All posts by jlarareo@bloomberg.net

The Andersons’ 3Q Income Off 44%

Earnings, Indicators

The Andersons Inc. reported third-quarter net income from continuing operations attributable to the company of $9.7 million, down from the year-ago $17.4 million. Revenues declined to $3.64 billion from $4.22 billion. Adjusted EBITDA was $70.3 million, down from $83 million.

“Third-quarter results were solid for the company compared against last year’s best-ever third quarter,” said Patrick Bowe, President and CEO. “Our third quarter includes record results from our Renewables team with great operating performance in our ethanol plants, a strong margin environment and good results from our renewable diesel feedstock merchandising team.”

“We had solid core operating performance in our Trade segment, which was offset by a currency loss in our international business,” Bowe continued. “Lastly, our Nutrient & Industrial segment’s third quarter, which is typically a loss in this seasonally slow period, had year-over-year improvements in both its ag and manufacturing businesses.”

Bowe said the company is confident about the balance of the year and expects to achieve its previously communicated full-year adjusted EBITDA outlook of $350-$375 million.

“Farm income is projected to decline from lower commodity prices but should remain above the long-term average,” Bowe told analysts. “At these levels, we believe farmers should still be incented to invest in crop inputs. With our broad portfolio of ag products, we remain positioned to perform well into 2024.”

Nutrient & Industrial reported a third-quarter pretax loss of $8 million, an improvement over the year-ago loss of $12 million. Gross profit was $19 million, up from $15 million, while EBITDA was a positive $500,000, up from a negative $3 million. Revenues were $129 million, down from $164 million.

The company said the segment’s volumes were down 6% with an overall increase in margins. Improved margins boosted gross profit by $4 million and were partially offset by the volume decline. The Sioux City, Iowa, specialty liquid plant was impacted by a rail service interruption that had an impact on volumes for approximately one month.

For the fourth quarter, the company expects the segment to have improved year-over-year margins and solid volumes in fall application season.

Company-wide, nine-month net income from continuing operations attributable to the company were $50 million on revenues of $11.54 billion, versus the year-ago $104 million and $12.65 billion, respectively. Adjusted EBITDA was $270 million, down from $308.2 million.

Nutrient & Industrial reported nine-month pretax income of $24 million on revenues of $738 million, down from the year-ago $37 million and $844 million, respectively. Gross margin was $107 million, down from $120 million, while EBITDA was $51 million, off from $63 million.

OCI Swings to 3Q Loss; Hires Financial Advisors

Earnings, Indicators

OCI Global NV swung to an adjusted net loss of $95.2 million for the third quarter ended Sept. 30, versus a profit of $257.1 million for the same prior-year quarter, the company reported in its Nov. 7 earnings statement.

Adjusted earnings per share for the quarter were a negative $0.452 versus a positive $1.223 the previous year. Third-quarter adjusted EBITDA declined 75%, to $242 million from the year-ago $961.8 million, which was a big miss on the average analyst estimate of $360.3 million (Bloomberg Consensus).

OCI cited much lower selling prices across both nitrogen and methanol segments, and a front-loaded order book, which offset an 8% year-over-year increase in own-produced volumes. Some 82% of the quarterly adjusted EBITDA was generated by Fertiglobe, OCI’s ammonia and urea joint venture with Abu Dhabi National Oil Co, noted Morgan Stanley analyst Lisa De Neve, as cited by a Bloomberg report.

Third-quarter revenue was off 54% from the prior year, at $1.07 billion from $2.33 billion, also missing the average analyst estimate of $1.39 billion (Bloomberg Consensus).

OCI’s own-produced sales volumes for the third quarter increased to 2.79 million mt, up from the year-ago 2.59 million mt, while own-produced fertilizer volumes were 6% higher year-over-year, at 2.16 million mt from 2.04 million mt.

The company’s third-party sales volumes declined 65% in the third quarter versus a year earlier, to 393,800 mt, while total sales volumes were off 15% year-over year, to 3.19 million mt.

For the first nine months, OCI posted a 72% decline in adjusted EBITDA, to $903.8 million on revenue of $3.81 billion, down from the year-ago $3.22 billion and $7.52 billion, respectively. Revenues were 49% lower year-over-year.

The company reported an adjusted net loss attributable to shareholders of $116.9 million for first nine months, versus a net profit of $1.14 billion for the same prior-year period. Adjusted earnings per share were $0.555 versus the previous year’s $5.417.

In terms of market outlook, OCI Global CEO Ahmed El-Hoshy said nitrogen prices have maintained their positive momentum into the fourth quarter, with recent significant price increases for ammonia, following the earlier recovery for urea.

“Nitrogen prices have now increased by 36% on average since the troughs in the second and third quarters,” he said. “We expect the benefits from these increases to materialize in the fourth quarter.

OCI also sees the nitrogen outlook in the medium-to-longer term as remaining favorable, “with limited incremental supply additions, healthy farm economics, and elevated energy prices raising marginal cost floors.”

Conversely, the company noted that methanol markets have remained challenged by macroeconomic drivers, and prices declined during the third quarter. “Encouragingly, recent weeks have seen some methanol price recovery due to a combination of supply outages and an improvement in MTO rates,” El-Hoshy said.

OCI reported that it has hired financial advisors to explore asset monetization opportunities. The company said it is engaged in “active discussions” with a focus on “attractive value propositions.” The aim of the process is to bridge the gap between the combined value of individual company assets and the holding company discount.

OCI said its strategic review, which has focused on the identification of value accretive monetization opportunities while prioritizing growth in its fast-growing clean fuels business, is nearing completion.

The strategic review follows a request in March by activist investor Jeff Ubben, whose firm, Inclusive Capital Partners, owns 5% of OCI. Ubben urged OCI to explore strategic options, including asset sales, amid shareholder concerns about the company’s stock prices.

Regarding projects, OCI said its 1.1 million mt/y Texas Blue Ammonia project under development at the company’s Beaumont, Texas, site remains on track to start production in early 2025, with active discussions underway for long-term product offtakes and potential equity participation (GM Feb. 10, p. 1; Dec. 9, 2022; Sept. 9, 2022).

The company said it was on target to increase its combined green and low carbon ammonia and methanol portfolio from the current 200,000 mt/y to around 1.7 million mt/y by 2025.

OCI paid an interim dividend of €0.85 per share last month, bringing the total cash distributions to around $1 billion during calendar year 2023.

OCI Product Sales Volumes 

‘000 mt 3Q-2023 3Q-2022 % change 9M 2023 9M 2022 % change
Own Product





Ammonia 482.2 481.2 0 1,312.3 1,415.5 (7)
Urea 1,169.7 1,049.6 +11 3,479.2 3,284.4 +6
CAN 212.2 236.4 (10) 734.2 804.6 (9)
UAN 295.6 276.5 +7 968.7 1,032.2 (6)
Total Fertilizer 2,159.7 2,043.7 +6 6,494.4 6,536.7 (1)
Melamine 16.9 15.4 +10 44.7 76.5 (42)
DEF 187.3 218.9 (14) 550.1 662.8 (17)
Total Nitrogen Products 2,363.9 2,278.0 +4 7,089.2 7,276.0 (3)
Methanol1 428.6 317.1 +35 1,052.2 969.1 +9
Total Own Product Sold 2,792.5 2,595.1 +8 8,141.4 8,245.1 (1)
Traded Third Party





Ammonia 31.3 163.2 (81) 195.6 281.8 (31)
Urea 37.7 465.2 (92) 613.8 1,318.4 (53)
UAN 15.2 125.5 (88) 98.9 208.5 (53)
Methanol 86.3 64.0 +35 312.0 282.3 +11
Ethanol and Other 29.7 13.6 +118 66.7 13.6 +390
AS 96.6 175.5 (45) 242.2 461.3 (47)
DEF 97.0 133.5 (27) 234.7 329.2 (29)
Total Traded Third Party 393.8 1,140.5 (65) 1,763.9 2,895.1 (39)
Total Own Product and Traded Third Party 3,186.3 3,735.6 (15) 9,905.3 11,140.2 (11)

1 Including OCI’s 50% share of Natgasoline volumes

Mosaic Posts 3Q Net loss; Reports Record North America Potash Shipments

Earnings, Featured, News, Potash

The Mosaic Co. reported a third-quarter net loss of $4.2 million, down from net earnings of $841.7 million in last year’s third quarter. Revenues totaled $3.55 billion for the quarter, down 34% from the year-ago $5.35 billion. Adjusted EBITDA was $594 million from the year-ago $1.69 billion.

The current quarter reflected the after-tax impact of notable items totaling $231 million, mainly the impact of a foreign currency transaction loss and an adjustment to asset retirement obligations.

“Our third quarter results highlight the versatility of our business,” said CEO Joc O’Rourke. “Destocking inventories in Brazil early in the year left us well positioned for the second half of 2023 and 2024. As we look ahead, our outlook is positive. Around the world, growers are incentivized to maximize yields through appropriate levels of fertilizer application. As a result, demand for our products has rebounded this year, and we expect robust demand through 2024.”

O’Rourke told analysts that Mosaic’s phosphate and potash shipments in North America were the highest in the last five years. “This was followed by a great summer fill program and a very strong fall application season,” he said. “The last three months through October were a record for Mosaic’s North American potash shipments.”

“We saw similar dynamics play out in Brazil,” he added. “We expect total fertilizer shipments in Brazil to be 43-44 million mt, the second-highest total in history.”

While Mosaic’s results trailed analysts’ expectations, company shares rose 2.6% on Nov. 8, the day after the earnings release, to close at $32.77.

Third-quarter Potash segment operating earnings were $200 million, down from the year-ago $793 million, while adjusted EBITDA dropped to $267 million from $871 million, reflecting the impact of lower prices. The Colonsay mine was restarted in the quarter to help meet strong North American demand during Esterhazy’s planned turnaround in July. The company expects Colonsay to remain up so the company can meet the needs of the North American spring season.

Fourth-quarter potash sales volumes are expected to be in the 2.4-2.6 million range, up from the third quarter’s 2.2 million mt. Fourth-quarter realized mine-gate MOP prices are expected to be in the $235-$260/mt range, down from the third quarter average of $266/mt.

The Phosphate segment reported an operating loss of $58 million in the third quarter, down from the year-ago income of $131 million. Adjusted EBITDA slipped to $201 million from $481 million. The company said the results reflect the impact of lower prices and production impacts following Hurricane Idalia and a power outage disruption in Louisiana that occurred late in the third quarter. These were partially offset by lower raw material costs.

Mosaic expects the Louisiana repairs to be completed in the fourth quarter. President Bruce Bodine said the company had unexpected operational and maintenance issues at two of its larger sulfuric acid plants, which ultimately restricted finished product production during the back half of the year. He said a “large chunk” of that production has just returned to production and the remaining work will be completed by the end of the year.

Mosaic expects fourth-quarter phosphate sales volumes of 1.6-1.8 million mt, approximating the third quarter’s 1.7 million. DAP prices at the plant are expected to average $530-$580/mt, up from the third-quarter average of $487/mt.

Mosaic Fertilizantes reported third-quarter operating income of $77 million, down from the year-ago $323 million, while adjusted EDITDA declined to $147 million from $343 million.

Following inventory restocking that was completed early in the second quarter, Mosaic said the Brazilian unit’s third-quarter distribution margins returned to historically normal levels, averaging $34/mt. It expects further improvement in the fourth quarter to $40-$50/mt.

Looking ahead, Bodine reviewed several company initiatives in Mosaic’s earnings call. He noted the company’s expansion of MicroEssentials capacity at its Riverview, Fla., complex, as well as the investments it has made in Mosaic BioSciences. “We are pushing further into non-commodity value-added Ag products,” he said.

Mosaic is exploring a 100,000 mt purified phosphoric acid plant in Louisiana to serve the lithium iron phosphate (LFP) battery market. The Board of Directors has approved engineering work on the facility and the price tag for the project is put at $500 million.

“In Brazil, Mosaic is already the country’s largest supplier of fertilizer and we are expanding our footprint further, with a 1 million mt distribution facility at Palmerainte in the fast growing northern region in Brazil,” Bodine said.

“In potash, we’re further optimizing our Esterhazy facility by debottlenecking the mills and adding 400,000 mt of very low-cost production,” he added. On top of these, Bodine said Mosaic is also pursuing cost reduction initiatives and operational improvements that should save the company at least $150 million.

Company-wide, Mosaic posted nine-month net income of $799.6 million on net sales of $10.55 billion, down from the year-ago $3.06 billion and $14.64 billion, respectively.

Potash (millions) 3Q-23 3Q-22
Sales Volume (000 mt) 2.2 2.1
Production Volume (000 mt) 1.9 2.3
Gross Margin (million $) 210 799
Operating Earnings (million $) 200 793
Adjusted EBITDA 267 871
Sales (million $) 720 1,400
MOP Selling Price $/mt 266 666



Phosphates (millions) 3Q-23 3Q-22
Sales Volume (000 mt) 1.7 1.7
Production (Finished) Vol. (000 mt) 1.6 1.7
Gross Margin (million $) 88 358
Operating Earnings (million $) (58) 131
Adjusted EBITDA 201 481
Sales (million $) 1,000 1,600
DAP Selling Price $/mt 487 809



Mosaic Fertilizantes (millions) 3Q-23 3Q-22
Sales Volume (000 mt) 3.1 2.8
Gross Margin (million $) 106 348
Operating Earnings (million $) 77 323
Adjusted EBITDA 147 343
Sales (million $) 1,700 2,600
Avg Finished Price (Dest.) 566 931

CHS Reports Record Annual Earnings; Energy Drives Increase, Ag and Nitrogen Production Slip

Earnings, Featured, News

CHS Inc. reported net income of $1.9 billion for the fiscal year ending Aug. 31, 2023, surpassing the previous high, which was the prior year’s $1.7 billion. Revenues were down at $45.6 billion from the year-ago $47.8 billion.

“The support of our member cooperatives and farmer-owners, dedication of our employees, exceptional operational performance, and favorable market conditions enabled us to achieve the strongest earnings in our history during fiscal year 2023,” said Jay Debertin, President and CEO. “As a result, CHS intends to return $730 million in cash patronage and equity redemptions to our member cooperatives and farmer-owners in fiscal year 2024, demonstrating our commitment to sharing profits with the producers, local cooperatives and rural businesses that work with us to help feed people around the world.”

“Our shared success showcases the unique power of the cooperative system to keep adapting and advancing through the uncertainties that can come with agriculture,” he added. “We will continue to collaborate, innovate, and invest to meet the growing global demand for agricultural products. A diversified portfolio, coupled with strategic investments in supply chain capabilities and emerging market opportunities, positions CHS to create a better company for the future and to maximize value for our owners and customers.”

The CHS Energy segment posted earnings of $1.075 billion, up from the year-ago $616.6 million. CHS cited a significant increase in refined fuels income due to higher refining margins and favorable pricing of heavy Canadian crude oil, partially offset by the impact of decreased production volumes at its Montana refinery due to major planned maintenance. The segment also saw higher margins for its propane business, which was attributed to favorable market conditions.

Earnings from the Ag segment were off 37%, to $411.8 million from $657.6 million. CHS cited decreased margins for wholesale and retail agronomy products, which experienced market-driven price declines compared to historically high prices in the previous year. 

Lower margins for ethanol were reported as market prices declined, and there was a negative impact of mark-to-market adjustments on grain and oilseeds. However, margins increased in the oilseed processing business, bolstered by strong meal and oil demand.

Nitrogen Production earnings were off 45%, to $260.8 million from the year-ago $478 million. This reflected lower equity income from the CHS investment in CF Nitrogen attributed to decreased market prices for urea and UAN.

As for the $730 million in patronage, CHS had reported that figure back in September and at that time said it would be split $365 million in cash patronage and $365 million as equity redemptions (GM Sept. 15, p. 26). The $730 million patronage was down from the prior year’s $1 billion, which included $500 million each as cash equity and equity redemptions. 

In total, CHS said it will have returned some $3.2 billion to its owners over the past 10 years.

Itafos 3Q Income Off 62%; MAP, NH3 Contracts Inked; Rock Production Resumes in Brazil

Brazil, DAP/MAP, Earnings, Featured, News, Phosphate

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.