Phosphate producer Itafos Inc., Houston, reported second-quarter net income of $44.3 million on revenues of $155 million, more than quadrupling the year-ago net income of $9.6 million on revenues of $103.3 million, citing a sharp increase in fertilizer prices, strong production at its Conda, Idaho plant, and positive contributions from its re-activated Arraias, Brazil, sulfuric acid plant. Adjusted EBITDA moved to $63.6 million from the year-ago $33.7 million.
“We are pleased to report record performance during the second quarter and first half of 2022 in terms of safety and financial results, along with continued strong operational performance,” said Itafos CEO G. David Delaney, noting the company’s trailing 12 months adjusted EBITDA of $213 million sets a new record, allowing it to make significant progress toward deleveraging its balance sheet.
“We have also updated our full-year guidance for 2022 to reflect the continued strength of the business and market fundamentals. Finally, we remain focused on our key objectives, including extending Conda’s current mine life through permitting and development of H1/NDR, and evaluating strategic alternatives for our non-North American assets.”
Second-quarter DAP NOLA prices averaged $860/st compared to the year-ago $571/st, up 51%, driven by strong agriculture and phosphate fertilizer market supply and demand dynamics.
Itafos expects sulfur and sulfuric acid prices to decrease globally due to increased refinery activity and softer demand from phosphates and metals consumers.
During the second quarter, Conda highlights included the completion of a scheduled plant turnaround and a return to full capacity; production of 80,297 mt P2O5, up from the year-ago 67,835 mt P2O5; generated revenues of $148.8 million, up from $103.3 million; generated adjusted EBITDA of $66.7 million, up from the year-ago $37.7 million; and the reaching of a settlement agreement related to shared environmental and asset retirement a Lanes Creek mine.
Company-wide financial performance was partially offset by higher input costs and the restart of Arraias, which produced 20,549 mt of sulfuric acid during the quarter and 30,200 mt during the first half with no production during the year-ago periods.
First-half net income was $77.3 million on revenues of $304.9 million, up from the year-ago $11.5 million and $193.5 million, respectively. Adjusted EBITDA was $124 million, up from $54 million. First-half DAP NOLA prices averaged $827/st, up from the year-ago $536/st, or 54%.
Going forward, Itafos retained full-year adjusted EBITDA guidance of $210-$230 million, and increased net income to $100-$115 million from $80-$95 million.
Second-half adjusted EBITDA is projected at $86-$106 million, up from $90-$100 million, and net income at $23-$28 million, a change from the earlier $25-$30 million.