Agrium Delivers Record First Quarter Net Earnings of $195-Million

CALGARY, ALBERTA--(MARKET WIRE)--May 2, 2008 -- ALL AMOUNTS ARE STATED IN U.S.$
Agrium Inc. (Toronto:AGU.TO - News) (NYSE:AGU - News) announced today record first quarter net earnings of $195-million ($1.23 diluted earnings per share) in 2008, a significant improvement over the net loss of $11-million ($0.08 diluted loss per share) for the same period in 2007.

Our impressive first quarter results are due to the excellent fundamentals for the fertilizer and broader agriculture sector, as well as to the quality of our assets that span the agriculture value chain. Our Retail, Wholesale and Advanced Technologies business units all delivered record first quarter earnings this year. We expect our earnings this spring to surpass all previous records, even without the contribution of the UAP retail operations," said Agrium President & CEO Mike Wilson.

Agrium is providing guidance for the first half of 2008 of a record $3.15 to $3.45 diluted earnings per share, or $1.92 to $2.22 diluted earnings per share for the second quarter. This includes an estimated $44-million ($0.19 diluted earnings per share) in stock-based compensation expense and excludes any contribution from the UAP acquisition or potential hedging gains or losses.

KEY RESULTS AND DEVELOPMENTS

- Total EBITDA reached $341-million in the seasonally slow first quarter, which is an increase of $299-million over the first quarter of 2007. Cash provided by operating activities was $390-million for the quarter. The majority of the increase in earnings was from higher realized nutrient prices across all our businesses, supported by solid Wholesale production and sales for all major products. Non-qualifying gas hedge gains accounted for $67-million or $0.30 diluted earnings per share in the first quarter of 2008. The quarterly results also benefited from a $6-million ($0.03 diluted earnings per share) recovery for stock-based compensation due to a lower share price at the end of the first quarter. Our cost of goods sold and margins this quarter will not be comparable to previous quarters, as changes in accounting rules required depreciation charges for production facilities be included in the cost of product.

- We obtained U.S. regulatory clearance on our UAP transaction yesterday and will accept for payment all shares of UAP common stock tendered to the offer immediately after its expiration at midnight tonight. Our second quarter earnings guidance estimate excludes any contribution from the UAP acquisition. In 2007, UAP's net earnings for the most recent fiscal year was $82-million, the majority of their earnings were derived in the spring period (April, May and June). Our reported earnings from the UAP acquisition in the second quarter of 2008 are likely to be reduced from their actual earnings due to the fair valuing of inventory at the date of purchase.

- Agrium announced this quarter our intention to acquire Common Market Fertilizers S.A. ("CMF"), one of Western Europe's largest fertilizer distribution companies, which will provide access to significant distribution assets throughout Europe and further expand our distribution business. We also opened an office in China, the largest agricultural market in the world, to further develop our relationships with potential business partners and pursue future growth opportunities more effectively in the region. Furthermore, we announced we would not proceed with the Kenai gasification project due to unfavourable economics of supplying coal-based syngas to the facility.