton in the first half. The reduction in per ton costs was driven by higher production volumes and supported by the benefits of mine automation investments. We sold record potash volumes in the first half, utilizing the advantages of our global supply chain to respond to increased demand from our customers in North America and offshore markets. In nitrogen, we delivered adjusted EBITDA of $1.1 billion in the first half of 2024, as lower benchmark prices were partially offset by lower natural gas costs. Our North American nitrogen assets remain very well positioned on the global cost curve, and we continued to progress reliability initiatives that contributed to higher operating rates. Nitrogen selling prices in the second quarter increased compared to the first quarter of the year, reflecting the advantages of our extensive North American distribution network and the strong execution of our commercial team. Phosphate fertilizer markets remained relatively firm through the first half of 2024, and we benefited from lower raw material input costs. Our phosphate sales volumes were consistent with the prior year as we had extended turnaround activity at our Aurora and White Springs plants in both periods. Retail adjusted EBITDA totaled $1.2 billion in the first half of 2024, up 17% from the prior year, driven by increased gross margin across all major product lines. Crop nutrient sales volumes were similar to the prior year as planting delays in May offset the benefits of an early start to the application season in the first quarter. Crop nutrient margins increased by $21 per ton in the first half, supported by the stabilization of fertilizer markets and a lower cost inventory position compared to the prior year. Crop protection margins in North America returned to normalized levels, while wet weather in May impacted applications and shifted some demand into the third quarter. We ended the second quarter with retail crop protection inventory down 17% compared to the prior year. The majority of this reduction occurred in our Latin American operations, where we are focused on tightly managing inventory and working capital levels. Overall, we are pleased with the first half performance of our North American and Australian retail businesses. Excluding the impacts of delayed planting in North America, our results were in line with our previous expectations. Now turning to Brazil, where we have seen more persistent challenges. As outlined at our investor day in June, we are accelerating a margin improvement plan focused on further reducing operating costs and rationalizing our footprint to optimize cash flow. This included the decision to curtail three fertilizer blenders and close 21 selling locations in the second quarter. We continue to evaluate our commercial footprint in Brazil to further extract efficiencies and see opportunities to grow our proprietary products business. During the second quarter, we also incurred a loss on foreign currency derivatives in Brazil. We have taken actions to remediate this issue and are confident that these actions have addressed the matter going forward. Now turning to the market outlook for the remainder of 2024. Global grain stocks remain historically tight, while favorable growing conditions have created an expectation for record US corn and soybean yields. Despite lower crop prices, demand for crop inputs in North America is expected to remain strong in the third quarter, as growers aim to maintain optimal plant health and yield potential. We anticipate good affordability for potash and nitrogen will support fall application rates this year. Prospective soybean margins in Brazil are currently above 2023 levels, supported by a weaker real. Brazilian soybean area is expected to increase by 1 to 3% in the upcoming planting season and fertilizer demand is projected at approximately 46 million tons in 2024 in line with historical record levels. We are seeing strong underlying consumption trends in most major potash markets in 2024 and raised our full year global potash shipment forecast to 69 to 72 million tons. Uptake on our summer fill program in North America has been strong, which is supportive of granular grade demand in the third quarter. The settlement of potash contracts with China and India in July is expected to support demand in standard grade markets through the second half. Global nitrogen markets are being supported by steady demand and continued supply challenges in key producing regions. including the extension of Chinese urea export restrictions into the second half of 2024. US nitrogen inventories were estimated to be below average levels entering the second half, and we have seen strong customer engagement on our summer fill programs in the third quarter. I will now turn it over to Pedro to provide more details on our full year 2024 guidance assumptions.