Phosphate maker Itafos posted a $48.6 million loss for the fourth-quarter ending Dec. 31, 2023, compared to year-ago net income of $29.3 million. The company said the performance was primarily due to lower realized prices as a result of softer global market conditions and a $66 million impairment of non-current assets at Arraias, Brazil, partially offset by higher sales volumes and lower input costs.
“During fourth-quarter 2023, we saw prices continue to strengthen off the lows of second-quarter 2023, reflective of increasing demand and tighter US supply fundamentals,” said G. David Delaney, Itafos CEO. “We expect to see conditions continue into 2024. Going forward, the company will now provide guidance associated with our expected sales volumes, capital expenditures, and other relevant financial metrics. This change is consistent with peers in the industry.”
Itafos gave full-year 2024 sales volume guidance of 320,000-340,000 mt P205; SGA expenses guidance of $17-$20 million; maintenance capex of $25-$35 million; and growth capex of $35-$46 million.
Itafos added that it saw an extremely strong fall season, which resulted in improved prices from the summer and a continued tightening of North American phosphate fertilizer supply. The company expects a stable market moving forward due to ongoing tight supply situation coupled with softer crop prices.
Delaney said work continues on the company’s Husky 1/North Dry Ridge capital project, which he said remains on schedule and on budget. The company expects to begin mining activities in fourth-quarter 2025 onward, providing an uninterrupted supply as its Rasmussen Valley Mine reaches the end of its useful life.
Delaney said Itafos continues to explore and evaluate various strategic alternatives to enhance value for shareholders. The process was announced by the Board of Directors in first-quarter 2023 (GM March 17, 2023).
In other news, Itafos said that as of Dec. 31, 2023, it has completed the wind-down process of its Mantaro phosphate mine project in Junin, Peru, which was previously owned by Stonegate Agricom Ltd. (GM July 21, 2017; May 26, 2017).
Fourth-quarter Itafos revenues were $119 million, down from the year-ago $135.2 million, while adjusted EBITDA was $29.5 million, down from $50.1 million.
The Itafos Conda operations in Idaho produced 95,719 mt of P205 during the fourth quarter, up from the year-ago 89,226 mt, with the company citing production efficiencies from improved uptime and better recoveries. Conda generated quarterly adjusted EBITDA of $32.4 million on revenues of $112.4 million, versus the year-ago $54.8 million and $129.3 million, respectively.
Itafos reported that its Arraias operation in Brazil successfully started Direct Application Phosphate Rock (DAPR) production in the fourth quarter by producing 643 mt of P205, compared with zero in the year-ago quarter.
Arraias produced 34,087 mt of sulfuric acid during the quarter, down from year-ago 35,895 mt, primarily due to reduced sulfuric acid and sulfur inventory management.
Arraias generated fourth-quarter adjusted EBITDA of $1.1 million, up from the year-ago $0 million, with the increase primarily due to higher sulfuric acid volume and lower costs, as well as the commencement of DAPR sales.
Company-wide, Itafos remained in the black for full-year 2023, with net income of $3.1 million on revenues of $465.5 million, compared to 2022’s $114.7 million and $593.3 million, respectively. Adjusted EBITDA was $131.8 million, down from $224.8 million.
Full-year Conda production was 349,030 mt P205, up from 2022’s 343,526 mt. Adjusted EBITDA was $148.1 million on revenues of $448.1 million, compared with 2022’s $240.2 million and $571.1 million, respectively.
Full-year Arraias sulfuric acid production was down at 89,075 mt from 2022’s 99,030 mt, with Itafos citing a sulfuric acid plant shutdown for required maintenance in April and May. DAPR production was 5,196 mt for the year, versus zero in 2022.
Arraias generated adjusted EBITDA of $400,000 for the year compared to a $100,000 loss in 2022. Higher acid volumes were cited, along with lower costs and the commencement of DAPR sales.