All posts by hlancey@bloomberg.net

FBN – Management Brief

Asia, Europe, Management Briefs, U.S.

FBN on Feb. 22 announced the appointment of Diego Casanello as CEO, effective March 1, 2024. He replaces Interim CEO Devin Lammers who served in that role since November 2023. 

Casanello has more than 30 years of leadership experience in agriculture, most recently as the Managing Partner and CEO of Vidavo Ventures, a venture capital firm. He previously served as CEO of Arysta Life Science Inc. and as COO of UPL Ltd. He spent more than 20 years with BASF, where he ran business units on four continents.

Originally from Argentina, Diego has resided in Asia, South America, North America, and Europe. He now lives with his wife and children in the Research Triangle region of North Carolina. He holds a degree in Business Administration from the University of Hagen in Germany.

Huma® Inc. – Management Brief

Management Briefs, U.S.

Agricultural humic solutions supplier Huma® Inc., Gilbert, Ariz., on Feb. 20 announced several leadership appointments. Fred Nichols has been named Executive Vice President, Global Chief Sales and Marketing Officer. He will continue his head marketing responsibilities while leading the company’s global product sales, addressing strategic staffing needs, and guiding regional growth.

Justin Smith is Executive Vice President, Business Development. Hewill direct company operations in Brazil and Mexico and oversee the Huma Environmental and Turf & Ornamental divisions, along with the management of Tech Additive ingredient solutions for private label and agricultural partners.

Michael Gardner is Director of Huma® Turf & Ornamental. He will transition from his role as Regional Sales Manager to direct global sales and operations for the company’s Turf & Ornamental business, including products from Humas acquisition of global granular fertilizer company Gro-Power Inc., Chino, Calif.

Cory Ritter is Midwest Sales Manager. He will work with retailers and farmers to offer agronomic advice and tailored humic solutions to improve soil and plant health, yields, and return on investment through sustainable, regenerative agricultural solutions. He is lifelong Illinois corn and soybean farmer.

BP Plc – Management Brief

Ammonia, London, Management Briefs

London-based BP Plc has appointed its top liquefied natural gas (LNG) executive, James Cheeseman, to build ammonia trading as demand grows for green fuels, according to Bloomberg, citing the company. Cheeseman has headed up Atlantic LNG trading at BP for the past decade and will start his new job as Vice President for Ammonia Trading on April 1.

Jörg Selbach-Röntgen, CEO of energy trading group MET Germany GmbH, told Bloomberg his firm is also looking into ammonia. “Ammonia might play a role going forward,” he said. “Given the fact MET Group is also located in Asia now — with an office in Singapore — ammonia is an international topic we will be exploring.”

ICL’s FY2023 Earnings, Sales Drop

Brazil, China, Earnings, India, Potash, U.S.

ICL Group Ltd. reported a 70% drop in adjusted net income attributable to shareholders of the company for the year ended Dec. 31, 2023, to $715 million from $2.35 billion the previous year. Diluted adjusted earnings per share were $0.55 versus $1.82 per share the previous year.

FY2023 adjusted EBITDA declined 56%, to $1.75 billion from the year-ago $4.01 billion, while sales fell 25% year-over-year, to $7.54 billion from $10.02 billion.

The company noted “the significant impact” that lower prices, especially for potash, had on the annual EBITDA. The impact was partially offset by lower raw material costs, and also savings and efficiency programs initiated in the fourth quarter.

ICL President and CEO Raviv Zoller described FY2023 as one of challenging market conditions and, in the fourth quarter of the year, resilience in the face of war.

“While we continued to face various operational challenges in the fourth quarter, which were caused by the war, our efforts to minimize disruption and maintain good production levels were successful,” Zoller told analysts at a company earnings call on Feb. 28.

“Additionally, the majority of our employees who had been called up for service have now returned to full-time work at ICL,” he said, noting that the many people called for reserve duty had stretched the company on the maintenance side, and had even caused some loss of production.

Fourth-quarter net income attributable to shareholders fell 66%, to $123 million from $358 million the previous year. The quarter’s diluted adjusted earnings per share were $0.10 versus $0.28 per share the prior year. Fourth-quarter adjusted EBITDA fell 49%, to $357 million, while sales declined 19%, to $1.69 billion.

While the company sees improving demand for 2024, it expects the situation in the Red Sea to remain challenging. “We currently see improving demand in the company’s key end-markets, and, while we expect there will be new and continued challenges in 2024, we are looking forward to achieving our goals for the year, including inorganic growth,” Zoller said.

In the fertilizer sector, Zoller sees market demand strengthening this year as fertilizer prices remain affordable. In addition, he sees soil nutrient deficiency around the world as remaining an issue due to under application of fertilizers for the previous two years. The company noted industry expectations to see global potash demand of more than 68 million mt in 2024.

The Red Sea situation has become a global issue, not just a local issue, Zoller noted. ICL was able to get all of the products it wanted through the Red Sea in the fourth quarter and in the first quarter so far, but Zoller said he does not expect the situation to improve in the next few weeks “until the war settles in one way or another.”

“The overall result is a hike in transportation costs,” he said. “And I think if it continues in the next few weeks, these higher transportation costs will translate into higher product costs.”

ICL reported that it is making a change to its guidance practices “in order to provide greater transparency for its shareholders.” Going forward, the company will be providing guidance for expected potash sales volumes and EBITDA guidance for all of its business segments other than potash, which will be referred to as specialties-driven business segments.

For 2024, the company expects adjusted EBITDA for its specialties-driven segments to be between $0.7-$0.9 billion. ICL expects 2024 potash sales volumes to be between 4.6-4.9 million mt, compared with 4.683 million mt in FY2023. It said fourth-quarter Potash segment EBITDA of $168 million should give a good indication of EBITDA at current prices, and ICL expects every $20 change in the average potash CIF price from current levels to result in a $100 million annual impact to EBITDA.

The Potash segment reported a 34% year-over-year drop in sales, to $2.18 billion from $3.31 billion in FY2022, while EBITDA declined 58%, to $843 million from $1.99 billion. Production was 6% lower, at 4.42 million mt from 2022’s 4.691 million mt. ICL cited operational challenges such as weather and war-related issues in the fourth quarter, as well as on-going geological constraints in Spain.

Sales volumes were up 4% in 2023, however, to 4.683 million mt from the prior year’s 4.499 million mt. The company attributed the increase mainly to increased sales volumes to Europe and China, partially offset by lower sales volumes to India, Brazil, and the US.

The average potash price in the fourth quarter was $345/mt CIF, 1% higher than the third quarter’s average but 42% lower than the $594/mt CIF average for the fourth quarter of 2022.

ICL’s Phosphate Solutions segment posted a 20% drop in sales in 2023, to $2.48 billion from $3.11 billion the previous year, while segment EBITDA declined 43%, to $550 million from $966 million. ICL described the results as “more normalized” after 2022’s price spike.

The Growing Solutions segment, which now includes ICL’s polyhalite mining operation at Boulby, England, reported a 14% drop in sales, to $2.07 billion from the prior year’s $2.42 billion. The segment’s EBITDA slumped 73%, to $119 million from $448 million.

The company said specialty agriculture sales decreased slightly year-over-year due to lower prices, partially offset by an increase in volumes. Turf and ornamental sales also decreased year-over-year.

ICL said weather-related challenges delayed fourth-quarter orders in Brazil, impacting both the quarter and full-year results for the Growing Solutions segment. However, the company said it gained market share in Brazil, with Brazil and China now accounting for approximately 40% of Growing Solutions sales.

Production of polysulfate at Boulby decreased 6% in the fourth quarter, to 238,000 mt, but annual production in 2023 reached 1.009 million mt, which ICL described as a production record. Sales of FertilizerpluS, one of the company’s main polysulfate-based products, decreased last year, however, as higher volumes only partially offset lower prices.

In connection with the company’s fourth-quarter results, ICL’s Board has declared a cash dividend of 4.76 cents, or about $61 million in total. This compares to 13.83 cents, or about $178 million in total, for fourth-quarter 2022. The 2023 dividend will be paid on March 26.

Chemtrade 4Q Income Back to Black

Canada, Earnings

Toronto-based Chemtrade Logistics Income Fund reported fourth-quarter net earnings of C$11.7 million on revenue of $422 million, up from the year-ago negative $11.7 million on revenue of $456.7 million, respectively. Adjusted EBITDA was $84.6 million, down from $104.3 million.

Full-year net earnings climbed 128%, to $249.3 million on revenue of $1.85 billion compared to 2022’s $109.1 million and $1.81 billion, respectively. Adjusted EBITDA was $502.6 million, up from $430.9 million.

 “The fourth quarter represented a successful end to what was another record year for Chemtrade, one in which we set a new high watermark for adjusted EBITDA,” said Chemtrade President and CEO Scott Rook. “More than anything else, these strong results are reflective of the continued strong execution across Chemtrade’s operations, from the plant floor through all levels to our senior leadership.”

Rook said Chemtrade expects another solid year financially in 2024 and reaffirmed the company’s previously issued 2024 adjusted EBITDA guidance of $395-$435 million. “While adjusted EBITDA is expected to be below the record level we achieved in 2023, achieving the mid-point of guidance of $415.0 million would represent the third highest adjusted EBITDA in our history,” he said.

Rook said Chemtrade expects to complete and commission the expansion and upgrade of its Cairo, Ohio, ultrapure sulfuric acid (UPA) facility this year. “This plant will be the first in North America to meet the quality requirements for next generation semiconductor nodes, furthering Chemtrade’s position as the top North American supplier of ultrapure acid to the semiconductor industry,” he said.

“We also expect to make additional progress on other high-return organic growth projects during the year, including in our water solutions business, while remaining disciplined on balanced capital allocation and maintaining a strong balance sheet.,” Rook added. Total cost for the Cairo project was put at $60-$65 million.

Another possible UPA project, one with joint venture partner KPCT Advanced Chemicals and located in Casa Grande, Ariz., remains on hold until it can be assured the project generates an acceptable level of return. Chemtrade said discussions with customers are ongoing and the jv has applied for CHIPS Act funding.

OCP 4Q Revenues Increase 21%

Earnings, Phosphate

OCP Group SA reported on Feb. 29 that its fourth-quarter revenues increased by 21%, to MAD30.24 billion (approximately $2.9 billion at current exchange rates) from MAD25.04 billion the previous year. OCP attributed the revenue growth to improved market conditions, which resulted in a recovery of demand across several major importing regions.

For full-year 2023, however, OCP posted a 20% drop in revenues, to MAD91.28 billion from MAD114.57 billion in 2022. The group cited “the exceptional increase” in phosphate-based product prices in 2022, noting that the FY20023 revenues result was 8% higher than 2021’s MAD84.3 billion.

OCP said its capital expenditure totaled MAD26.83 billion last year, up from MAD20.11 billion in 2022. The group will report its full FY2023 results in March.

South Harz Potash Ltd. – Management Brief

Germany, Management Briefs

Junior miner South Harz Potash Ltd., which is developing potash assets in Germany, reported that Non-Executive Director Len Jubber was appointed Non-Executive Chairman, effective Feb. 1, 2024. The elevation follows a decision by incumbent Chairman Ian Farmer to retire from the Board of Directors for personal reasons.

Jubber was first appointed to the South Harz Board in March 2021 and is a civil engineer by training. The company said he has a professional mining and executive career spanning more than 30 years.

Kropz Plc – Management Brief

Management Briefs, Phosphate, South Africa

South African phosphate miner Kropz Plc reported that Louis Swart resigned as Financial Manager, effective Feb. 29, 2024. The company said Swart has made himself available to assist over the next few weeks to ensure a seamless transition.

Werner Greyling has been named as the company’s new Financial Manager. He received an Honors Degree in Accounting and Finance in 2004 and is a Chartered Accountant and a member of the South African Institute of Chartered Accountants.

Idemitsu Joins Lakes Charles NH3 Project

Ammonia, Japan, Methanol, News Briefs

Japan’s Idemitsu Kosan on Feb. 27 announced that it has agreed with Mitsubishi Corp. and Swiss-based Proman to participate in the development of the proposed 1.2 million mt/y clean ammonia production project in Lake Charles, La.

The project, which is currently undergoing a Front-End Engineering Study (FEED) is located at Proman’s existing site in Lake Charles, adjacent to the company’s natural gas-to-methanol plant, which is also under development (GM Oct. 20, 2023).

Production is targeted by fiscal year 2030. The project would adopt the SynCOR™ of Topsøe A/S and the Advanced KM CDR Process™ developed by Mitsubishi Heavy Industries Ltd. (MHI) in collaboration with Kansai Electric Power Co. Inc.

Idemitsu aims to establish an ammonia import terminal utilizing the existing infrastructure at the Tokuyama plant (Shunan City, Yamaguchi Prefecture), and supply over 1 million mt/y of clean ammonia by 2030 to various industrial companies, including those that produce and supply materials in the chemicals and steel sectors.

Mitsubishi plans to turn its part of the LPG terminal located in Namikata-cho, Imabari City, Ehime Prefecture, into an ammonia terminal and supply clean ammonia for various industrial applications, mainly in the Shikoku and Chugoku regions.

Both Idemitsu and Mitsubishi intend to supply clean ammonia produced by the project to Japan through these terminals.