The Mosaic Co. reported a 50 percent drop in net earnings for the third quarter ending Feb. 29, 2012, to $273.3 million ($.64 per diluted share) from the year-ago $542.1 million ($1.21 per share). Net sales were off only slightly, to $2.19 billion from the year-ago $2.2 billion. Mosaic said growth in phosphate sales was offset by declines in potash sales.
“The potash segment’s operating results reflect delayed purchases, as buyers remained cautious,” said Jim Prokopanko, Mosaic president and CEO. “While the seasonal lull and risk aversion slowed sales in the third fiscal quarter, we continue to expect near-record global shipments in 2012 and a very strong North American spring season. During the quarter we produced 1.8 million mt and positioned inventory to capture global demand as it emerges.”
Third-quarter potash operating earnings were off 43 percent to $233.9 million on sales of $553.2 million, compared to the year-ago $413.9 million on sales of $757.7
million. Overall, potash sales volumes were off 41 percent during the quarter, to 1.09 million mt from the year-ago 1.86 million mt, while prices were up 27 percent, to $453/mt from $358/mt. The biggest drop in volumes was in North America, where they were down 62 percent in the quarter to 291,000 mt from the year-ago 757,000 mt, while prices were up 35 percent, to $531/mt from the year-ago $394/mt. International volumes were off 35 percent to 618,000 mt from 944,000 mt, while those prices were up 30 percent to $411/mt from $316/mt. Non-agricultural potash volumes were up 12 percent during the quarter, to 182,000 mt from 162,000 mt.
“We generated strong phosphate sales in the quarter,” noted Prokopanko. “While margins are expected to remain compressed through the end of this fiscal year, the beginning of fiscal 2013 should benefit from increased production at the South Fort Meade mine and lower spot prices on raw materials. Longer term, we believe the phosphate market provides us with significant opportunities, with strong grower economics driving record shipments in both 2012 and 2013.” In addition, Mosaic is projecting lower exports from China and Saudi Arabia, believing the Ma’aden plant will not reach its full 3 million mt capacity in 2012.
Third-quarter phosphate operating earnings were off 49 percent, to $190.2 million on sales of $1.65 billion from the year-ago $371.8 million on sales of $1.46 billion. Total phosphate volumes were up 9 percent during the quarter, to 2.6 million mt up from the year-ago 2.37 million mt. Within crop nutrient sales, phosphates to North America were up 29percent to 931,000 mt from 719,000 mt, while international were up 6 percent to 857,000 mt from 807,000 mt. The average DAP price was off 7 percent to $536/mt from $543/mt.
Higher ammonia and sulfur prices came into play during the quarter to crimp phosphate margins. The average ammonia price was up 45 percent to $589/mt from $406/mt, while the average sulfur price was up 37 percent to $228/lt from $166/lt.
Mosaic nine-month net earnings were $1.42 billion ($3.24 per share) on sales of $8.29 billion, down from the year-ago $1.86 billion ($4.17 per share) on sales of $7.1 billion.
Nine-month potash operating earnings were up 12 percent, to $993.7 million on sales of $2.26 billion from the year-ago $883.3 million on sales of $2.1 billion. Nine-month potash volumes were off 13 percent to 4.67 million mt from 5.3 million, while prices were up 31 percent to $445/mt from $340/mt. North American volumes were off 39 percent to 1.43 million mt from 2.3 million mt, while prices were up 44 percent, to $527/mt from $366/mt. International volumes were up 7 percent to 2.7 million mt from 2.53 million mt, while prices were up 37 percent to $400/mt from $292/mt. Non-ag potash volumes were up 13 percent to 527,000 mt from 468,000 mt.
Nine-month phosp