Intrepid Potash Inc., Denver, reported second-quarter net income of $23.7 million ($1.74 per diluted share) on sales of $91.7 million, up from the year-ago $19.5 million ($1.46 per share) and $67.9 million, respectively. Adjusted EBITDA was $41.5 million, up from $16.9 million.
“Intrepid’s financial performance in the second quarter and first half of 2022 has ranked among the best in nearly ten years,” said Bob Jornayvaz, Intrepid Executive Chairman and CEO. “In the first half of the year, Intrepid generated adjusted EBITDA of $91.6 million on total sales of $196.1 million, for adjusted EBITDA margins of 47%. First-half 2022 cash flow from operations totaled $83.2 million, and we ended July with $85 million of cash and cash equivalents for total liquidity of $159 million.
“Underpinned by strong cash flow generation, for 2022 we have budgeted for approximately $65 million to $75 million of capital spending, with a roughly 50-50 split between maintenance and growth,” he added. “In terms of growth projects, over the past couple quarters, we’ve highlighted several initiatives at our Utah and New Mexico facilities to help increase production and improve unit economics, and today we’re excited to announce a new sand project at our South Ranch. We’ve already made progress on permitting and leasing, and are beginning equipment purchases. This project is still in its early phases but we estimate the sand resource has over ten years of potential, and is also strategically located in the heart of oil and gas activity in the Permian basin.
“Looking ahead, the outlook for both the industry and Intrepid remains strong,” he continued. “The global fertilizer supply challenges – particularly for potash – remain unabated. Even with the announced potash supply additions, we believe the lack of supply versus historical levels of demand will result in potash prices remaining elevated. Moreover, despite recent pullback from multi-year highs, forward crop prices still point to historically strong U.S. farmer economics.
“After nearly 18 months of strong demand in the potash market, we expect buyers will approach the second-half with significantly more restraint given inventory carryover following a compressed spring and heightened concerns over the increased credit and inventory exposure they face at current price levels,” Jornayvaz said. “Despite the minor headwinds and a slower start to the third quarter than prior years, we expect agricultural demand will pick up as harvest progresses, and we are ready to meet our customer’s needs in today’s dynamic market.”
As for the Potash segment, Intrepid said that below average evaporation rates across its facilities in 2021 led to decreased potash production during second-half 2021 and first-half 2022. In addition, it said customers were reluctant to replenish potash inventories toward the back half of the second quarter, preferring to wait for summer fill programs in the third quarter.
Six-month net income was $55.1 million ($4.03 per share) on sales of $196.1 million, up from the year-ago $22 million ($1.65 per share) and $139.4 million, respectively. Adjusted EBITDA was $91.6 million, up from $29.7 million.
| Potash | 2Q-22 | 2Q-21 | YTD-22 | YTD-21 |
| Sales (000 st) | 48,827 | 37,693 | 105,269 | 81,270 |
| Gross Margin ($000) | 24,925 | 10,131 | 53,990 | 18,803 |
| Sales Volume (000 st) | 56 | 92 | 126 | 208 |
| Production Vol. 000 st) | 25 | 51 | 128 | 164 |
| Avg Realized Price ($/st) | 738 | 319 | 713 | 300 |
| Trio | 2Q-22 | 2Q-21 | YTD-22 | YTD-21 |
| Sales (000 st) | 35,467 | 26,924 | 76,519 | 50,619 |
| Gross Margin ($000) | 13,052 | 3,162 | 29,191 | 3,093 |
| Sales Volume (000 st) | 59 | 75 | 131 | 145 |
| Production Vol. 000 st) | 58 | 63 | 123 | 119 |
| Avg Realized Price ($/st) | 493 | 271 | 476 | 251 |
| Oilfield Solutions | 2Q-22 | 2Q-21 | YTD-22 | YTD-21 |
| Sales (000 st) | 7,512 | 3,331 | 14,512 | 7,584 |
| Gross Margin ($000) | 3,834 | 906 | 5,806 | 1,411 |