Compass Minerals, Overland Park, Kan., on May 5 reported that its Plant Nutrient segment posted second-quarter revenue of $54.3 million, up 1 percent from last year’s second quarter, with the increase driven by a 28 percent increase in average sales prices largely offset by lower sales volumes.
Second-quarter operating earnings for the segment fell $0.9 million year-over-year, however, to $4.4 million, while EBITDA for the quarter was reported at $13.2 million, down from $14.1 million in the 2021 second quarter. The company said favorable pricing was offset by higher per-unit costs and lower production volumes.
Second-quarter operating margin for the Plant Nutrient segment was 8 percent compared to 10 percent last year, the company reported, and EBITDA margin was 24 percent compared to 26 percent last year.
Second-quarter Salt segment revenue totaled $391.3 million, up 6 percent year-over-year, which the company said reflected a 6 percent increase in sales volumes primarily driven by higher North America highway bid season commitments. Salt segment average sales prices were flat year-over-year, with a 3 percent decline in highway deicing average sales prices partially offset by a 9 percent increase in industrial (C&I) average sales price.
“Compass Minerals delivered year-over-year revenue growth during the quarter, in large part enabled by our expanded Salt commitments and strong Plant Nutrition pricing,” said Kevin S. Crutchfield, Compass President and CEO. “Unfortunately, intensifying inflationary pressures – particularly related to escalating fuel surcharges – and ongoing SOP production challenges continued to compress profitability to levels below what I believe is our normalized earnings potential.”
Salt segment operating earnings in the second quarter decreased $42.3 million to $49.3 million year over year, while EBITDA declined $44.1 million to $65.5 million over the same period. Salt segment operating margin was 13 percent in the second quarter, down from 25 percent last year, and EBITDA margin decreased to 17 percent from 30 percent over the same period, primarily due to higher distribution and production costs and lower highway deicing pricing.
Second-quarter consolidated revenue for the company was up 5 percent year-over-year, driven by the increase in highway deicing sales volumes, an 8 percent improvement in consumer and industrial (C&I) sales volumes, and higher Plant Nutrition and C&I pricing. Consolidated operating earnings for the quarter decreased $56.0 million to $20.0 million year-over-year, and Adjusted EBITDA was lower by $47.7 million over the same period, to $64.8 million, primarily driven by higher distribution and production costs.
“We are focused on mitigating the impact of these challenges to the extent possible through continued pricing actions, executing a successful North America highway salt bid season, balancing production volumes with expected demand to improve margin capture, and targeted productivity initiatives,” Crutchfield said.
The company has lowered its estimate of fiscal 2022 consolidated adjusted EBITDA to a range of $170-$200 million from its previously announced range of $200-$235 million, largely due to escalating fuel surcharges across all transportation modes in its Salt segment and continued SOP production yield challenges. Compass said these impacts are expected to only be partially offset by higher pricing in Plant Nutrition and targeted productivity initiatives.
| Plant Nutrition (millions) | 2Q-22 | 2Q-21 |
| Sales | 54.3 | 53.7 |
| Operating Earnings | 4.4 | 5.3 |
| EBITDA | 13.2 | 14.1 |
| Sales Volumes (000 tons) | 74 | 94 |
| Avg. Sales Price ($/ton) | 736 | 573 |
| Salt (millions) | 2Q-22 | 2Q-21 |
| Sales | 391.3 | 369.0 |
| Operating Earnings | 49.3 | 91.6 |
| EBITDA | 65.5 | 109.6 |
| Sales Volumes (000 tons) | 5,331 | 5,028 |
| Avg. Sales Price ($/ton) | 73.39 | 73.38 |