Itafos Inc. reported first-quarter revenues of $128 million, up 7% from the year-ago $119.6 million, driven by increased sales volumes. Adjusted EBITDA saw a slight increase at $43.2 million versus the year-ago $43 million.
Net income for the quarter was off at $23.7 million from $28.2 million, with the reduction primarily due to higher taxes, partially offset by lower selling, general, and administrative expenses, and finance expenses.
“During Q1 2024, we have continued to make progress on a number of key initiatives related to the company’s asset portfolio,” said CEO G. David Delaney. “On April 29, 2024, we released our updated NI 43-101 Technical Report for Conda, confirming our 2037 mine life for the Husky 1/North Dry Ridge (H1/NDR) mine. We also acquired the Dry Ridge lease that is adjacent to Husky 1 and continued work on the build-out of infrastructure associated with the H1/NDR project, which remains on schedule and on budget.”
“In Brazil, we continue to make progress on our Fertilizer Restart Program and commissioning has commenced associated with our Partially Acidulated Phosphate Rock (PAPR) product,” he added. “Additionally, we successfully negotiated a 25-year extension to the mining contract and mining lease associated with the Farim (Guinea-Bissau Phosphate Project) asset, which is now valid until 2048.”
Delaney said the process to explore and evaluate various strategic alternatives to enhance value for Itafos shareholders has concluded without an announced transaction. “The Board of Directors and the management team have and will continue to operate the business with the objective of creating shareholder value and will review strategic opportunities as they arise,” he said.
First-quarter Conda adjusted EBITDA was $46.6 million on revenues of $122.8 million, off slightly from the year-ago $47.5 million and $116 million, respectively. The decrease was attributed to lower realized prices, partially offset by higher sales volumes. Production was up at 90,246 mt P205 versus the year-ago 82,145 mt.
Adjusted EBITDA at the Arraias facility in Brazil was $400,000, up from the year-ago $200,000, with the increase due to higher sulfuric acid and Direct Application Phosphate Rock (DAPR) sales volumes. Sulfuric acid production was up at 33,216 mt from 20,614 mt, with the increase attributed to higher customer demand.
Itafos is maintaining current guidance of 320,000-340,000 mt of P205 mt in 2024. The company said first-quarter phosphate prices were comparable to year-ago levels and that application through the fall and now into the spring of 2024 has remained strong, supporting higher prices despite softer crop prices.
Going forward, the company expects softening second-quarter pricing due to seasonal factors, including a summer reset and lower crop prices. It said expectations of supply adjustments in the overall phosphate import market into North America continue to create some uncertainty in the market.
Itafos noted, however, that the North American market has low inventory levels and there is continued strength in global demand, as well as ongoing export restrictions from China, partially offset by constructive crop prices that have softened from historical highs.