Phosphate maker Itafos Inc. reported third-quarter net income of $3.1 million on revenues of $110.8 million, down from the year-ago $8.1 million and $153.2 million, respectively. Adjusted EBITDA was $19.7 million, down from $50.7 million.
“We are pleased to report solid financial results and the continuation of our strong safety and operational performance in third-quarter 2023,” said G. David Delaney, Itafos CEO. “During the third-quarter 2023, we saw prices rebound and moderate off the lows of second-quarter 2023, reflective of demand improvement and tighter US supply fundamentals. We expect to see these conditions continue into first-half 2024.”
“During the third quarter, we continued to successfully execute our business plan and made significant progress on a number of key company objectives,” he added. “Work intensified and continues on our Husky 1/North Dry Ridge (H1/NDR) capital project with the project remaining on budget and on schedule for 2026 operations.”
Delaney also noted that during the quarter the company entered into a new five-year MAP sales agreement with J. R. Simplot Co. (GM Sept. 8, p. 1). He said the agreement, which commences on Jan. 1, 2024, provides visibility around the company’s MAP sales volumes over the medium term. The prior MAP sales agreement was with Nutrien Ltd.
Itafos said that it has entered into a new two-year ammonia supply agreement with a subsidiary of Nutrien, which will commence on Jan. 1, 2024. The current supply agreement, dated Jan. 12, 2018, was with Nutrien and was set to expire on Dec. 31, 2023.
Delaney said the company has maintained its full-year EBITDA guidance, narrowing the bottom of the range, based off these improved market conditions. Guidance is now $125-$135 million compared to the earlier $115-$135 million. Net income guidance is $50-$60 million, up from $45-$60 million.
Delaney said the process, announced in the first quarter (GM March 17, p. 1), remains ongoing to explore and evaluate various strategic alternatives to enhance value for all Itafos shareholders.
The Conda facility generated $23.7 million in adjusted EBITDA during the third quarter on revenues of $106.8 million, down from the year-ago $54.2 million and $145.3 million, respectively. Conda produced 87,976 mt of P205 during the quarter, versus the year-ago 84,908 mt.
As part of its Fertilizer Restart Program in Brazil, Itafos began producing direct application phosphate rock (DAPR) at its Arraias facility during the quarter. It produced 4,553 mt versus zero during the year-ago quarter.
Arraias produced 25,821 mt of sulfuric acid, down from the year-ago 32,935 mt, with the company citing lower demand. The Arraias complex posted an adjusted EBITDA loss of $100,000, compared to a gain of $200,000 in the year-ago quarter.
Company-wide, Itafos posted nine-month net income of $51.7 million on revenues of $346.5 million, down from the year-ago $85.4 million and $458 million, respectively. Adjusted EBITDA was $102.3 million, down from $174.6 million.
Conda reported $115.8 million in adjusted EBITDA on revenues of $335.7 million for the first nine months, down from the year-ago $185.3 million and $441.7 million, respectively. It produced 253,311 mt of P205, just down from the year-ago 254,300 mt.
Arraias produced 54,988 mt of sulfuric acid for the first nine months, down from the year-ago 63,135 mt. Itafos said the decrease was due to required maintenance in April and May. Nine-month adjusted EBITDA for Arraias was a loss of $700,000, compared to a year-ago loss of $100,000.