The Mosaic Co., Tampa, reported fourth-quarter and full-year net income that soared past year-ago losses and recent analyst projections. Fourth-quarter net earnings attributable to the company were $827.9 million ($2.17 per diluted share) on net sales of $2.46 billion, up from the year-ago loss of $921 million ($2.43 per share) and $2.08 billion, respectively. The Bloomberg Consensus, the average estimate by major analysts, was for net income of only $68 million. Adjusted EBITDA for the quarter was $508 million.
Full-year net earnings were $666.1 million ($1.75 per share) on net sales of $8.7 billion, up from the year-ago loss of $1.07 billion ($2.78 per share) and $8.91 billion. Analysts had expected a loss of $91 million. Adjusted EBITDA for the year was $1.56 billion.
Mosaic did note that fourth-quarter and full-year results included $580 million in discrete tax benefits, which included the reversal of a tax valuation reserve established with the acquisition of Vale Fertilizantes. Mosaic said it also recognized a loss on equity investments of $94 million, including a $97 million loss for the company’s share of the MWSPC joint venture in Saudi Arabia, as a result of less than full operating rates and challenging global phosphate market conditions in the first-half.
“Our actions to optimize our portfolio of assets and invest in efficiencies, along with our reduced inventories and the expected strong global fertilizer demand in 2021, position the company well for 2021,” said President and CEO Joc O’Rourke. “However, in the U.S. market, those strong trends depend in part on the outcome of a pending trade case whose outcome is uncertain.”
However, the company said phosphate demand is strong globally and producer and channel inventories remain well below normal ahead of the North American application season. The company believes strong Chinese domestic demand and industry restructuring will limit supplies available for export. Mosaic expects to realize a $40-$50/mt improvement in average realized prices in the first quarter over the fourth quarter, and expects global supply and demand to remain tight through the year.
Mosaic potash fourth-quarter potash volumes soared 80 percent, to 2.7 million mt from the year-ago 1.5 percent. The company believes strong demand will continue through 2021. It expects to realize a $20-$25/mt improvement in average realized prices in the first quarter versus the fourth quarter and benefit throughout 2021 from improving global pricing.
For the year, Mosaic said it realized over 10 percent growth in sales volumes in both the Potash and Mosaic Fertilizantes segments, and delivered record sales of MicroEssentials, selling 3.1 million mt in 2020 versus 2.7 million mt in 2019.
Phosphate gross margin per mt pulled into the black for both the quarter and year, after being in the minus column in 2019.
| Potash | 4Q-20 | 4Q-19 | 2020 | 2019 |
| Sales Volume (million mt) | 2.7 | 1.5 | 9.4 | 7.8 |
| MOP Selling Price $/mt | 176 | 224 | 181 | 237 |
| Gross Margin per $/mt | 45 | 61 | 50 | 79 |
| Sales ($) | 599 M | 395 M | 2.0 B | 2.1 B |
| Phosphates | 4Q-20 | 4Q-19 | 2020 | 2019 |
| Sales Volume (million mt) | 2.3 | 2.0 | 8.5 | 8.2 |
| DAP Selling Price $/mt | 363 | 266 | 310 | 325 |
| Gross Margin per $/mt | 73 | (52) | 15 | (10) |
| Sales ($) | 990 M | 698 M | 3.1 B | 3.2 B |
| Mosaic Fertilizantes | 4Q-20 | 4Q-19 | 2020 | 2019 |
| Sales Volume (million mt) | 2.3 | 2.2 | 10.6 | 9.2 |
| Brazil MAP Selling Price $/mt | 384 | 365 | 333 | 402 |
| Avg Finished Selling $/mt (Destination) | 352 | 394 | NA | NA |
| Gross Margin per $/mt | 32 | 32 | 40 | 31 |
| Sales ($) | 823 M | 864 M | 3.5 B | 3.8 B |