Compass Minerals reported 2014 net earnings of $217.9 million ($6.44 per diluted share) on sales of $1.28 billion, up from 2013’s $130.8 million ($3.88 per share) on sales of $1.13 billion. However, a one-time insurance recovery of $60.6 million after tax, as a result of the 2011 tornado at the Goderich, Ont., salt mine, brought the adjusted 2014 figure down to $162.4 million ($4.79 per share), still ahead of 2013.
Compass also announced last week that its board has approved an expansion of its Ogden, Utah, facility to add a second crystallizer and improve its compaction abilities there. “Once these investments are completed in 2016, we’re expecting to meaningfully increase our production of SOP both from pond-based feedstock and KCL conversion,” CEO Fran Malecha told analysts.
Other Plant Nutrition initiatives include the April 2014 purchase of Wolf Trax®, the repositioning of its sulfate of potash as branded Protassium+, and the introduction of a new phosphate/micronutrient product.
Plant Nutrition 2014 operating earnings were $74.8 million on sales of $270.2 million, up from the year-ago $58.7 million and $198.6 million, respectively. Sales volumes moved up to 396,000 st from 315,000 st, with average prices up at $682/st from $630/st. Higher production levels were reported at the Ogden, Utah, site in 2014, though those levels are not expected to be sustained in 2015. As it did in 2014, Compass expects to supplement SOP production with purchased potash. Even with purchased KCL feedstock in 2014, Compass said its per unit cost went down to $421/st from 2013’s $456/st. However, it expects additional feedstock costs to boost its cost for the full year 2015 by $100/st.
Salt 2014 operating earnings were $291.4 million on sales of $1 billion, up from the year-ago $181.3 million and $920.5 million, respectively. Average prices were up at $75.44/st on volumes of 13.29 million st, an increase from 2013’s $69.39/st and 13.26 million st, respectively.
Compass-wide fourth-quarter earnings were $80.5 million ($2.38 per share) on sales of $433.4 million, up from the year-ago $58.4 million ($1.73 per share) and $387.4 million, respectively.
Fourth-quarter Plant Nutrition earnings were $21.6 million on sales of $75.8 million, up from the year-ago $19.7 million and $61.4 million, respectively. Sales volumes were 105,000 st, up from 98,000 st, while average prices were $719/st, up from the year-ago $626/st. On a straight SOP comparison, absent Wolf Trax, the fourth-quarter price was $681/st.
Fourth-quarter Salt earnings were $104.4 million on sales of $355.3 million, up from the year-ago $74.8 million and $323.1 million, respectively. Average prices were $83.13/st on volumes of 4.27 million st, versus the year-ago $67.6 million and 4.78 million st.
Going forward, Compass is expecting first-half Plant Nutrition sales of 180-200,000 st, with average selling prices of $750-$780/st. Full-year volumes are put at 390,000-420,000 st. Selling prices are expected to benefit from a $50/st increase in SOP postings, effective Jan. 1, 2015, as well as traditionally higher Wolf Trax prices, though as noted elsewhere (see pg. 1), the company said that California port disruptions have delayed its Wolf Trax shipments, negatively impacting average selling prices.
Salt projections for the first half are fairly conservative at 5.5-6 million st at an average of $74-$78/st, with full-year sales expected at 12-13 million st. The company noted that while it has been seeing good movement in the North, demand has been off in its Southern markets.
The Compass board has approved a 10 percent increase in the quarterly dividend, to $0.66 per share. It is the 12th consecutive annual increase in the dividend. The company expects 2015 earnings growth, with EPS of $5.10-$5.60.