The Mosaic Co. has updated guidance in advance of a Sept. 17 appearance an analyst conference. Mosaic noted that the domestic and international crop nutrient markets have softened in part as a result of the distributors’ cautiousness caused by the Belarusian Potash Co. (BPC) break-up.
"The long-term positive outlook for crop nutrient demand has not changed; high commodity prices are driving record farm returns and making our products more affordable than ever before. These strong fundamentals are expected to drive near record global phosphate and potash shipments in calendar 2013," said Jim Prokopanko, President and CEO. "In the short term, however, dealers are cautious and are deferring purchases. As a result, we have lowered our price and volume guidance for both the Potash and Phosphates segments for the third calendar quarter of 2013."
In Potash, the revised quarterly guidance range of 1.45 to 1.65 million mt reflects lower near-term demand. Previous guidance had been 1.8-2.1 million mt. The company’s realized price expectations are now in the range of $330 to $340 per mt, net of transportation and other distribution costs. This had been $330-$360/mt. The Potash gross margin rate is now expected to be in the low to mid 30 percent range. This had been in the mid to high 30 percent range.
In Phosphates, Mosaic said distributors’ cautious sentiment with respect to potash is spilling over as buyers are in a wait-and-see mode. The company has lowered third calendar quarter 2013 volume guidance to 2.6 to 2.8 million mt, down from 2.9-3.3 million mt. Also, third quarter realized prices are now expected to be in the range of $430 to $440 per mt, net of transportation and other distribution costs, down from $430-$465/mt.. The Phosphates gross margin percentage rate is expected to be in the mid-teens. It had been expected to be flat with the prior quarter.
Additionally, the company now expects its effective tax rate for the seven month transition period to be in the low 20 percent range. It had expected mid 20 percent range.
All other guidance is unchanged.