Phosphate producer Itafos, Toronto, reported first-quarter net income of $1.9 million, up from the year-ago net loss of $18.3 million. Revenues, adjusted EBITDA, and cash flow were also up.
“We delivered excellent operational and financial performance during Q1 2021, generating adjusted EBITDA at Conda of $24.2 million and $20.7 million on a consolidated basis,” said G. David Delaney, Itafos CEO. “Our Q1 2021 results reflect significantly improved market fundamentals and continued strong operational performance at Conda. We expect these positive trends to continue and have increased our full year guidance for 2021 accordingly.”
“In addition, we continue to advance our plans to optimize the cash returns of the business through capital-lite spending alternatives and evaluation of strategic alternatives for our assets outside of North America,” added Delaney.
Company-wide revenues were $90.1 million, up from $75.4 million, adjusted EBITDA was $20.7 million versus a loss of $788,000, and cash flow was $14.8 million versus a loss of $7.9 million.
Conda-specific net income was $14.8 million on revenues of $90.1 million, up from the year-ago $955,000 and $70.9 million, respectively. Adjusted EBITDA was $24.2 million, up from $8.3 million.
Conda produced 145,191 mt of product during the first quarter, up from the year-ago 138,896 mt. The increase was primarily due to the ramp up of specialty MAP+ production and higher APP production, which were partially offset by lower MAP and SPA production.
Itafos has raised its annual adjusted EBITDA guidance to $95-$105 million from $80-$90 million to reflect the company’s view of expected second-half prices at Conda, including the current NOLA prices, as well as a reset of SPA prices. The company noted that 100 percent of its Conda MAP is sold under a long-term offtake agreement with pricing indexed to NOLA DAP on an average three-month trailing basis. Itafos said the first-quarter average DAP price was $500/st, up 84 percent from the year-ago $272/st.
Full-year cash flow guidance has gone to $40-$50 million from $25-$35 million, and growth capital expenditures to $12-$17 million from $8-$13 million.
Going forward, Itafos expects three positive market factors to continue: no significant phosphate fertilizer supply capacity additions, resulting in continued drawdown of global inventories; strong phosphate fertilizer demand underpinned by global coarse grains and oilseeds reaching multi-year low stocks-to-use ratios and the highest price in nearly a decade; and strong fundamentals in the North American market with solid demand, depleted inventory levels, and higher crop prices.
Itafos said it has advanced activities to extend Conda’s life through permitting and development of the Husky 1/North Dry Ridge mine, including advancement of the National Environmental Policy Act Environmental Impact Statement preparation and public engagement process.
It expects to advance Conda’s EBITDA generation by continued ramp up of MAP+ production and sales; advancing a new initiative to produce and sell hydrofluorosilicic acid (HFSA), including completion of a concept study, initiation of detailed engineering and design, and advancement of a potential long-term offtake agreement; and advancement of the magnesium oxide (MgO) reduction initiative to enhance SPA production, including test work with the use of enhanced grinding, attrition scrubbing, and flotation.