All Posts from May 6, 2022

LSB Industries Inc. – Management Brief

Management Briefs, Obituary

LSB Industries Inc. Founder Jack Golsen, 93, passed away on April 29, 2022. Golsen founded the company in 1968 and served as its president, CEO, Chairman of the Board, Executive Chairman, and Chairman Ameritus.

Golsen also served as Director of the United Way of Oklahoma and as a Trustee of Oklahoma City University, as well as numerous other corporate boards. In 1996, Golsen was inducted into the Oklahoma Commerce and Industry Hall of Fame as of one of Oklahoma’s leading industrialists.

AmmPower Corp. – Management Brief

Canada, Green Ammonia, Management Briefs

Toronto-based green ammonia technology developer AmmPower Corp. announced on May 5 that Christopher Lilla will be joining the Company as Chief Financial Officer and as a member of AmmPower’s Board of Directors, effective May 1, 2022. The company also announced that Faizaan Lalani has resigned from the Board and as Chief Financial Officer, effective April 30, 2022.

Lilla has 20 years of progressive financial management experience, primarily at global automotive suppliers. AmmPower said he has extensive experience navigating global organizations through complex integrations, M&A transactions, and developing the finance function.

Lilla previously served as Executive Vice President and Chief Financial Officer of Mobex Global for more than three years. Prior to that he held roles of Vice President of Strategic Finance and Corporate Controller at Joyson Safety Systems, Vice President and Chief Accounting Officer at Federal-Mogul Powertrain, and progressive leadership roles at Delphi and KPMG LLP. Lilla is a graduate of Michigan State University, where he earned a B.A. and M.S. in Accounting, and is a certified public accountant.

“Chris has a proven track record of results-driven leadership, financial acumen and strategic thinking,” said Gary Benninger, AmmPower CEO and Executive Chairman of the Board. “We are excited to have him join the team as we continue to execute on our plan to advance green ammonia solutions.”

The Andersons Plant Nutrients Posts Record 1Q Income

Earnings, Eastern Cornbelt, News, Specialty

The Andersons Inc., Maumee, Ohio, reported first-quarter net income attributable to The Andersons from continuing operations of $6.1 million ($0.18 per diluted share), compared with $12 million ($0.36 per diluted share) in last year’s first quarter. EBITDA from continuing operations was $55.8 million, compared to adjusted EBITDA of $63.2 million last year.

The company said grain basis values for its Trade segment were driven sharply lower during the quarter due to the run-up in futures prices resulting from the war in Ukraine. Propane sales were also down from last year. The Trade segment recorded pretax income of $3.7 million and EBITDA of $20.8 million for the quarter, compared to adjusted pretax income of $14.3 million and adjusted EBITDA of $32.5 million in the first quarter of 2021.

The Plant Nutrient segment posted record pretax income of $10.7 million, compared to $8.5 million in 2021’s first quarter, with strong margins more than offsetting a decrease in volumes for most fertilizers. Plant Nutrient’s record first-quarter EBITDA was $18.8 million, compared to $16.0 million in last year’s first quarter.

“Fertilizer prices and farm income both remain very high, and while producers are feeling the impact of high input costs, commodity prices still support fertilizer application,” said President and CEO Pat Bowe. “We continue to receive good support from our suppliers in this time of tight stocks. Supply remains a factor in our industry, and market prices reflect reduced global stocks for most fertilizers and grains. Our teams are executing well and remain focused on customer needs and operational excellence.”

The Renewables segment reported pretax income attributable to the company of $5.5 million and EBITDA of $24.4 million in the quarter, compared to income of $2.9 million and EBITDA of $22.0 million in the 2021 first quarter. The Andersons cited improved margins at all ethanol facilities, strong feed and distiller corn oil values, and profitable third-party trading of ethanol, DDGs, and renewable feedstocks that more than doubled last year’s first-quarter results.

“We continue to believe that we are well-positioned in all businesses for the remainder of 2022,” Bowe said. “We are closely monitoring the weather-related planting delays in both corn and soybeans. While progress is being made, we are behind the five-year national average for this date and expect planting activities to ramp up quickly as soon as fields allow it.”

LSB Posts Highest Ever Quarterly EBITDA

Ammonia, Ammonium Nitrate, Earnings, News, Southern Plains

LSB Industries Inc., Oklahoma City, Okla., reported first-quarter net sales of $199 million and adjusted EBITDA of $101.1 million, compared with $98.1 million and $17.3 million, respectively, in last year’s first quarter. The company posted its highest quarterly EBITDA ever, driven by an adjusted EBITDA margin of 50.8 percent, compared with 17.6 million in the first quarter of 2021.

LCB said the year-over-year income and EBITDA improvements resulted primarily from higher selling prices, partially offset by higher natural gas feedstock prices and lower sales volumes, due in part to wet spring weather and delayed fertilizer purchases. Adjusted earnings per share (EPS) for the quarter was $0.69, compared with an EPS loss of $0.32 in last year’s first quarter.

“We delivered another quarter of record results and substantial growth in net sales and adjusted EBITDA and EPS,” said Mark Behrman, LSB President and CEO. “Our strong performance once again reflects increases in product selling prices coupled with the benefits of our successful commercial initiatives over the past several years, along with solid operations at our facilities.”

Behrman said conditions supporting the strong pricing environment are likely to continue for the balance of 2022 and 2023 due to robust nitrogen market dynamics, driven by limited global supply stemming from high natural gas prices in Europe, and higher demand due to low global grain stocks.

“Demand for fertilizers is expected to remain robust for the balance of 2022,” LSB said. “Corn prices are currently near record-high levels, and corn futures point to corn prices remaining at elevated levels throughout 2022 and through the first half of 2023. These trends should translate into strong farmer income and promote significant demand for fertilizers as farmers seek to maximize yield in order to capitalize on the anticipated strong pricing environment for corn.”

LSB said domestic natural gas prices are at their highest levels since 2008, with the Henry Hub spot gas price at approximately $8 per MMBtu. “Despite this increase in our feedstock cost, selling prices for our products have increased by a significant multiple of the increase in gas cost,” the company said. “We expect this to translate into continued strong margins over the course of the 2022.”

Behrman said the company is evaluating debottlenecking projects that can “significantly increase the production capacities at our facilities,” and is planning to move forward on one or more of these projects in the coming quarters. Behrman also highlighted LSB’s commitment to decarbonization activities, noting the company’s recent agreement with Lapis Energy to develop a CO2 capture and sequestration project at the El Dorado, Ark., facility (GM April 29, p. 1).

Regarding its industrial business, LSB said sales volumes of its nitric acid continue to increase driven by homebuilding and power generation. “The strength in the Tampa ammonia price also has positive implications for our industrial business, as a number of industrial chemical contracts are indexed to the Tampa ammonia price,” the company said.

LSB said it entered the first quarter with a lower level of high density ammonium nitrate (HDAN) inventory than in previous years as a result of increased nitric acid production and sales in the second half of 2021 in connection with a new nitric acid offtake agreement, reducing first-quarter sales volumes of HDAN relative to the 2021 first quarter.

LSB said its total liquidity as of March 31, 2022, was more than $400 million, including $343.6 million in cash and short-term investments and approximately $63 million of borrowing availability under its Working Capital Revolver. Total long-term debt was $716.5 million on March 31, compared to $527.6 million on Dec. 31, 2021.

“Our strong profitability led to another quarter of significant cash flow, further enhancing our balance sheet,” Behrman said. “Additionally, in March we completed a $200 million senior notes offering, taking advantage of the low interest rate environment in anticipation of a rising rates, bolstering our liquidity position and giving us greater financial flexibility to capitalize on organic growth opportunities and to pursue accretive acquisitions.”

Capital expenditures were approximately $8.3 million for the first quarter. LSB said full-year capital expenditures related to environmental, health, and safety, and plant investments are expected to be approximately $50 million, with another $15 million earmarked for identified growth initiatives.

Avg Selling Price $/st 1Q-22 1Q-21 Percentage Change
UAN 553 150 269
AN & Nitric Acid 438 221 98
Ammonia        961 312 208
Other Factors 1Q-22 1Q-21 Percentage Change
Avg Nat Gas ($/mmBtu) 4.74 3.15 50
Tampa NH3 $/mt 1,206 348 247

CVR Reports 1Q Income, Sales Improvements

Ammonia, Earnings, News, Texas, UAN

CVR Partners LP, Sugar Land, Texas, on May 2 reported first-quarter 2022 net income of $94 million ($8.78 per common unit) on net sales of $223 million, compared to a net loss of $25 million ($2.37 per common unit) on net sales of $61 million in last year’s first quarter. EBITDA was $123 million, compared with EBITDA of $5 million for the first quarter of 2021.

The company’s average realized gate prices for UAN were up 212 percent in the quarter, to $496/st from $159/st in last year’s first quarter. Ammonia prices were up 252 percent over the prior year, to $1,055/st from $300/st.

“CVR Partners achieved strong first-quarter results led by robust global industry conditions,” said Mark Pytosh, CEO of CVR Partners’ general partner. “The U.S. spring crop planting season is progressing, and a good season will be critical to supporting global food security. We expect industry conditions to remain firm for the remainder of 2022.”

CVR Partner’s fertilizer facilities produced a combined 187,000 tons of ammonia during the first quarter of 2022, down only slightly from the 188,000 tons produced in last year’s first quarter. Of this year’s production total, 52,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 317,000 tons of UAN. In first-quarter 2021, 272,000 tons of UAN were produced.

The company said it has turnarounds planned for summer 2022 at both its Coffeyville, Kan., and East Dubuque, Ill., facilities. The company said it incurred turnaround expenses of $0.1 million for Coffeyville and $0.5 million for East Dubuque during the first quarter.

CVR Partners also announced that on May 2, 2022, the Board of Directors of its general partner declared a first-quarter 2022 cash distribution of $2.26 per common unit, which will be paid on May 23, 2022, to common unitholders of record as of May 13, 2022. The company said it also achieved its targeted $95 million in debt reduction during the first quarter by redeeming the remaining $65 million of its 9.25 percent Senior Secured Notes due 2023.

“During the past four quarters, CVR Partners has returned an equivalent value to unitholders of approximately $13.30 per common unit through declared cash distributions and unit repurchases, in addition to the $95 million debt reduction, equating to $8.89 per common unit,” Pytosh said.

Sales (000 st) 1Q-22 1Q-21
Ammonia        40 32
UAN 322 239
Plant Gate Price $/st 1Q-22 1Q-21
Ammonia        1,055 300
UAN 496 159
Production (000 st) 1Q-22 1Q-21
Ammonia – gross 187 188
Ammonia – net 52 70
UAN 317 272
Feedstock 1Q-22 1Q-21
Petroleum Coke ($/ton) 56.46 42.91
Natural Gas ($/mmBtu) 5.54 3.10

Intrepid 1Q Earnings Climb on Higher Potash, Trio Prices

Earnings, Featured, News, Potash, Specialty

Intrepid Potash Inc. reported first-quarter net income of $31.4 million ($2.31 per share) on sales of $104.4 million, up from last year’s net income of $2.5 million ($0.18 per share) on sales of $71.5 million. Intrepid said its first-quarter profitability was driven primarily by higher prices for potash and Trio®, which more than offset lower potash sales volumes during the quarter.

Adjusted EBITDA for the quarter was $50.2 million, up $37.3 million from last year’s first quarter and the best since the third quarter of 2012. Adjusted earnings per share were $2.41 for the quarter, which missed the average analyst estimate of $2.44. Net sales of $3.92 billion were up 71 percent year-over year, but missed the average analyst estimate of $4.08 billion. Bloomberg reported that Mosaic shares dropped 4.5 percent after the net sales miss.

“In the backdrop of close-to-record high potash prices, Intrepid delivered exceptional first-quarter results,” said Bob Jornayvaz, Intrepid’s Executive Chairman and CEO. “We believe the outlook for Intrepid for the remainder of 2022 and the next couple years is very positive as the supply-demand balance for potash should continue to support strong economics.”

Potash segment sales in the quarter increased 30 percent from last year, to $56.4 million, driven primarily by a 149 percent increase in its average net realized sales price, to $703/st. The segment’s higher revenue was achieved despite a 41 percent year-over-year drop in potash sales volumes, to 69,000/st for the quarter. Intrepid said it entered the year with fewer tons in inventory and less potash available in its ponds after a below average 2021 production season.

“On the supply side, the December 2021 sanctions on Belarus took effect in April and strong international pricing continues to absorb supply, which is helping create a U.S. market with minimal excess swing capacity in the near-term,” the company said.

Potash production in the first quarter totaled 103,000 st, down 9 percent from last year’s first quarter, while segment gross margin totaled $29.1 million, more than triple the $8.7 million generated in the first quarter of 2021.

Intrepid said potash pricing continues to be supported by tight supply and steady demand. The company announced a $50/st increase in April (GM April 1, p. 13), which it expects to realize on spot sales in the second quarter.

“Despite our reduced sales volumes as a result of few tons available and unfavorable weather in various parts of the U.S. in the first quarter, which delayed planting, higher commodity prices supported application rates in most of our markets and we are well positioned to meet our customers’ needs as the spring season progresses,” Jornayvaz said.

Potash segment byproduct sales in the quarter decreased by 17 percent from last year, to $4.8 million, due to lower water and magnesium sales, partially offset by higher salt sales. Intrepid said magnesium chlorides sales decreased from last year due to a mild winter, which limited purchases of deicing products in the first quarter. Salt sales were up from last year due to higher realized pricing and growth in the industrial and pool salt markets.

Trio segment sales were up 73 percent from last year, to $41.4 million, driven by a higher average net realized sales price of $469/st in the quarter. Trio sales volumes increased modestly to 71,000 st during the quarter. The Trio segment generated gross margin of $16.1 million and production volumes of 65,000 st during the quarter, 16 percent higher than last year’s first-quarter production volumes.

Oilfield Solutions sales totaled $7.0 million during the quarter, up $2.7 million from last year. Intrepid said the sales increase was driven primarily by higher fresh water sales, surface use agreement sales, brine water sales, and produced water royalties, offset by higher coasts of good sold due to increased contract labor and rental expenses for water recycling equipment. The company said it also incurred additional contract labor expenses and increased water transfer fees during the quarter.

Intrepid noted several improvement products underway at its potash facilities. These include a new injection pipeline at HB, another potash cavern in Moab, Utah, and upgraded wells at its Wendover, Utah, site, which the company expects will add production volume as early as spring 2023. The company said it is also running additional underground shifts at its East mine to increase Trio availability.

“While potash prices remain elevated, we believe crop prices should continue to drive steady demand in the U.S., and U.S. potash prices are still at a record differential to Brazil,” the company said. “Looking into the back half of the year, as our potash production returns to more normal levels after the below-average 2021 evaporation year, our cost-per-ton should also improve, supporting strong cash flow generation.”

The company said it has approximately $80 million in cash on hand and $74 million available under its revolving credit facility as of April 30, 2022, for total liquidity of approximately $154 million.

Potash 1Q-22 Q-21
Sales (000 st) 56,442 43,578
Gross Margin ($000) 29,064 8,673
Sales Volume (000 st) 69 117
Production Vol. (000 st) 103 113
Avg Realized Price ($/st) 703 282
Trio 1Q-22 Q-21
Sales (000 st) 41,052 23,694
Gross Margin ($000) 16,140 (70)
Sales Volume (000 st) 71 69
Production Vol. (000 st) 65 56
Avg Realized Price ($/st) 469 233
Oilfield Solutions 1Q-22 Q-21
Sales (000 st) 7,000 4,253
Gross Margin ($000) 1,972 505

Stronger Pricing Drives Mosaic’s 1Q Results

DAP/MAP, Earnings, Featured, News, Potash Muriate

The Mosaic Co. reported adjusted EBITDA of $1.45 billion in the first quarter of 2022, up from $560 million last year and slightly above the Bloomberg Consensus of $1.44, which averages the projections from major analytical firms. Revenues were up 71 percent year-over-year to $3.9 billion, as stronger pricing more than offset lower volumes. The gross margin rate in the quarter was 36.7 percent, up from 18.9 percent in the first quarter of 2021.

First-quarter net income was reported at $1.18 billion ($3.19 per diluted share), up from last year’s $157 million and above the Bloomberg Consensus of $900.3 million. Adjusted earnings per share (EPS) for the first quarter was $2.41, above last year’s $0.57, but below the Bloomberg Consensus of $2.44.

“Mosaic’s first-quarter results show the strength of our business, which is able to meet customer needs while also delivering value for our shareholders,” said Joc O’Rourke, President and CEO. “Looking forward, we expect higher annual production across our global platform in both potash and phosphates, as a result of the completed ramp up of Esterhazy K3, a higher run-rate at Colonsay, and a recovery of phosphate output from our North American operations.”

Net sales in the Potash segment totaled $1.06 billion for the first quarter, up from $477 million last year, due to higher prices partially offset by lower volumes. Gross margin for the quarter was $579 million, compared to $140 million last year. Potash operating earnings totaled $563 million, and adjusted EBITDA was $651 million in the first quarter.

First-quarter potash sales volumes were down 188,000 mt compared to the 2021 first quarter, reflecting logistical constraints that delayed shipments. Mosaic said winter weather negatively impacted rail performance, which forced containment at its Colonsay and Belle Plaine mines.

Mosaic said Esterhazy K3 is now at its full MOP annual run rate of 5.5 million mt, and Colonsay is operating at an expanded annual run rate of 1.3 million mt. Total potash production is expected to exceed recent historical levels for the remainder of 2022, the company said. MOP cash costs were $81/mt in the first quarter, compared to $64/mt last year, with most of the increase resulting from higher price-related royalties that were up $12/mt from the first quarter of 2021.

Net sales in the Phosphate segment were $1.50 billion for the quarter, up from $1.00 billion last year, due to higher year-over-year prices, partially offset by lower volumes. Gross margin was $528 million, compared to $173 million last year. Phosphates operating earnings totaled $493 million and adjusted EBITDA was $632 million in the quarter.

Production of finished phosphates totaled 1.7 million mt in the quarter, down 9 percent year-over-year, and sales volumes totaled 1.7 million mt, down 19 percent year-over-year. Mosaic said shipments were negatively impacted by lower available inventories as well as poor rail performance due to Covid-related labor shortages. Rail cycle times are improving, Mosaic said, but will likely not reach normal levels until the end of the second quarter.

Mosaic said the price of ammonia realized in cost of goods sold increased to $532/mt during the quarter, up $216/mt from last year. The company said roughly 80 percent of its first-quarter ammonia consumption was internally produced or sourced from its long-term, natural gas-based CF Industries ammonia contract. Mosaic said it is receiving the maximum volume of ammonia, approximately 720,000 mt/y, under the CF contract.

Net sales in the Mosaic Fertilizantes segment were $1.49 billion for the quarter, up from $763 million last year due to higher year-over-year prices, partially offset by lower volumes. Gross margin was $219 million, compared to $103 million last year. Mosaic Fertilizantes operating earnings totaled $187 million and adjusted EBITDA was $233 million for the quarter. Mosaic said the segment’s results benefited from inventories built late in 2021 that were sold at higher market prices, especially toward the end of the first quarter.

Looking ahead, Mosaic said the war in Ukraine, ongoing supply chain constraints, and high crop prices that justify nutrient application all “point to persistent tight markets for both phosphates and potash.” The company expects Phosphate segment sales volumes of 1.9-2.1 million mt and Potash sales volumes of 2.4-2.6 million mt in the second quarter.

Realized pricing for both nutrients is expected to reflect market pricing on a 60-75 day lag as a result of the impact of delayed rail performance, Mosaic said. For phosphates, second-quarter DAP prices on an FOB basis are expected to be $140-$160/mt higher than in the first quarter. Phosphate production costs will be impacted by the rise in input costs, Mosaic said, though prices are expected to outpace the rise in raw materials. For potash, second-quarter MOP prices on an FOB basis are expected to be $40-$60/mt higher than prices realized in the first quarter.

Mosaic said growth investment in the business is expected to total approximately $400 million in 2022, reflecting the ramp up of Esterhazy K3, reserve additions for a mine extension at South Fort Meade, and other projects.

The company also said it is exploring expanded output across potash and phosphates through targeted debottlenecking projects and a restart of idled capacity. Mosaic said its global annual potash operating run-rate now stands at 10.8 million mt, but has the potential to grow by an additional 1.5 million mt by the second half of 2023. North American phosphate production in 2022 is expected to be roughly 1 million mt higher than production in 2021, the company said.

Mosaic said it expects to complete its goal of reducing long-term debt by $1 billion later this year with the retirement of $550 million, which matures in November. The company repurchased $422 million in shares during the first quarter, which includes the execution of the previously announced Accelerated Share Repurchase (ASR). Settlement of the ASR occurred on April 22 and required an additional payment of $54 million to compensate for the performance of MOS shares since the ASR was initiated on Feb. 24, the company reported.

Potash (millions) 1Q-22 1Q-21
Sales Volume (mt) 1.8 2.0
Gross Margin ($/mt) 323 71
Operating Earnings 563 125
Adjusted EBITDA 651 212
MOP Selling Price ($/mt) 582 200
Phosphate (millions) 1Q-22 1Q-21
Sales Volume (mt) 1.7 2.1
Gross Margin ($/mt) 318 84
Operating Earnings 493 153
Adjusted EBITDA 632 271
DAP Selling Price ($/mt) 785 477
Mosaic Fertilizantes (millions) 1Q-22 1Q-21
Sales Volume (mt) 1.8 2.1
Gross Margin ($/mt) 120 50
Operating Earnings 187 90
Adjusted EBITDA 233 104
Finished Product Selling Price ($/mt) 817 370

CF, Mitsui to Build Blue Ammonia Production Facility on Gulf Coast

Blue Ammonia, Featured, Green Ammonia, Japan, News, U.S. Gulf

CF Industries Holdings Inc. and Mitsui & Co. Ltd. on May 3 announced their intention to jointly develop a greenfield ammonia production facility in the U.S. Gulf Coast region. The new facility will produce blue ammonia by leveraging carbon capture and sequestration processes to reduce carbon emissions by more than 60 percent compared to conventional ammonia.

“Our work with Mitsui has reinforced our shared belief that blue ammonia will play a critical role in accelerating the world’s transition to clean energy and that demand for blue ammonia will grow meaningfully in the second half of this decade,” said Tony Will, CF President and CEO. “We believe that the U.S. offers considerable advantages for blue ammonia production due to access to plentiful and low-cost natural gas, the regulatory and legal framework in place, and the geology suitable for permanent carbon sequestration.”

The two companies said they have secured an exclusive right to acquire a Gulf Coast site suitable for an export-oriented production facility. CF will have 52 percent and Mitsui will have 48 percent ownership of the intended joint venture, with CF responsible for plant operations and maintenance and Mitsui leading the marketing and distribution of the blue ammonia into Asia.

The companies said they are also discussing a commercial expansion of the joint venture to leverage Mitsui’s considerable marketing and distribution capabilities into that market.

“We look forward to working with CF Industries to develop the low-carbon ammonia project in the U.S.,” said Takashi Furutani, Executive Managing Officer and Chief Operating Officer of Basic Materials Business Unit of Mitsui. “Energy solutions remain a strategic focus area for Mitsui; thus, we are excited to commence this new business opportunity with CF Industries in light of global climate action. As a responsible member of the global business community, we will continue to contribute to creating an eco-friendly and sustainable future.”

The companies anticipate that a 9-12 month front-end engineering design (FEED) study will commence shortly, with a final investment decision on constructing the facility expected in 2023. Assuming roughly four years for construction and commissioning, the new project would begin production in 2027 at the earliest.

CF also expects to produce up to 2 million tons/year of blue and green ammonia at its existing facilities beginning in 2024. This includes a $200 million investment to construct a CO2 dehydration and compression facility at its Donaldsonville Complex in Louisiana (GM Nov. 5, 2021).

CF said orders for all major equipment items have been placed and detailed engineering is well underway for the Donaldsonville project. Once the unit is in service and sequestration is initiated, the facility will be able to produce up to 1.7 million tons of blue ammonia per year, CF said, which is equivalent to 1 million tons of net-zero carbon ammonia.

“We believe that ammonia will play a critical role in accelerating the world’s transition to clean energy and that demand for blue ammonia for this purpose will grow meaningfully in the coming years,” Will said. “Our intended joint venture with Mitsui and our project to enable a significant volume of blue ammonia from Donaldsonville starting in 2024 confirms our position at the forefront of this emerging global market.”

Plant Nutrient Revenue Up for Compass Minerals

Earnings, News, Southern Plains, Specialty

Compass Minerals, Overland Park, Kan., on May 5 reported that its Plant Nutrient segment posted second-quarter revenue of $54.3 million, up 1 percent from last year’s second quarter, with the increase driven by a 28 percent increase in average sales prices largely offset by lower sales volumes.

Second-quarter operating earnings for the segment fell $0.9 million year-over-year, however, to $4.4 million, while EBITDA for the quarter was reported at $13.2 million, down from $14.1 million in the 2021 second quarter. The company said favorable pricing was offset by higher per-unit costs and lower production volumes.

Second-quarter operating margin for the Plant Nutrient segment was 8 percent compared to 10 percent last year, the company reported, and EBITDA margin was 24 percent compared to 26 percent last year.

Second-quarter Salt segment revenue totaled $391.3 million, up 6 percent year-over-year, which the company said reflected a 6 percent increase in sales volumes primarily driven by higher North America highway bid season commitments. Salt segment average sales prices were flat year-over-year, with a 3 percent decline in highway deicing average sales prices partially offset by a 9 percent increase in industrial (C&I) average sales price.

“Compass Minerals delivered year-over-year revenue growth during the quarter, in large part enabled by our expanded Salt commitments and strong Plant Nutrition pricing,” said Kevin S. Crutchfield, Compass President and CEO. “Unfortunately, intensifying inflationary pressures – particularly related to escalating fuel surcharges – and ongoing SOP production challenges continued to compress profitability to levels below what I believe is our normalized earnings potential.”

Salt segment operating earnings in the second quarter decreased $42.3 million to $49.3 million year over year, while EBITDA declined $44.1 million to $65.5 million over the same period. Salt segment operating margin was 13 percent in the second quarter, down from 25 percent last year, and EBITDA margin decreased to 17 percent from 30 percent over the same period, primarily due to higher distribution and production costs and lower highway deicing pricing.

Second-quarter consolidated revenue for the company was up 5 percent year-over-year, driven by the increase in highway deicing sales volumes, an 8 percent improvement in consumer and industrial (C&I) sales volumes, and higher Plant Nutrition and C&I pricing. Consolidated operating earnings for the quarter decreased $56.0 million to $20.0 million year-over-year, and Adjusted EBITDA was lower by $47.7 million over the same period, to $64.8 million, primarily driven by higher distribution and production costs.

“We are focused on mitigating the impact of these challenges to the extent possible through continued pricing actions, executing a successful North America highway salt bid season, balancing production volumes with expected demand to improve margin capture, and targeted productivity initiatives,” Crutchfield said.

The company has lowered its estimate of fiscal 2022 consolidated adjusted EBITDA to a range of $170-$200 million from its previously announced range of $200-$235 million, largely due to escalating fuel surcharges across all transportation modes in its Salt segment and continued SOP production yield challenges. Compass said these impacts are expected to only be partially offset by higher pricing in Plant Nutrition and targeted productivity initiatives.

Plant Nutrition (millions) 2Q-22 2Q-21
Sales 54.3 53.7
Operating Earnings 4.4 5.3
EBITDA 13.2 14.1
Sales Volumes (000 tons) 74 94
Avg. Sales Price ($/ton) 736 573
Salt (millions) 2Q-22 2Q-21
Sales 391.3 369.0
Operating Earnings 49.3 91.6
EBITDA 65.5 109.6
Sales Volumes (000 tons) 5,331 5,028
Avg. Sales Price ($/ton) 73.39 73.38
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