The Mosaic Co. announced Oct. 3 that Fritz Corrigan, 64, president and CEO, has decided to retire Jan. 1, 2007. James Prokopanko, 53, currently Mosaic’s executive vice president and chief operating officer, will succeed Corrigan.
“I’ve had a wonderful career that has spanned over 40 years in the agribusiness industry,” said Corrigan. “I’ve had the great privilege of launching Mosaic and serving as its founding CEO, an exciting culmination to my 38-year career at Cargill. As we approach the two-year anniversary of the formation of Mosaic, I’m ready to turn the reins over to Jim Prokopanko. Our integration is all but complete, and a solid foundation for this organization has been established. My family has been incredibly patient with me during the launch of Mosaic, and I’m looking forward to spending more time with them and pursuing my other interests in the months ahead.”
Corrigan will remain on Mosaic’s board through its 2007 annual meeting, and will provide transition consulting through October 2007.
Prokopanko joined Mosaic in July as chief operating officer. He previously served as corporate vice president for Cargill Inc. and platform leader for its U.S. AgHorizons, Canada AgHorizons, and United Kingdom Frontier Agriculture businesses, and he also headed Cargill’s global corporate procurement organization.
In other news, Mosaic announced on Oct. 3 that it had first quarter earnings of $109 million ($.25 per share) for the period ending Aug. 31, 2006, on sales of $1.29 billion, versus the year-ago $76.1 million ($.18 per share) and $1.4 billion.
Much of the positive income news for the quarter came from income tax benefits and arbitration. The company received a $39 million tax benefit due to reduced taxes in Canada. It also had a $15.7 million pretax benefit due to a favorable arbitration award.
Mosaic noted that its operating earnings declined from $192 million to $131.6 million, primarily due to unrealized mark-to-market gains of $0.6 million versus the year-ago $61.3 million.
Potash operating earnings were $60.8 million on sales of $290.1 million, versus the year-ago $98.5 million and $267.7 million, respectively. Volumes were up 4 percent, to 1.7 million mt. The earnings decline was attributed to a 6 percent decline in potash prices and a $30.7 million unfavorable year-over-year change in mark-to-market adjustments. The average potash price was down $8/mt, to $129/mt. Potash shipments received a significant boost in August with the resumption of shipments to China.
Phosphates had operating earnings of $82.9 million on sales of $789 million, versus the year-ago $106.9 million and $856 million, respectively. Volumes for feed and fertilizer shipments were 2.6 million mt, down 400,000 mt from year-ago levels. There was a $30.1 million unfavorable year-over-year change in mark-to-market adjustments. The average DAP price was up 5 percent, to $251/mt.
Mosaic says both potash and phosphate volumes are expected to improve in the second quarter, both in the domestic and international market. In a call with analysts, the company noted a recent Doane’s survey that indicated a possible 85 million acres of corn in the U.S. in 2007. In addition, Mosaic cited rising grain prices, increased ethanol production, falling energy prices, and diminished phosphate levels in the soil as reasons for optimism.
Mosaic cautioned that sales for the fall in the domestic market have been disappointing. It said higher sales volumes will be crucial in order for it to reach the operating earnings improvement goal of $100 million for the phosphate business segment for fiscal 2007. So far, the company said phosphate sales have been weaker than expected and it wants to see a robust fall selling season in order to meet its phosphate target. Sales volumes guidance is 9.5-9.9 million mt.
Mosaic gives fiscal 2007 potash volume guidance of 7.7-8.1 million mt. It expects its 400,000 mt Esterhazy, Sask., potash mine expansion to be onstream in December.
Mosaic Offshore sales were off 11 percent during the quarter, to $303.9 million. However, there was a modest improvement in results in Brazil due to cost saving measures. As a result, the Offshore operating loss declined to $3.6 million from the year-ago $8.2 million.