The Mosaic Co., Tampa, reported adjusted EBITDA of $3.6 billion for the year ending Dec. 31, 2021, matching the Bloomberg Consensus, the average estimate of major analysts.
However, net income fell short at $1.63 billion ($4.27 per diluted share). The analysts projected $1.73 billion. Net sales were $12.3 billion. 2020 net income was $666.1 million ($1.75 per share) on sales of $8.7 billion.
Full-year gross margin was $3.2 billion, up from $1.06 billion, while operating earnings were $2.5 billion, up from $412.9 million.
Fourth-quarter net income was $664.8 million ($1.76 per share) on net sales of $3.84 billion, down from the year-ago $827.9 million ($2.17 per share) and $2.46 billion. Gross margin moved up to $1.15 billion from $411.4 million, while operating earnings were $969.7 million, up from $294.8 million. Adjusted EBITDA was $1.22 billion.
“Mosaic delivered record EBITDA in 2021, and we expect strong performance to continue in 2022,” said Joc O’Rourke, President and CEO. “As a result of successful investments like our new Esterhazy K3 potash mine, Mosaic Fertilizantes in Brazil, and our cost-structure transformation, we are generating tremendous value in the current environment. This has provided us with the opportunity to return significant capital to shareholders, while still investing efficiently in the business and strengthening the balance sheet.”
Operating earnings surged at all three company segments. Volumes in each were down for the year, while prices soared. This was the same for the fourth quarter except for Mosaic Fertilizantes, which matched year-ago volumes.
Mosaic said the accelerated ramp up of K3 is expected to be completed by the end of March. Total 2022 production from the mine is put at 5 million mt, with annual capacity at 5.5 million mt. The company said production costs are in the $50’s/mt area and are trending lower on a through-cycle basis.
The Colonsay mine has successfully attained an annual run rate of 1 million mt. Fourth-quarter production costs at the mine were $85/mt, down from the pre-idle $100/mt.
The company said inventories in Brazil grew toward the end of the year, reflecting market pricing and a build in nutrient volumes in anticipation of meeting demand from growers in early 2022. The company said distribution potash inventory volumes at year-end were roughly 350,000 mt higher than at the end of 2020, leaving the company well positioned to meet demand left unserved by supply chain constraints and shortfalls from other producers.
As for the situation in Belarus, Mosaic believes debottlenecks in Canada and Russia should help mitigate some of the impact, but logistical constraints will prevent producers from replacing all of the potential lost tonnage. The company noted that major buyers India and China recognized the potential shortfall and committed to supply agreements.
In North America, Mosaic said illness-related labor shortages, rail and truck delays, and weather impacts are slowing the delivery of inputs to facilities and product to end customers. In Brazil, road and port congestion is also slowing deliveries, though Mosaic continues to benefit from access to its own private ports, sufficient inventory volumes, and in-country market positioning.
The company said MicroEssentials sales volumes achieved a new record of 3.3 million mt, up from the year-ago 3.1 million mt. Gross margins averaged $32/mt higher than DAP.
For first-quarter 2022, Mosaic expects upward pricing momentum to continue, with about 85 percent of sales committed and priced. Phosphate sales volumes are expected to be in the range of 1.6-1.8 million mt, and potash at 1.8-2.0 million mt. First-quarter FOB realized prices for phosphates are expected to be more than $60/mt higher than prices realized in the fourth-quarter. Potash prices are expected to be more than $125/mt higher than the fourth-quarter.
The Board of Directors has approved a regular dividend target increase to $0.60 per share annually from $0.45, beginning with the second quarter payment.
Mosaic expects to accelerate its current share repurchase of $400 million in February, and believes it will use some $830 million of the $1 billion it authorized in August 2021. It expects to exhaust the remaining portion of the current authorization through open market purchases. The Board has approved another $1 billion in share repurchases, which will take effect following the completion of the current program.
| Potash | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Sales Volume (M mt) | 2.1 | 2.7 | 8.2 | 9.4 |
| Operating Earnings (million $) | 443 | 95 | 837 | 402 |
| Gross Margin per $/mt | 224 | 45 | 129 | 50 |
| Sales (billion $) | 2.6 | 2.0 | ||
| MOP Selling Price $/mt | 414 | 177 | 285 | 181 |
| Adj. EBITDA (millions) | 517 | 179 | 1,286 | 722 |
| Phosphates | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Sales Volume (M mt) | 1.8 | 2.3 | 7.7 | 8.5 |
| Operating Earnings (million $) | 418 | 134 | 1,180 | (147) |
| Gross Margin per $/mt | 254 | 73 | 170 | 15 |
| Sales (billion $) | 4.9 | 3.1 | ||
| MOP Selling Price $/mt | 676 | 363 | 564 | 310 |
| Adj. EBITDA (millions) | 571 | 266 | 1,729 | 536 |
| Mosaic Fertilizantes | 4Q-21 | 4Q-20 | 2021 | 2020 |
| Sales Volume (M mt) | 2.3 | 2.3 | 10.1 | 10.6 |
| Operating Earnings (million $) | 195 | 97 | 745 | 347 |
| Gross Margin per $/mt | 95 | 32 | 83 | 40 |
| Sales (billion $) | 5.1 | 3.5 | ||
| MOP Selling Price $/mt | 654 | 352 | 504 | 330 |
| Adj. EBITDA (millions) | 197 | 115 | 821 | 473 |