The Mosaic Co. reported net earnings of $520.8 million ($1.17 per diluted share) on net sales of $2.15 billion for the third quarter ending Feb. 29, 2008, compared to the year-ago $42.2 million ($.10 per share) and $1.28 billion. Nine-month net earnings were $1.22 billion ($2.74 per share) on sales of $6.34 billion, versus the year-ago $217.1 million ($.49 per share) and $4.09 billion, respectively.
“We are delivering record results by effectively executing against the backdrop of an exceptional agricultural environment,” said Jim Prokopanko, Mosaic president and CEO. “We are bullish on the fundamental drivers of our sector and see this momentum continuing. With our phosphates and potash businesses and international footprint, we are well positioned to serve our customers and meet the growing demand for crop nutrients globally.”
Third-quarter phosphate gross margins were $478.4 million on sales of $1.26 billion, versus the year-ago $19.7 million and $690.7 million. Operating earnings were $442.7 million versus a year-ago loss of $11.1 million. Nine-month gross margins were $1.23 billion on sales of $3.67 billion, versus the year-ago $164.8 million and $2.24 billion, respectively. Operating earnings were $1.1 billion versus the year-ago $76.9 million.
The phosphate business put in a phenomenal performance, even with significantly higher ammonia and sulfur feedstock costs. The average DAP price during the quarter was up 98 percent, to $487/mt compared to the year-ago $246/mt. Ammonia was up at $399/mt from $345/mt, while sulfur was $174/lt from $62/lt.
Third-quarter potash gross margins were up 157 percent to $209.1 million on sales of $547.3 million, versus the year-ago $81.3 million and $342.7 million, respectively. Operating earnings were up 192 percent, to $195.9 million from the year-ago $67.0 million. Nine-month margins were $510.9 million on sales of $1.39 billion, versus the year-ago $239.1 million and $984.9 million, respectively. Operating earnings were up 127 percent to $467.3 million from the year-ago $206.0 million.
The average MOP price was up 53 percent, to $221/mt during the third quarter from the year-ago $144/mt.
Mosaic on April 4 announced a major long-term mine expansion in Saskatchewan in response to the continuing robust global demand for potash. The total expansions announced, together with those announced in May 2007, are expected to increase Mosaic’s annual capacity by approximately 5.1 million mt at an estimated average capital cost that is significantly lower than greenfield projects. Upon completion of these expansions, Mosaic’s total annual capacity will approximate 15.5 million mt, maintaining Mosaic as one of the premier potash companies in the world. The expansions are projected to occur over the next twelve years, with the first expansion production coming online in 2009. Some of the expansions are already underway, while others are in the planning and approval stages.
In addition to these expansions, approximately 1.3 million mt of annual capacity will revert to Mosaic within the next few years upon the expiration of a Potash Corp. of Saskatchewan Inc. tolling agreement at Esterhazy.
“We believe the global demand and supply fundamentals support this growth in our capacity and will allow us to fulfill our growing customer needs,” said Prokopanko. “We are positioned to bring on what we believe is the lowest cost incremental capacity in the industry while maintaining the flexibility to moderate the timing of these expansions as demand materializes,” Prokopanko added.