Potash Corp. is doing so much better than expected that its third-quarter income tax almost tripled to $150.4 million, the company reported Thursday.

Profit for the three months ended Sept. 30 would have beaten the record second-quarter figures but for the costs of the higher Canadian dollar and the higher tax.

Increasing demand for grains is pushing the market for fertilizers.
(CBC)

Third-quarter profit was $243.1 million (75 cents a diluted share), compared to $145.2 million (46 cents) a year earlier. Sales were $1.30 billion, compared to $953.5 million.

Potash stock soared more than five per cent or $5.38 to $110.93 in TSX trading.

Potash said all three of its businesses are doing well:

• Higher prices boosted the gross margin on potash to $221.3 million, up from $153.6 million last year.
• The $123.9-million gross margin on nitrogen was almost double the 2006 figure.
• The gross margin on phosphate was a record $129.9 million, more than four times the year-earlier level.

Potash said its sales are being driven by the strong demand for agricultural commodities, itself the product of the increasing global population, higher incomes and more consumption of proteins.

"Many regions of the world are enjoying unprecedented wealth creation and their people are developing an appetite for more nutritious food," Potash president and CEO Bill Doyle said in a release.

Biofuels are also increasing in demand. U.S. production is expected to consume about one billion additional bushels of corn in 2008, Potash said.

The potash market is so tight that the company gave all customers allocations for much of the third quarter, it said.

Profit for the nine months ended Sept. 30 was $726.8 million ($2.25 a diluted share, compared to $445.8 million ($1.40). Sales were $3.80 billion, compared to $2.74 billion.