Compass 4Q Earnings Off; Fertilizer Volumes Up 23 Percent

Compass Minerals, Overland Park, Kan., reported a 42 percent drop in net earnings for the fourth-quarter ending Dec. 31, 2020, to $32.3 million ($0.94 per diluted share) on sales of $421.1 million, down from the year-ago $56.1 million ($1.63 per share) and $500.3 million, respectively.

However, full-year earnings were off only 5 percent, to $59.5 million ($1.72 per share) on sales of $1.37 billion from 2019’s $62.5 million ($1.81 per share) and $1.49 billion, respectively.

Compass pointed to higher costs associated with its Plant Nutrition North America segment and revenue and expense impacts associated with COVID-19. In addition, it cited the continued devaluation of the Brazilian real with respect to its South American business and weak winter weather with respect to Salt.

The North American fertilizer segment saw a 47 percent drop in fourth-quarter operating earnings to $7.9 million on sales of $88.7 million, down from the year-ago $14.8 million and $76.5 million, respectively. However, fertilizer sales volumes were up 23 percent to 144,000 st from the year-ago 117,000 st, though prices were off 6 percent, with the average selling price at $617/st, down from $655/st.

Full-year fertilizer volumes were up 21 percent, to 383,000 st from 2019’s 317,000 st. Average price dropped to $626/st from $651/st. The company reported the average sulfate of potash (SOP) price as $566/st.

Full-year North American fertilizer operating earnings were $12.1 million on sales of $239.6 million, down from $22.5 million and $206.2 million, respectively.

Going forward, Compass expects first-half North American fertilizer revenue of $90-$110 million, with EBITDA of $20-$30 million. Full-year volume guidance is 350-380,000 st.

Plant Nutrients North America 4Q-20 4Q-19 2020 2019
Sales ($/M) 88.7 76.5 239.6 206.2
Operating Earnings ($/M) 7.9 14.8 12.1 22.5
EBITDA ($/M) 17.6 25.9 52.5 67.1
Sales Volumes (000 st) 144 117 383 317
Avg Sales Price ($/st) 617 655 626 651
Plant Nutrients South America 4Q-20 4Q-19 2020 2019
Sales ($/M) 101.4 110.3 344.1 385.1
Operating Earnings ($/M) 16.1 18.5 40.3 40.0
EBITDA ($/M) 20.7 24.2 59.1 63.1
Ag Sales Volumes (000 st) 142 125 485 452
Chem Sales Volumes (000 st)    82 92 339 338
Total Sales Volumes (000 st) 224 217 824 790
Avg Ag Sales Prices ($/st) 594 708 562 655
Avg Chem Prices ($/st) 208 243 212 264
Avg Sales Price ($/st) 453 510 418 488