Mosaic Continues $4.7 Billion in Projects Despite Grim Outlook

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Mosaic Company (NYSE:MOS) (Plymouth, Minnesota) has reported a second-quarter 2009 net income of $959.8 million, up 143.6% compared with $394 million in the same period last year. The gain is largely attributed to higher selling prices and a pre-tax gain of $673 million from the sale of the company's stake in fertilizer company Saskferco Products Incorporated. Net sales totaled $3 billion, up nearly 37% compared with $2.2 billion in the same period last year. However, the company said it expects demand to soften at least through the third quarter. "In light of the weak demand outlook, we are prepared to reduce potash production by up to 1 million tons in the second half of this fiscal year to better control our inventory levels," Chief Financial Officer Lawrence Stranghoener said. "This includes the impact of reduced production rates, which we undertook during the recent holiday season."

Mosaic has updated its capital-spending guidance to between $800 million and $900 million this year, down from the previous range of $900 million to $1.1 billion, Stranghoener said. The company is preparing to reduce costs more aggressively if the market remains soft, President and CEO James Prokopanko said. "We are taking steps to reduce planned capital expenditures even as we continue investing in projects to improve productivity," he said.

As part of our North American Project Database, Industrial Info is tracking 36 active projects involving Mosaic worth $4.7 billion. The projects range from $1 million maintenance turnarounds to a $1 billion expansion project.

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