Intrepid Potash Inc., Denver, reported first-quarter net income of $2.45 million ($0.18 per diluted share), up from the year-ago loss of $7.4 million ($0.57 per share). Sales were up at $71.5 million from $64 million. Adjusted EBITDA was $12.9 million, up from $8.8 million.
The year-ago net loss was impacted by the accrual of a $10 million settlement payment agreed upon relating to litigation with The Mosaic Co., Tampa, which was partially offset by a gain of $4.7 million on the restricted sale of 320 acres of fee land at the Intrepid South property.
“First-quarter results benefited from strong potash and Trio® pricing and sales, leading to improvements in net income, gross margin and EBITDA compared to the prior year,” said Bob Jornayvaz, Intrepid’s Executive Chairman, President, and CEO.
“Under-application of fertilizer in prior years and strong commodity prices continue to support fertilizer demand across our markets, and we expect robust cash flow from operations will continue in the second quarter,” he said. “Above-average evaporation at our potash facilities during the summer of 2020 will extend our production season into the second quarter and will allow us to meet the continued strong demand for fertilizer.
“We made substantial progress on our expansion into full-cycle water management during the quarter, increasing our recycling infrastructure and working to expand our current relationships with operators to include additional brine and recycled volumes,” Jornayvaz added. “Oilfield activity continues to improve in the Delaware Basin, with rig counts and permits steadily increasing throughout the first quarter, which we expect will lead to improved oilfield segment results in future periods.”
First-quarter potash sales volumes were up 18 percent, and the average net realized price 11 percent. However, Trio sales volumes decreased since the company opted to sell fewer tons into international markets as it focused on the higher-priced domestic market.
The company said potash production decreased 18 percent compared to the year-ago quarter due to lower brine grade at the HB facility and reduced run days at the Moab plant, as the company increased salt production to meet first-quarter demand.
Despite the decreased production, the company said it had sufficient inventory to meet the strong fertilizer demand in its markets and that it has significantly more inventory left to harvest in the solar evaporation ponds compared to the prior year. It expects to operate its potash facilities into second-quarter 2021, compared to the prior year, in which it ended spring production in mid-April.
Intrepid said its Oilfield Solutions water sales and sales of other oilfield products and services decreased as COVID-19 reduced oilfield activity from year-ago levels.
| Potash | 1Q-21 | 1Q-20 |
| Sales (000 st) | 43,578 | 33,791 |
| Gross Margin ($000) | 8,673 | 4,334 |
| Sales Volume (000 st) | 117 | 99 |
| Production Volume (000 st) | 113 | 137 |
| Avg Realized Price ($/st) | 282 | 255 |
| Trio | 1Q-21 | 1Q-20 |
| Sales (000 st) | 23,694 | 22,581 |
| Gross Deficit ($000) | (70) | (3,555) |
| Sales Volume (000 st) | 69 | 76 |
| Production Volume (000 st) | 56 | 50 |
| Avg Realized Price ($/st) | 233 | 193 |
| Oilfield Solutions | 1Q-21 | 1Q-20 |
| Sales (000 st) | 4,253 | 7,741 |
| Gross Margin ($000) | 505 | 4,844 |