All posts by mickeybarb@charter.net

AdvanSix Reports Record Sales and Earnings for 2022; AS Takes Larger Share of Sales

Ammonium Sulfate, Earnings, News, Northeast

AdvanSix reported record full-year sales, earnings, and cash flow. Net income was $171.9 million on sales of $1.95 billion, up from 2021’s $140 million and $1.68 billion, respectively. Adjusted EBITDA moved up to $308.5 million from $267 million.

The company said a 15% sales increase versus the prior year was driven by 20% favorable impact of market-based pricing, 2% higher raw material pass-through, and 4% contribution from acquisitions, offset by 10% lower volume.

Ammonium sulfate sales in 2022 represented 33%, or $629 million, of total company sales, versus 24%, or $401.1 million, in 2021.

“In 2022, AdvanSix built upon our track record of performance with earnings growth for the third consecutive year,” said Erin Kane, President and CEO of AdvanSix. “We continue to progress our core strategies, and in the fourth quarter our strong commercial performance helped to offset pockets of soft end market demand, customer destocking, and operational challenges. Cash flow generation was robust in the quarter, as well supporting disciplined and value-accretive capital deployment. Our additional $75 million share repurchase authorization reinforces the flexibility we’ve built into our capital allocation strategy.”

Fourth-quarter net income was $33.6 million on sales of $404.1 million, up from the year-ago $23.6 million and $424.1 million, respectively. Adjusted EBITDA was $66.6 million, up from $52 million. The company said sales were off 5% as sales volumes decreased approximately 15% driven by soft end-market demand and customer destocking.

It said raw material pass-through pricing was unfavorable by 4% following a net cost decrease in benzene and propylene. It said market based pricing was favorable by 10% from the prior year, primarily driven by higher ammonium sulfate pricing. Acquisitions contributed 4% to sales.

Ammonium sulfate sales represented 34%, or $136.7 million, of fourth-quarter company sales, versus the year-ago 28%, or $117.2 million.

Going forward, AdvanSix expects strong underlying agriculture and fertilizer industry fundamentals to continue. While the company expects balanced supply and demand conditions for North American acetone, it expects headwinds in consumer durables and building and construction end markets across nylon and other chemical intermediates.

AdvanSix expects the pre-tax income impact of planned plant turnarounds to be $28-$33 million in 2023, versus approximately $50 million in 2022. The company expects to spend about $3 million on turnarounds in the first quarter and $25-$30 million in the third quarter.

“With our diverse product portfolio, continued strong agricultural and fertilizer industry fundamentals, and the resilience of our business model, AdvanSix is well positioned for another year of differentiated performance in 2023,” said Kane. “While we anticipate the challenges of an uncertain environment to impact several end applications within our nylon and chemical intermediates product lines, we remain confident in our demonstrated ability to perform through various business and macroeconomic cycles.

“We have structurally improved the earnings power of this business and are targeting a return to higher plant production rates in 2023 to complement our strong commercial performance,” she added. “Our healthy balance sheet will serve us well, and continues to support our ability to deploy capital and maximize shareholder value.”

Uralchem Buys Brazil Fertilizer Blender

Brazil, News, News Briefs, Russia

Russian fertilizer group Uralchem JSC has finalized a deal to buy Brazilian fertilizer blender Adubos Vera Cruz Ltda. The deal was finalized at the end of January, according to Uralchem CEO Dmitry Konyaev in a Feb. 10 interview with Bloomberg.

It is understood that the negotiations have been ongoing for some while.

According to the UK’s Financial Times, the deal was announced publicly on Dec. 28 last year, and may have been done via potash producer Uralkali PAO, which is owned by Uralchem. But it is unclear if Uralchem/Uralkali bought 100% of Adubos Vera Cruz’s shares.

The transaction value has not been disclosed.

A spokesperson for Adubos Vera Cruz confirmed to Bloomberg that the company had been sold, but declined to provide further comment.

Founded in 1941, and located in the city of Ibaté, São Paulo state, Adubos Vera Cruz – until the sale – was a family-owned company, with the Financial Times listing the company’s managing partner since July 1986 as Henrique Duchene, and Eliana Aparecida Tangerino Duchene as a partner since December 2012.

Adubos Vera Cruz does not list its fertilizer blending capacity on its website, but indicates that as of 2018 it had storage capacity of 61,000 mt of fertilizers. Russia historically has been among its product import sources, according to media reports, but this could not be confirmed by Green Markets.

Konyaev told Bloomberg that the acquisition of the Brazilian fertilizer blending company comes as Uralchem seeks out new markets amid concern among European buyers about sanctions. Russian fertilizers are exempt from European Union and US sanctions targeting the Vladimir Putin regime, but many buyers are wary of buying Russian product.

The Uralchem CEO told Bloomberg that the company lost sales in Europe and of course needs to place its volumes, and wants to have a stronger presence in a major agricultural fertilizer market, such as Brazil.

Konyaev expects to move up to half-a-million mt through Adubos Vera Cruz, selling its own volumes through the blending company instead of the company buying from different sources.

Uralchem has had plans to expand its presence in Brazil for a long time, dating back well before Russia’s invasion of Ukraine in February last year.

Uralchem and Uralkali in 2019 pursued a deal to buy a controlling stake in Brazilian fertilizer company Fertilizantes Heringer SA in Viana, Espirito Santo state.

But their plans bit the dust after protracted negotiations between the Russian companies and Heringer’s controlling shareholder, Heringer Participações Ltda., fell apart (GM Jan. 10, 2020). Brazil’s antitrust regulator Cade’s superintendence had approved the deal without restrictions (GM Jan. 3, 2020).

A Uralchem spokesperson, in response to Green Markets’ inquiries about the Adubos Vera Cruz acquisition, said that Uralchem was not ready to disclose further information on the acquisition at this time. GM’s inquiries included information about Adubos Vera Cruz’s current blending capacity and any plans Uralchem had for expansion of that capacity.

CF Beats Analysts on 4Q Income, Misses on Revenues, Adj. EBITDA; Significant Demand Expected Soon

Ammonia, Ammonium Nitrate, Earnings, Eastern Cornbelt, Featured, News, UAN, Urea

CF Industries Holdings Inc. reported fourth-quarter net income attributable to common shareholders of $860 million, exceeding the Wall Street projection (Bloomberg Consensus) of $828 million, and the company’s year-ago $705 million. Company sales of $2.61 billion missed analysts $2.85 billion estimate, but were ahead of the year-ago $2.54 billion. Adjusted EBITDA was $1.3 billion, up from the year-ago $1.26 billion, but below analyst projections of $1.39 billion.

CF missed analyst estimates on all three major categories (GM Feb. 10, p. 1) for full-year figures. Net earnings were $3.35 million on sales of $11.2 billion, up from the year-ago $917 million and $6.54 billion, respectively. Adjusted EBITDA was $5.9 billion, up from $2.74 billion.

“The CF Industries team delivered outstanding results in 2022, producing record financial performance for the fourth quarter and full year by working safely, operating our manufacturing and distribution assets extremely well, and serving our global customer base,” said CF President and CEO Tony Will. “At the same time, we drove significant progress across our clean energy and strategic initiatives by entering into our landmark carbon capture and sequestration partnership with ExxonMobil, commencing a front-end engineering and design study for our proposed blue ammonia plant in Louisiana, and being selected for advanced discussions with JERA Co. Inc., for the first significant volumes of ammonia as a clean energy source.

“Looking ahead, we believe that the global nitrogen supply-demand balance and global energy cost structure will continue to present attractive margin opportunities for our cost-advantaged network,” he continued. “As a result, we expect to drive strong cash generation in the years ahead, enabling us to make disciplined investments in our clean energy initiatives to meet what we believe will be significant global demand for low-carbon ammonia while we continue to return substantial capital to shareholders.”

CF projects 2023 gross ammonia production of 9.5 million st, down from 2022’s 9.8 million st. The fourth-quarter’s 2.44 million st was level with year-ago production.

CF expects to continue to export Donaldsonville ammonia to its Billingham plant in the UK for upgraded products until it sees better margin advantages. It estimates that some 20-30% of European ammonia capacity is currently curtailed.

CF said while nitrogen supplies were tight in first-quarter 2022, they loosened in the fourth quarter due to weak industrial demand in Europe and Asia, delayed purchasing in the agriculture sector, and a partial recovery of European ammonia operating rates. However, with spring application approaching in the Northern Hemisphere, CF believes substantial agriculture demand will emerge, supporting global nitrogen prices. CF said North American farm economics are expected to remain positive in 2023 supported by strong crop prices. It projects 91-93 million acres of corn in the US.

“Over the last two weeks, we have seen retailers and wholesalers begin to step back into the market at attractive price levels,” Bert Frost, CF Senior Vice President of Sales, Market Development and Supply Chain, told analysts. “The decrease in global nitrogen pricing has improved farmer economics dramatically and should spur demand globally that was discouraged at higher prices. We expect significant demand to emerge in North America in the coming weeks as the value chain moves into catch-up mode that will likely last into and through the second quarter.”

Frost cited lower inventories at the farm and retail level due to the extent of the fourth-quarter 2022 and first-quarter 2023 purchasing slowdown. He added that for the current fertilizer year, nitrogen exports are significantly higher, while imports are lower.

The company believes Brazil urea imports will remain strong due to high crop prices, increases in planted acres, and improved farm income levels.

CF expects India to remain a major urea importer in 2023, though it noted that overall imports may be down due to increased domestic production.

A higher-than-normal level of nitrogen imports are expected into Europe, according to CF, due to lower-than-normal ammonia operating rates.

On a long-term basis, CF said the global supply-demand balance will remain tight into at least 2025 due to agriculture-led demand and forward energy curves that point to challenging production economics for producers in Europe and Asia. Even though energy prices have recently compressed, said CF, Europe and Asia’s prices remain well above historical levels.

Under current measures, CF believes Chinese urea exports will be 2-3 million mt versus 2.8 million in 2022. However, it said if government restrictions are loosened, they could grow to 3-5 million mt.

While ammonia from Russia was significantly lower in 2022 due to the situation with the pipeline to the port of Odessa, it said other Russian nitrogen exports were at near-normal levels.

Production (000 st) 4Q-22 4Q-21 2022 2021
Ammonia        2,441 2,452 9,807 9,349
Gran Urea 1,143 984 4,561 4,123
UAN 32 1,827 2,135 6,706 6,763
AN 355 390 1,517 1,646
Ammonia 4Q-22 4Q-21 2022 2021
Net Sales ($/M) 804 778 3,090 1,787
Gross Margin ($/M) 388 291 1,599 625
Sales Volumes (000 st) 895 1,180 3,300 3,589
Avg Selling Price ($/st) 898 659 936 498
Gas Costs ($/mmBtu) 6.88 6.00 7.18 4.21
Gran Urea 4Q-22 4Q-21 2022 2021
Net Sales ($/M) 605 662 2,892 1,880
Gross Margin ($/M) 301 375 1,564 888
Sales Volumes (000 st) 1,033 1,018 4,572 4,290
Avg Selling Price ($/st) 586 650 633 438
UAN 4Q-22 4Q-21 2022 2021
Net Sales ($/M) 845 732 3,572 1,788
Gross Margin ($/M) 458 372 2,083 669
Sales Volumes (000 st) 1,690 1,838 6,788 6,584
Avg Selling Price ($/st) 500 398 526 272
AN 4Q-22 4Q-21 2022 2021
Net Sales ($/M) 189 151 845 510
Gross Margin ($/M) 50 13 248 35
Sales Volumes (000 st) 367 374 1,594 1,720
Avg Selling Price ($/st) 515 404 530 297
Other 4Q-22 4Q-21 2022 2021
Net Sales ($/M) 165 217 787 573
Gross Margin ($/M) 59 104 367 170
Sales Volumes (000 st) 479 569 2,077 2,318
Avg Selling Price ($/st) 344 381 379 247

RWE, Lotte Join Mitsubishi in Plans to Develop Giant Corpus Christi Clean Ammonia Complex

Ammonia, Blue Ammonia, Featured, Germany, News, South Korea, Texas

Germany’s RWE Supply & Trading, Essen, a multinational utility company, and South Korea’s Lotte Chemical Corp., Seoul, have signed a Joint Study Agreement (JSA) with Mitsubishi Corp., Tokyo, to develop a large-scale integrated clean ammonia production and export project at the Port of Corpus Christi, Texas.

The three announced the signing of the JSA on Feb. 8 to form a strategic alliance to jointly develop large-scale clean ammonia (green and blue ammonia) supply chains in Asia, Europe, and the US.

Under the JSA, the partners agreed to jointly study the development of a large-scale ammonia facility that integrates green and blue ammonia production and leverages common infrastructure for international exports with a focus on Asia and Europe. The partners target first production by 2030 and a phased build-out of production capacity with multiple production units.

In the final build-out stage the project is envisaged to produce up to 10 million mt/y of clean ammonia. The land required for the project is under discussion with the Port of Corpus Christi Authority. The partners are bringing together complementary expertise to develop the project.

Bloomberg reported last fall that Mitsubishi was considering the development of the world’s largest ammonia production plants at Corpus Christi (GM Sept. 30, 2022).

The parties said the JSA complements other preliminary efforts to develop large-scale clean ammonia projects including the South Texas region.

In the meantime, the Port of Corpus Christi is getting ready for blue and green ammonia development. On Feb. 1 it announced that it was awarded $16.4 million through the US Department of Energy’s (DOE) Carbon Storage Assurance Facility Enterprise initiative to evaluate the technical and economic feasibility of permanently storing captured carbon dioxide from industrial operations. It said it was the only recipient of CarbonSAFE funding in Texas and received the largest total award of those announced by DOE.

In addition, in January the Port was notified by DOE that it was being encouraged to submit a full application for its Horizons Clean Hydrogen Hub (HCH2) though DOE’s Regional Clean Hydrogen Hubs Program.

Last August, the Port approved a lease agreement with Buckeye Partners LP that will establish the first solar farm in the 100-year history of the Port. The 81,000+ panel project will be located in San Patricio County on Port of Corpus Christi property near Midway Junction.

All three JSA partners are already heavily involved in blue and green ammonia and/or hydrogen development. In addition to the Corpus Christi plans, Mitsubishi announced in 2021 that it was eyeing the development of a 1 million mt/y blue ammonia plant between Donaldsonville, La., to the west of Houston (GM Sept. 24, 2021), as well as a smaller project in Alberta.

In addition, Mitsubishi has signed to take up to 40% of the blue ammonia from a proposed Nutrien Ltd. ammonia plant in Geismar, La. (GM May 20, 2022). The company has been in the ammonia trading business since the late 1960’s and is currently the indirect shareholder of PT Panca Amara Utama (PAU), which is responsible for a 700,000 mt/y ammonia plant in Indonesia.

RWE announced plans to build an ammonia import terminal in Brunsbüttel, Germany by 2026. It said it is driving forward with more than 30 green hydrogen projects. It recently signed a Memorandum of Understanding with Namibia’s Hyphen Hydrogen Energy, Windhoek, for supply of up to 300,000 mt/y of green ammonia from 2027 (GM Dec. 9, 2022), and it is looking at bringing green hydrogen/ammonia to Europe from Australia (GM April 23, 2021).

Lotte has signed a deal with Japan’s Itochu, Tokyo, to jointly invest in ammonia production facilities (GM July 29, 2022) and has inked an offtake agreement to take green ammonia from Trammo Inc. (GM Sept. 17, 2021). In late 2022, it partnered with six other companies to build a clean ammonia supply chain in the West Sea region of Korea. Lotte said it plans to invest $3.6 billion by 2030 to produce 1.2 million mt/y of clean hydrogen, and hopes to make annual revenue of $3.6 billion from its hydrogen and ammonia business.

Landus Conduit LLC – Management Brief

Management Briefs, Western Cornbelt

Landus Conduit LLC, Des Moines, on Feb. 7 announced that John Schmahl has been named Director of Strategic Partners. The company said he brings a wealth of experience in the agricultural start-up space and relationships with potential up- and downstream partners.

Schmahl joins Landus Conduit after nearly five years in the startup world with Indigo and Farmers Edge, where he was responsible for the US strategic accounts and managed sales teams across the Eastern US. Prior to that, he gained experience from all sides of production agriculture and retail during his time with Monsanto, Cargill, and Winfield United.

The primary function of Conduit, launched by Landus in November 2022 (GM Nov. 23, 2022), is to cultivate relationships and partnerships benefiting Landus farmer-owners outside of the traditional boundaries in which Landus currently operates.

“Landus Conduit is a key connector to the growth and value of Landus for our farmer-owners where we seek to find new opportunities without the historical costs of brick-and-mortar buildings,” said Landus President and CEO Matt Carstens. “Supplementing Conduit’s ambitions with someone like John, who has experience in the startup environment, brings us a network of skills needed to be successful as we build out our global footprint.”

“The addition of John makes a substantial difference to how we approach partnerships in areas where Landus doesn’t currently do business,” added Bruce Vernon, who leads Landus Conduit. “Having him on board builds our connections outside the Midwest region and beyond.”

The company said the expansion of the customer base goes beyond neighboring regions to farmers outside the US. Landus currently employs more than 600 people across the Midwest and Mexico.

Uniper Eyes Green Ammonia Offtake Agreement with India’s Greenko

Germany, Green Ammonia, India, News, News Briefs

Uniper, Dusseldorf, Germany, an international energy company with activities in more than 40 countries, and Greenko ZeroC Private Ltd., the green molecule production arm of the India’s Greenko Group, New Delhi, on Feb. 7 announced the signing of a Memorandum of Understanding (MOU) and Heads of Terms for Uniper to enter into exclusive negotiations for the offtake of green ammonia from Phase 1 of Greenko ZeroC’s ammonia production facility in Kakinada, India.

Greenko and Uniper intend to negotiate a pricing, supply, and tenure structure for a supply and purchase agreement for 250,000 mt/y of green ammonia based on the Heads of Terms.

Greenko’s Kakinada project is a multi-phase green ammonia production and export facility adding up to 1 million mt/y of green ammonia production capacity by 2027. The first phase of Greenko’s facility will produce green ammonia based on an electrolyzer powered by Round the Clock (RTC) renewable electricity produced by 2.5 GW of renewable assets in India and reinforced by their Pinnapuram Integrated Renewable Energy Storage Plant (IRESP).

Greenko said the key differentiator that sets this project apart is the integration of a pumped storage plant to balance out the intermittent and seasonality of renewable production and achieve a high annual plant load factor upwards of 85%, allowing for flexible and dispatchable supply of green ammonia.

Uniper and Greenko also intend to collaborate on the deployment of similar flexible renewable electricity to other hydrogen products such as e-methanol and sustainable aviation fuels.

Greenko touts itself as India’s leading energy transition company, and reports installed capacity of 7.5 GW across solar, wind, and hydro assets spread over ~100+ projects across 15 states and delivers 20+ TWh of renewable energy annually, constituting ~1.5-2% of India’s total electricity consumption.

Uniper is already heavily involved with other green projects, including plans to collaborate on a joint study with Air Liquide, Chevron, and LyondellBasell that will evaluate and potentially advance the development of a hydrogen and ammonia production facility along the US Gulf Coast (GM Oct. 21, 2022).

Another project is with ConocoPhillips and JERA Americas Inc., a unit of Tokyo’s JERA Inc., a collaboration to facilitate the development of a US Gulf-based clean ammonia plant with initial production of 2 million mt/y, and expansion potential up to 8 million mt/y (GM Sept. 9, 2022).

Uniper has also signed a Memorandum of Understanding (MOU) to purchase 500,000 mt/y of green ammonia from EverWind Fuels Co., Halifax, Nova Scotia, a private developer of green hydrogen and ammonia (GM Aug. 26, 2022). The ammonia will come from EverWind’s production facility in Point Tupper, Nova Scotia, a multi-phase green hydrogen and ammonia production and export facility, which is in advanced stages of development and is expected to reach commercial operation in early 2025, the first in Atlantic Canada.

The German utility is also studying a green hydrogen project, H2Maasvlakte, at the Port of Rotterdam in the Netherlands, with the aim of making the port both a green hydrogen production point, as well as a major import hub (GM Oct. 14, 2022).

Uniper plans a German national hub for hydrogen in Wilhelmshaven, which will include an import terminal for green ammonia (GM April 16, 2021). Along with Dutch Vesta Terminals BV, Ulrecht, The Netherlands, it is evaluating the feasibility of refurbishing and expanding an existing storage facility at Vlissengen, the Netherlands, with the aim to create the first green ammonia hub, “Greenpoint Valley,” in Northwest Europe (GM Sept. 16, 2022).

Analysts See Stellar Full-Year Adj. EBITDA for CF, Nutrien, Mosaic; 4Q Stalls

Ammonia, Ammonium Nitrate, Earnings, Eastern Cornbelt, Featured, News, Nitrogen, Phosphate, Potash Muriate, Saskatchewan, Tampa, UAN, Urea

CF Industries Holdings Inc., Nutrien Ltd., and The Mosaic Co. are all expected to have stellar adjusted EBITDA for the year-ending Dec. 31, 2022, versus 2021 figures, according to the Bloomberg Consensus, the average estimate from major analysts. The annual figure for CF is expected to double, with fourth-quarter up 10%.

Mosaic’s full-year adjusted EBITDA is estimated to be up 78% from 2021, while fourth-quarter results are expected to be flat with year-ago levels. Nutrien results are seen as being up 77% versus 2021, with the fourth-quarter level with year-ago.

Many analysts are keeping a close watch on fourth-quarter volumes. CF is expected to see a fourth-quarter drop in ammonia and UAN volumes, according to the analysts, with other products flat to up slightly. On the wholesale level, they project Nutrien will report drops in both potash and phosphate volumes, with an overall uptick in nitrogen. They also see a potash and phosphate drop for Mosaic with Mosaic Fertilizantes level with year-ago volumes.

CF and Nutrien will report results after market close on Feb. 15, with Mosaic’s out on Feb. 22.

CF 4Q-22 4Q-21 2022 2021
Adj. EBITDA 1.39 1.26 5.96 2.74
Revenues 2.85 2.54 11.4 6.54
Net Income .828 .705 3.37 .917
Sales Volumes        
Ammonia 1.07 1.18 3.47 3.6
Granular Urea 1.02 1.02 4.56 4.3
UAN 1.69 1.84 6.8 6.6
AN .376 .374 1.62 1.72
Other .581 .569 2.2 2.32
Mosaic 4Q-22 4Q-21 2022 2021
Adj. EBITDA 1.21 1.22 6.4 3.6
Revenues 4.24 3.84 18.9 12.3
Net Income .700 .665 3.85 1.63
Sales Volumes        
Potash 1.97 2.1 8.2 8.2
Phosphate 1.65 1.8 6.63 7.7
Mosaic Fertilizantes 2.3 2.3 9.22 10.1
Nutrien 4Q-22 4Q-21 2022 2021
Adj. EBITDA 2.47 2.46 12.6 7.13
Revenues 7.6 7.3 37.6 27.7
Net Income 1.36 1.21 7.84 3.18
Sales Volumes – Wholesale        
Potash 2.7 3.06 12.6 13.6
Nitrogen 2.93 2.83 10.4 10.73
Phosphate & AS .666 .711 2.5 2.62

*Financials are in $ billions, volumes in millions of tons.

Compass Shares Drop on Weaker Fert Outlook

Earnings, News, Southern Plains, Specialty, Sulfate of Potash

Shares of Compass Minerals fell as much as 16% on Feb. 8, the largest intraday drop since last May, after lowering its outlook for its Plant Nutrition segment and reporting weakening fertilizer demand. In addition, the company’s adjusted EBITDA of $61.8 million missed the Bloomberg Consensus, the average estimate from major Wall Street analysts, which was $74.6 million. Sales of $352.4 million missed analyst estimates of $378.5 million.

Compass now sees Plant Nutrition’s fiscal year 2023 revenue as $155-$225 million, down from the previous outlook of $200-$240 million. Segment EBITDA is now put at $30-$60 million, down from $55-$70 million.

Compass said the full-year outlook for the segment has declined and widened from its prior guidance range, reflecting lower full-year sales volumes than previously assumed based on year-to-date trends, heightened uncertainty regarding prices, and higher production costs. Sales volumes guidance is 205,000-270,000 st.

Fertilizer sales volumes for the first quarter ending Dec. 31, 2022, were off 46%, to 45,000 st from the year-ago 83,000 st, though prices were up 40% to average $924/st from $660/st. Revenues fell 24%, to $41.6 million from the year-ago $54.6 million.

For the volume decline, the company cited the recent drought conditions in California, its largest market for sulfate of potash (SOP), as well as grower expectations of lower future prices that caused many customers to rescind or defer normal levels of fertilizer purchases. This was followed by torrential rains and flooding in the second fiscal quarter that have created considerable uncertainty regarding whether application rates resembling historical levels will be realized this spring.

In addition, per-ton distribution costs increased 19%, reflecting increased fuel rates and fewer sales volumes to absorb fixed expenses. Operating costs increased 26% over the comparable quarter in the prior year, due primarily to the inflationary environment over the past twelve months. Production costs are anticipated to be higher as a result of increased natural gas prices at the company’s Ogden, Utah, facility driven by supply and demand dynamics in that geography.

Compass expects SOP production volumes at Ogden to be flat in fiscal 2023, as the 2022 evaporation season was impacted by less than favorable weather conditions. However, the company stressed that first-quarter sales volumes were driven by lower demand, not production challenges. “In fact, we were and continue to be prepared to service average customer demand, if and when it improves,” Compass President and CEO Kevin S. Crutchfield told analysts.

Despite the declines in volumes and revenues, Plant Nutrition still posted an increase in operating earnings at $11 million, up from the $9.5 million and EBITDA at $19.3 million versus $18.3 million.

“Compass Minerals is off to a mixed start in fiscal year 2023,” said Crutchfield. “While we saw improved results within our Salt business and made progress on our strategic priorities, weak demand in our Plant Nutrition segment and cost pressures are tempering our financial performance and outlook.” He added that consolidated sales revenue, operating earnings, and adjusted EBITDA for the quarter all increased year-over-year.

Compass reported a first-quarter net loss of $300,000 on sales of $352.4 million, down from the year-ago $2.4 million and $331.5 million, respectively. Operating earnings were up at $27.9 million from $20.4 million.

Compass touted adjusted EBITDA from continuing operations of $61.8 million versus the year-ago $58.4 million. However, if discontinued operations were included the year-ago figure was $67 million, reflecting a decrease for this year.

Compass reported progress on new products. It said Fortress North America, a next-generation fire-retardant company in which Compass has a 45% stake, announced that two of its aerial products have been added to the US Forest Service’s Qualified Product List.

In the lithium business, the company closed the gross $252 million strategic equity investment by Koch Minerals & Trading LLC, with $200 million of the proceeds expected to fund the first two years of phase-one lithium development, and the remaining proceeds used to pay down debt during the quarter.

As for the lithium brine source at the Ogden facility, Compass said it remains on track to complete the pre-feasibility engineering estimate by the end of fiscal 2023 second quarter.

Fertilizers Europe – Management Brief

Denmark, Europe, Management Briefs

Fertilizers Europe, the Brussels-based European producers’ organization, announced that Director-General Jacob Hansen is stepping down from the position and will leave at the end of this month.

Hansen, who is returning to his native country of Denmark, has held the position for 12 years and worked a total of 25 years in the agri-food sector in Brussels.

He said he intends to “use his extended experience of European Union and the institutions of Brussels, especially the European Parliament and the European Commission,” in Denmark.

AmmPower Corp. – Management Brief

Management Briefs

Clean technology developer AmmPower Corp. appointed Greg Barranger to the position of Vice President of its Independent Ammonia Making Machine™ (IAMM™) Division, effective Feb. 2, 2023. He was previously General Manager of the division and led his team to design AmmPower’s 4 mt/d, green ammonia IAMM™ unit.

“Mr. Barranger has done an outstanding job of bringing the IAMM™ Unit product to life,” said Dr. Gary Benninger, AmmPower CEO and Executive Chairman. “The IAMM™ concept of economical, distributed, green ammonia production is a major disruptor in the way ammonia is produced and transported.”