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The Mosaic Company reports 1Q20 results

Published by
World Fertilizer,


The Mosaic Company has reported net sales of US$1.8 billion and a y/y finished goods sales volume increase of 14%.

The company reported a net loss of US$203 million for 1Q20, including US$295 million of noncash foreign currency losses, which were primarily offset in other comprehensive income on the balance sheet. Adjusted net loss was US$21 million, a decrease of US$119 million from the prior year, as lower finished goods prices were partially offset by lower phosphate raw material costs and strong sales volumes. The loss per share was US$0.54, adjusted loss per share was US$0.06 and adjusted EBITDA was US$214 million.

Highlights

  • Agriculture has been deemed an essential business in nearly all of Mosaic's key markets, resulting in the prioritisation of logistics and support for agricultural inputs, including fertilizer, in order to ensure food security.
  • To date, there have been no material impacts to Mosaic's operating facilities, employees, supply chain and logistics as a result of Covid-19.
  • The company's action plans and employee diligence have resulted in only a handful of employee Covid-19 cases, which have been effectively isolated.
  • Mosaic continues to support its communities by investing over US$1.5 million in local food and medical supply relief.
  • Cash flow from operations was US$190 million, a US$366 million improvement from the year-ago period, as a result of stronger markets and volumes, and an improved working capital position.
  • - In 2020, in addition to cash flow from earnings, the company expects to receive up to US$170 million in cash proceeds from tax refunds and the unwinding of an interest rate swap.
  • Unrestricted cash totalled US$1.1 billion as of 31 March, as the company accessed credit facilities and managed working capital to ensure maximum financial flexibility during the current period of economic volatility.
  • Sales volumes in all three businesses in the first quarter were higher than one year ago.
  • - Sales of potash and phosphate in North America were driven by late-fall applications resulting in strong sales volumes early in the year.
    - Mosaic's Brazilian business recorded its best ever first quarter sales volume.
  • The company continues to execute well and make progress toward its 2021 targets.
  • - Mosaic Fertilizantes achieved transformational savings of US$17 million in the quarter towards its US$50 million 2020 target.
    -The cash costs of phosphate rock per tonne in real were R$312, ahead of the 2021 target of R$320.
    -The cash costs of phosphate conversion per tonne were R$309, down from R$321 in 2019, migrating towards its 2021 target of R$275.
    - Potash cash costs of production per tonne, excluding brine costs, were US$59, reflecting the accelerated shift of production to Esterhazy K3 and currency benefits, driving costs lower than the 2021 target of US$62/t.
    - The Esterhazy K3 mine development project continues to progress, with the third automated miner placed into service in the first quarter.
    - Phosphates' mining delivered cash rock costs of US$36/t, better than the US$39/t 2021 target, and the best quarterly result in six quarters.

“Mosaic's products are critical to ensuring that the global food supply remains sufficient and we appreciate the efforts of governments, our supply chain partners, our customers and Mosaic's employees to support farmers' needs,” said Joc O’Rourke, President and CEO. "We are all moving forward to capture the opportunity before us: meeting ever-rising demand for food."

Read the article online at: https://www.worldfertilizer.com/phosphates/05052020/the-mosaic-company-reports-1q20-results/

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