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Released July 17, 2013 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading miner and fertilizer producer The Mosaic Company (NYSE:MOS) (Plymouth, Minnesota) saw weakened realized prices drive down sales and earnings for potash and phosphate in its 2013 fiscal year, despite record potash shipments in the fourth quarter. Net earnings were reported to be $485.9 million for the quarter, a 4.22% decrease from fourth-quarter 2012, and $1.89 billion for the year, a 2.15% decrease from fiscal 2012.
Net sales stood at $2.69 billion for the quarter, a 4.55% decrease from the same period last year, and $9.97 billion for the year, a 10.21% decrease from fiscal 2012. The Potash segment hit a quarterly record in sales, with 2.6 million tonnes of product delivered. In particular, the company's MicroEssentials product saw record sales for both the quarter and the year, including a 28% gain over fiscal 2012. However, strong sales and shipments were offset by lower realized prices for finished products, partly a result of weaker MOP market prices. Mosaic also had to deal with detrimental factors such as a late and relatively short North American spring planting season.
The Phosphate segment also suffered from weaker finished product prices, although some of the losses were offset by lower phosphate rock costs, which dipped from $71 to $64 per tonne. Among the factors that lowered costs was a return to full production at the South Fort Meade mine in fiscal 2013.
Capital expenditures were reported to be $347.9 million for the quarter, compared with $449 million in fourth-quarter 2012, and $1.59 billion for the year, compared with $1.64 billion in fiscal 2012.
"It was a tough spring planting season for farmers here in North America," said Jim Prokopanko, the president and chief executive officer of Mosaic, in a conference call. "Warm weather came very late, and just six months after drought battered the 2012 crop, the spring of 2013 brought drenching rains to most of the Corn Belt. Some of the same fields that were plowed under for lack of rain last year were puddle and too wet for planting this year. The Mississippi River, once so dry that navigation nearly came to a halt, was again difficult to navigate--this time because of flooding."
Industrial Info is tracking $4.87 billion in active projects involving Mosaic, including the $1.4 billion, second-stage expansion of an underground potash mine in Esterhazy, Saskatchewan. The project, which is part of a larger, $2 billion expansion, involves installing and upgrading mine and milling equipment to increase capacity to 3.3 million metric tons per year, as well as the addition of brine ponds to increase the withdrawal and injection rate. The first stage was completed in the fourth quarter of calendar 2012.
Mosaic executives expect current price weaknesses will moderate as the calendar year continues, with demand growth, particularly for grain and oilseeds, gradually making up for an additional supply of phosphate and potash. The phosphate market is expected to balance out over the medium term, and potash shipments are expected to hit near-record levels by early calendar 2014. Phosphate segment sales are expected to be between 2.9 million and 3.3 million tonnes in the current quarter, compared with 2.9 million in the same period last year, while Potash segment sales are expected to be between 1.8 million and 2.1 million tonnes, compared with 1.8 million. However, the Potash segment's operating rate is expected to decline during this and the coming quarter, due to seasonal maintenance and a cutback in production at the Colonsay Mine.
About $948 million in capital expenditures on Potash segment expansions have been authorized by the company's board.
"Farmers still have strong incentive to maximize yield, and to maximize yield, they need fertilizer," Prokopanko said in the conference call. "Grain and oilseed prices have declined in anticipation of a big crop, which would be a welcome development for global food security. But prices remain high enough to deliver good farm profits, especially given the affordability of crop nutrition and other inputs."
He later added: "We do not expect [grain and oilseed] prices to suffer dramatically... We expect lower prices to unleash significant pent-up demand for grain and oilseeds this year, which should raise the floor under prices."
For more information, visit Industrial Info's North American Metals & Minerals Project Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Net sales stood at $2.69 billion for the quarter, a 4.55% decrease from the same period last year, and $9.97 billion for the year, a 10.21% decrease from fiscal 2012. The Potash segment hit a quarterly record in sales, with 2.6 million tonnes of product delivered. In particular, the company's MicroEssentials product saw record sales for both the quarter and the year, including a 28% gain over fiscal 2012. However, strong sales and shipments were offset by lower realized prices for finished products, partly a result of weaker MOP market prices. Mosaic also had to deal with detrimental factors such as a late and relatively short North American spring planting season.
The Phosphate segment also suffered from weaker finished product prices, although some of the losses were offset by lower phosphate rock costs, which dipped from $71 to $64 per tonne. Among the factors that lowered costs was a return to full production at the South Fort Meade mine in fiscal 2013.
Capital expenditures were reported to be $347.9 million for the quarter, compared with $449 million in fourth-quarter 2012, and $1.59 billion for the year, compared with $1.64 billion in fiscal 2012.
"It was a tough spring planting season for farmers here in North America," said Jim Prokopanko, the president and chief executive officer of Mosaic, in a conference call. "Warm weather came very late, and just six months after drought battered the 2012 crop, the spring of 2013 brought drenching rains to most of the Corn Belt. Some of the same fields that were plowed under for lack of rain last year were puddle and too wet for planting this year. The Mississippi River, once so dry that navigation nearly came to a halt, was again difficult to navigate--this time because of flooding."
Industrial Info is tracking $4.87 billion in active projects involving Mosaic, including the $1.4 billion, second-stage expansion of an underground potash mine in Esterhazy, Saskatchewan. The project, which is part of a larger, $2 billion expansion, involves installing and upgrading mine and milling equipment to increase capacity to 3.3 million metric tons per year, as well as the addition of brine ponds to increase the withdrawal and injection rate. The first stage was completed in the fourth quarter of calendar 2012.
Mosaic executives expect current price weaknesses will moderate as the calendar year continues, with demand growth, particularly for grain and oilseeds, gradually making up for an additional supply of phosphate and potash. The phosphate market is expected to balance out over the medium term, and potash shipments are expected to hit near-record levels by early calendar 2014. Phosphate segment sales are expected to be between 2.9 million and 3.3 million tonnes in the current quarter, compared with 2.9 million in the same period last year, while Potash segment sales are expected to be between 1.8 million and 2.1 million tonnes, compared with 1.8 million. However, the Potash segment's operating rate is expected to decline during this and the coming quarter, due to seasonal maintenance and a cutback in production at the Colonsay Mine.
About $948 million in capital expenditures on Potash segment expansions have been authorized by the company's board.
"Farmers still have strong incentive to maximize yield, and to maximize yield, they need fertilizer," Prokopanko said in the conference call. "Grain and oilseed prices have declined in anticipation of a big crop, which would be a welcome development for global food security. But prices remain high enough to deliver good farm profits, especially given the affordability of crop nutrition and other inputs."
He later added: "We do not expect [grain and oilseed] prices to suffer dramatically... We expect lower prices to unleash significant pent-up demand for grain and oilseeds this year, which should raise the floor under prices."
For more information, visit Industrial Info's North American Metals & Minerals Project Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
