Phosphate producer Itafos Inc. reported record results for both the year and fourth-quarter ending Dec. 31, 2022. Full-year net income was $114.7 million on revenues of $593.3 million, up from 2021’s $51.4 million and $413.5 million, respectively. Adjusted EBITDA was $224.8 million, up from 2021’s $143.4 million. Adjusted EBITDA guidance had been $210-$230 million.
“Over the last 24 months we have successfully executed on our stated business objectives and implemented solutions which have strengthened the company for the future,” said G. David Delaney, Itafos CEO. “Included among those accomplishments were deploying strong free cash flow toward deleveraging, including two debt refinancings which have significantly reduced the company’s net debt at the end of 2022 to $88.3 million, a $129.4 million reduction from the prior year-end.
“We have positioned Itafos for the next phase of sustainable growth with the planned extension of the Conda (H1/NDR) mine-life through 2037,” Delaney continued. “Following the publication of the Final Environmental Impact Statement in November, we continue to advance the H1/NDR mine-life extension approval process, working collaboratively with the relevant regulatory agencies, and expect a decision in the coming months with capital work commencing soon thereafter.
“As a result of the significant progress made over the last two years, the company announced on March 13, 2023, that the Board has formed a Committee of Independent Directors to explore and evaluate various strategic alternatives (GM March 17, p. 1),” he added. The Board believes that this is an appropriate time to consider the full range of potential alternatives to enhance value for all Itafos shareholders.”
Itafos said the 2022 improved results were mainly due to higher realized prices and sales volumes from the Conda phosphate complex, which were partially offset by higher input costs.
Full-year P205 production at Conda was 343,526 mt, up from 2021’s 331,219 mt, with the increase primarily due to a shorter plant turnaround in 2022 than in 2021.
The company’s Arraias produced 99,030 mt of sulfuric acid in 2022, compared to none in 2021. However, Arraias generated adjusted EBITDA of $0 versus a $3.8 million loss in 2021.
Fourth-quarter net income was $29.3 million on revenues of $135.2 million, up from the year-ago $24.3 million and $116.8 million, respectively. Adjusted EBITDA was $50.1 million, up from $47.9 million. Adjusted EBITDA guidance had been $35-$55 million.
The company said fourth-quarter results were up due to higher realized MAP prices and sales volumes from Conda, which were partially offset by higher input costs.
Fourth-quarter production at Conda was 89,226 mt of P205, up from the year-ago 84,808 mt. The increase was primarily due to 2021 disruption in sulfuric acid supply.
Arraias produced 35,895 mt of sulfuric acid during the quarter, versus none in the year-ago quarter. Adjusted EBITDA was $0, compared to a year-ago loss of $1.1 million.
Itafos gave 2023 guidance of $140-$180 million in adjusted EBITDA and $35-$65 million in net income.
The company expects the current strength in global agriculture and phosphate fertilizer fundamentals to continue, although 2023 prices are expected to moderate off the historically higher 2022 prices. The company expects continued stability in prices and volume fundamentals in the phosphate fertilizer markets.