Intrepid Potash Inc. on Aug. 2 reported second-quarter sales of $81.0 million, a 12% decrease from last year’s $91.7 million. Consolidated gross margin for the quarter totaled $15.4 million, while net income came in at $4.3 million ($0.33 per diluted share), down from last year’s net income of $23.7 million ($1.74 per diluted share).
The company posted adjusted EBITDA of $15.8 million in the second quarter, down from $41.5 million in last year’s second quarter, with the lower profitability primarily driven by lower pricing for key products and an increase in cost of goods sold.
“Fertilizer pricing continues to drive strong margins for the company, and our expectation of robust demand underpinned by solid farmer economics was evident in our improved sales volumes in the first half of this year,” said Bob Jornayvaz, Intrepid’s Executive Chairman and CEO.
Potash segment sales in the second quarter were down 3% from last year, to $47.3 million. The lower revenue was driven by a 35% decrease in the average net realized sales price for potash, to $479 per ton from $738 per ton last year. This was partially offset by higher potash sales volumes, which totaled 79,000 tons during the quarter, a 41% increase from last year’s second quarter.
Potash segment gross margin totaled $12.9 million for the quarter and $27.3 million for the first six months, down from $24.9 million and $54 million, respectively, in 2022. Potash production totaled 12,000 tons in the second quarter and 102,000 tons for the first half, down from 25,000 tons and 128,000 tons, respectively, in 2022.
Potash segment sales decreased 5% for the first six months, to $99.8 million, with higher sales volumes of 167,000 tons offsetting a 32% decrease in the average net realized price of $485 per ton.
Trio® segment sales were 19% lower for the quarter at $28.7 million, primarily driven by a lower average net realized sales price per ton of $333, down 32% from last year’s second-quarter. This was partially offset by a 7% increase in Trio® sales volumes for the quarter, to 63,000 tons.
Six-month Trio® segment sales decreased 23%, to $59.0 million, driven by a 29% decrease in the average net realized price to $339 per ton, while six-month sales volumes were down 2%, to 128,000 tons.
Trio® segment gross margin totaled $1.2 million for the second quarter and $2.7 million for the first six months, down from $13.1 million and $29.2 million, respectively, in 2022. Intrepid said the lower gross margin figures were primarily driven by an increase in segment cost of goods sold and lower pricing.
Trio® production totaled 58,000 tons in the second-quarter and 107,000 tons for the first six months, equal to last year’s second-quarter output but down from the 2022 six-month production volume of 123,000 tons. Intrepid said its East Facility had unplanned downtime of roughly eight days in the first quarter, which was the primary reason for the lower first-half production volume.
Intrepid’s Oilfield Solutions segment sales in the second quarter decreased $2.4 million, or 32%, compared with last year, which the company said was primarily driven by a $1.1 million decrease in water sales and a $1.5 million decrease in surface use, rights-of-way, and easement revenues.
Jornayvaz said Intrepid’s key focus over the last year has been successful project execution, with growth capital primarily directed to the company’s potash assets to maximize brine availability and improve brine grade. “As we shared in recent press releases, we successfully executed on three of our key growth projects and are already seeing improvements in our injection rates, with production benefits expected next year,” he said.