The Mosaic Co., Tampa, reported first-quarter net income of $157 million ($0.41 per diluted share), up from the year-ago loss of $203 million ($0.54 per share). The company missed the Bloomberg Consensus for net income, the average estimate by major analysts, which was $234 million, however, the company reported that earnings were negatively impacted by notable items of $77 million.
Mosaic reported adjusted EBITDA of $560 million, a significant jump from the year-ago $214million and just below analyst projections of $562.3 million. However, the company noted that it was the highest first-quarter adjusted EBITDA since the company adopted a calendar fiscal year in 2013. It said it reflected its improved cost position, favorable markets, and the addition of Mosaic Fertilizantes.
Net sales were $2.3 billion, up from the year-ago $1.8 billion and matching analyst projections.
“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 long-term cost structure improvements and strong global fertilizer markets.”
The company expects strengthening fundamental trends for the past three quarters to continue through the remainder of 2021. It said phosphate channel inventories are low and it expects Chinese exports to remain low, as that country has strong domestic demand and its industry is restructuring. It expects any demand risk from India could be offset by demand from Brazil.
Mosaic sees similar dynamics for potash, noting the recent boost to Indian prices to $280/mt CFR from $247/mt CFR.
“There will be a time soon, or in the next year or two I suspect, where Colonsay may be required, but it will also require a sustained price, probably a little higher than what it is even today,” said O’Rourke during a May 4 earnings call, referring to the idled potash mine in Canada. For now, Mosaic has been meeting demand with the K3 and Belle Plaine facilities
Due to the 60-day lag in market price changes and their appearance in company results, Mosaic expects second-quarter phosphate prices to improve an additional $80-$90/mt and potash $20-$30/mt. However, phosphate results will be partially offset by $30-$35/mt in higher raw materials costs.
| Potash | 1Q-21 | 1Q-20 |
| Sales Volume (million mt) | 2.0 | 1.9 |
| Gross Margin (million $) | 140 | 109 |
| Gross Margin per $/mt | 71 | 57 |
| Sales (million $) | 477 | 442 |
| MOP Selling Price $/mt | 200 | 200 |
| Phosphates | 1Q-21 | 1Q-20 |
| Sales Volume (million mt) | 2.1 | 1.9 |
| Gross Margin (million $) | 173 | (83) |
| Gross Margin per $/mt | 84 | (43) |
| Sales (million $) | 1,000 | 619 |
| DAP Selling Price $/mt | 426 | 274 |
| Mosaic Fertilizantes | 1Q-21 | 1Q-20 |
| Sales Volume (million mt) | 2.1 | 2.1 |
| Gross Margin (million $) | 103 | 66 |
| Gross Margin per $/mt | 50 | 32 |
| Sales (million $) | 763 | 731 |
| Brazil MAP Price $/mt | 421 | 330 |
| Avg Finished Price (Dest.) | 370 | 352 |