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Mosaic Co. publishes 1Q21 results

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World Fertilizer,

The Mosaic Company has reported net income of US$157 million, or US$0.41 per share, for 1Q21. Adjusted EPS was US$0.57 and adjusted EBITDA was US$560 million.

Gross margin was US$435 million compared to US$41 million a year ago, reflecting improved per tonne margins in all three operating segments as a result of higher phosphates prices, higher potash volumes and transformation benefits. Reported earnings were negatively impacted by notable items of US$77 million.

“Mosaic delivered excellent earnings for the first quarter of 2021, and our outlook for the year remains favorable,” said Joc O’Rourke, President and CEO. “We are demonstrating the earnings power resulting from the combination of our longterm cost structure improvements and strong global fertilizer markets.”

First quarter revenues were up 28% year-over-year to US$2.3 billion, as the company capitalised on stronger market conditions.

Gross margins in the quarter were up almost 10-fold from the prior year period, primarily as a result of year-overyear price increases. The gross margin rate in the quarter was 19%, up from 2% in 1Q20, and the highest gross margin rate since 2Q15.

Unrestricted cash totalled US$692 million as of 31 March. The company generated US$319 million in cash flow from operations in the quarter. Capital expenditures were US$289 million in the quarter, and net debt ended the quarter at US$3.8 billion, down US$700 million from the year ago period.

Phosphates sales volumes were up 7% year-over-year to 2.1 million t. Production volumes were 1.9 million t, reflecting turnaround activity in the quarter. Due to ongoing strong demand, inventories remain well below historical levels, and as a result, sales are expected to be constrained to production volumes in the second quarter. Higher input costs were more than offset by improved pricing, and lower cash conversion costs, which resulted in gross margin per tonne increasing to US$84/t, up from last year's loss of US$43/t.

Potash sales volumes of 2 million t in the first quarter were up 4% year-over-year as the company's operating rate reached 94% in the quarter. Essentially flat MOP prices year-over-year, higher volumes and lower brine management spending resulted in a gross margin per tonne of US$71. On an adjusted basis, gross margin per tonne in the first quarter was US$82, up 19% from the prior year period.

Mosaic Fertilizantes recorded its highest first quarter adjusted EBITDA of US$104 million, up 53% from the prior year period. In the quarter, Mosaic Fertilizantes generated a gross margin per tonne of US$50, primarily due to higher prices. The business is ahead of schedule in reaching its targeted US$200 million of annual EBITDA contribution from transformation in the 2019 to 2022 period.

Read the latest issue of World Fertilizer in full for free: April 2021

The April issue of World Fertilizer begins with a regional report that examines the opportunities and challenges currently facing Latin America’s fertilizer industry. The remainder of the issue is dedicated to a range of technical articles covering ammonia, blending and bagging, plant design, fertilizer cargo measurement and fertilizer storage. Our World Review of fertilizer projects in Africa and the Middle East, Asia Pacific, Europe and CIS and the Americas rounds off the issue.

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