Intrepid Potash Inc. reported a fourth-quarter net loss of $37.3 million on sales of $56.7 million, compared to the year-ago $3.98 million and $66.7 million, respectively. Adjusted EBITDA was $7.1 million, down from the year-ago $23.1 million.
Intrepid reported a full-year net loss of $35.7 million on sales of $279.1 million, down from 2022’s net income of $77.2 million and sales of $337.6 million. Adjusted EBITDA was $41.6 million, down from 2022’s $141.8 million.
“Intrepid’s fourth quarter saw the continuation of strong demand for our potash and Trio® with our combined 2023 sales volumes up approximately 16% compared to 2022,” said Intrepid Executive Chairman Bob Jornayvaz. “Slightly lower fertilizer pricing and higher costs associated with our current potash production profile again proved to be headwinds to our margins in the fourth quarter, although we are on track to start to see the first step-change to higher potash production beginning in the second half of 2024. Moreover, fertilizer pricing has remained resilient, and we expect to see steady sales through the spring application season.”
Jornayvaz highlighted Intrepid’s December announcement that it had entered into the Third Amendment to the Cooperative Development Agreement with XTO (GM Dec. 15, 2023). He said Intrepid has already received the first $50 million for its commitments under the Amendment.
The Amendment also stipulates that Intrepid will receive an additional guaranteed, one-time $50 million payment upon certain events, Jornayvaz said, with XTO required to pay additional amounts in the event of certain additional drilling activities, up to a maximum of $100 million.
“This is a milestone development for Intrepid and the cash infusion significantly helps de-risk our outlook,” he said. “Our current balance sheet is close to fully funding our 2024 capital program, providing a cash runway until we see the positive impacts to our unit economics associated with the higher potash production rates.”
The company took a $42.8 million impairment charge during the quarter, with $31.9 million related to its conventional langbeinite mine (East Mine); $9.9 million related to the remaining assets at the West Mine, which has been in care and maintenance since 2016; and $1.0 million related to various water recycling assets.
“Intrepid’s primary strategic priority has been to revitalize our potash assets and I’m very pleased to share that we are on track to successfully achieve this goal,” he continued. “We still have a couple projects to bring online over the next few months, but our potash production outlook is improving, highlighted by the significantly improved brine grades we’re already seeing in our harvest ponds at HB from the Eddy Shaft project.”
Jornayvaz said Intrepid is still “a few quarters away from seeing the first inflection to higher production from our HB mine and we want to be clear that our investments are designed to sustainably support higher potash production over the long-term.” Jornayvaz told analysts in an earnings call that potash production will be up at least 10-15% in 2024 compared with 2023, with an additional 15-20% increase expected the following year and higher upside looking long-term.
“As for our other growth opportunities, we recently received the final permit for our sand project at Intrepid South and we continue to make progress on our lithium resource at Wendover,” he added. “Overall, we’re optimistic on Intrepid’s future and we’ll be laser-focused on getting appropriate value back in the stock.”
Intrepid CFO Matthew Preston told analysts that the company expects first-quarter 2024 sales volumes in the 65,000-75,000 st range at an average net realized sales price of $385-$395/st. He put first-quarter Trio sales volumes at 80,000-90,000 st at an average net realized sales price of $290-$300/st.
| Potash | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Sales ($000) | 28,557 | 43,756 | 155,920 | 191,378 |
| Gross Margin ($000) | 4,333 | 20,907 | 35,049 | 94,769 |
| Sales Volume (000 st) | 45 | 50 | 258 | 222 |
| Production Vol. 000 st) | 79 | 106 | 224 | 270 |
| Avg Realized Price ($/st) | 431 | 693 | 466 | 713 |
| Trio | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Sales ($000) | 21,130 | 17,265 | 102,182 | 117,826 |
| Gross Margin ($000) | (2,378) | 3,429 | (3,995) | 39,123 |
| Sales Volume (000 st) | 49 | 28 | 228 | 197 |
| Production Vol. 000 st) | 57 | 51 | 216 | 226 |
| Avg Realized Price ($/st) | 292 | 461 | 321 | 479 |
| Oilfield Solutions | 4Q-23 | 4Q-22 | 2023 | 2022 |
| Sales ($000) | 7,045 | 5,732 | 21,310 | 28,668 |
| Gross Margin ($000) | 2,666 | 1,315 | 5,792 | 7,516 |