Itafos has reported its 2Q19 financial results and operational highlights. The financial statements and management’s discussion and analysis for the quarter ended 30 June 2019.
“Difficult global market conditions globally impacted our financial results, which were otherwise in line with expectations. Overall, we achieved several key milestones during the quarter including record May MAP production at Itafos Conda and securing a multi-year agreement with the OCP Group to supply high quality phosphate rock to Itafos Arraias” said Mhamed Ibnabdeljalil, the company's interim CEO.
For the 3 and 6 months ended 30 June 2019 and 2018, the company’s financial highlights were explained as follows:
- Revenues were up y/y primarily due to higher MAP and SPA sales volumes at Itafos Conda and revenue contributions from Itafos Arraias during H1 2019, which had not achieved commercial production during H1 2018.
- Net income was down y/y, primarily due to a gain on the fair valuation of and a gain from investments in associates related to the GB Minerals Ltd. Arrangement during Q1 2018.
- Adjusted EBITDA was down y/y primarily due to increased input costs at Itafos Conda and constrained production due to implementation of the repurpose plan (the 'repurpose plan') at Itafos Arraias during H1 2019, which had not achieved commercial production during H1 2018.
- Maintenance capex was down y/y primarily due to a partial planned plant turnaround at Itafos Conda during H1 2019 compared to a full planned plant turnaround at Itafos Conda during H1 2018.
- Growth capex was down y/y primarily due to the capitalisation of costs at Itafos Arraias during H1 2018 ahead of achieving commercial production, which were partially offset by growth capex primarily related to development of Itafos Farim during H1 2019.
Unusually cold and wet weather conditions across key growing regions affected short-term fertilizer buying patterns in the US and caused many growers to defer fertilizer purchases. These developments have increased the fertilizer industry’s inventories to near historic highs, putting significant downward pressure on realised phosphate fertilizer prices in the short-term. SPA production and sales were constrained due to finished product rail car and sulfuric acid availability, which were impacted by weather and logistical challenges and correspondingly resulted in a shift to incremental MAP production.
Margins were compressed y/y primarily due to higher input costs, most notably purchased sulfuric acid, ore and natural gas. The higher inputs costs were related to sulfuric acid contract repricing in 2019, higher ore feed costs driven by increased mining costs and a spike in natural gas price driven by a supply disruption due to an off-site pipeline explosion in late 2018. In addition, the company completed a partial planned plant turnaround during H1 2019 and a full planned plant turnaround during H1 2018.For full details of the report, click here.
Read the article online at: https://www.worldfertilizer.com/phosphates/20082019/itafos-reports-2q19-financial-results-and-operational-highlights/