Intrepid Potash Inc., Denver, Colo., reported a second-quarter net loss of $0.8 million ($0.06 per diluted share) on total sales of $62.1 million, down from income of $4.3 million ($0.33 per diluted share) and sales of $81 million in last year’s second quarter. Lower sales volumes and net realized prices were cited.
Adjusted EBITDA was $9.2 million for the quarter and $16.9 million for the first six months, down from $15.8 million and $32.2 million, respectively, in 2023. Total revenue came in at $62.05 million for the quarter and $141.3 million for the first six months, down from $81 million and $167.9 million, respectively, in 2023.
Potash and Trio® sales volumes for the quarter were reported at 55,000 st and 63,000 st, respectively, compared with 79,000 st and 63,000 st last year. Average net realized sales prices were $405/st for potash and $314/st for Trio®, down from $479/st and $333/st, respectively, in the second quarter of 2023.
“We sold fewer tons of potash in the second quarter of 2024 compared to the second quarter of 2023, as we had fewer tons of potash to sell due to lower potash production from our HB and Wendover facilities,” Intrepid said, noting the 30% drop in sales volumes and the 15% drop in net realized potash prices.
“Our strategic focus continues to be improving our potash production, and I’m happy to share that we saw the first indications of this in our second-quarter results,” said Matt Preston, Intrepid’s Chief Financial Officer and Acting Principal Executive Officer. “Improved brine grades at HB from the Eddy Cavern and good early-season evaporation rates allowed us to extend our spring production season, and we still expect our 2024 potash production to be approximately 15% higher than 2023.”
“As the broader potash market looks to be finding its midcycle pricing floor, we remain focused on improving our unit economics by means of higher potash production,” Preston added.
Trio® segment sales were down 8% from last year while Trio® sales volumes were flat year-over-year. Intrepid said improved potassium fertilizer supplies pressured Trio® prices, though cost of goods sold were down 18% in the quarter due to improved production rates and decreased total production costs. The company said it produced 68,000 st of Trio® during the quarter, up from 58,000 st last year.
“In Trio®, our sales volumes and production are well ahead of last year’s pace through the first six months of the year as increased operating rates from our new continuous miners and our modified operating schedule have driven significant improvement in both our total and per ton production costs,” Preston said. “Trio® segment gross margin of $2.2 million in the second quarter was an increase of approximately $3.3 million sequentially and $1 million year-over-year.”
Sales in the company’s oilfield solutions segment increased $0.4 million from last year, primarily due to a $0.2 million increase in brine water sales and a $0.3 million increase in other oilfield solution products and services. Intrepid noted increased water and brine water sales due to continued strong demand from oil and gas operators in the Permian Basin near Intrepid South.
As for operational updates, Intrepid said it completed a new extraction well project at is HB Solar Solution Mine in Carlsbad, N.M., in June, and the company expects to commission Phase Two upgrades at the mine in the third quarter, which includes an in-line pigging system to remove scaling and help ensure more consistent flow rates.
A new primary pond at the company’s Wendover, Utah, mine is expected to increase the brine evaporation area and improve production by the fall of 2025, and Intrepid said it continues to advance its lithium project at Wendover.
The company also said it now has all permits to begin construction and operation of its sand project at Intrepid South, but developments there have been paused due to “softening conditions in the oilfield services market.”
Gross margins for the quarter slipped to $7.6 million from $15.4 million, while cash flow from operations dipped to $27.7 million from $30.5 million. Capital expenditures were $11.3 million for the second quarter and $23.0 million for the first six months ended June 30, 2024. The company said it continues to expect full-year 2024 capital expenditures of $40-$50 million.