The Mosaic Company reports third quarter net income of $122 million, Adjusted EBITDA of $448 million

• Third quarter net income of $122 million, Adjusted EBITDA⁽¹⁾ of $448 million

• Clint Freeland to retire at year-end; to be succeeded by Luciano Siani Pires as CFO

• Phosphate production returned to full operating capacity after recent impacts from three hurricanes and on track to reach target annual run rate by the end of this year

• Mosaic Biosciences achieved 9 million acres of coverage in key markets this year

• Year-to-date capital return to shareholders of $415 million, including $210 million of share repurchases 

The Mosaic Company (NYSE: MOS), reported net income of $122 million, or $0.38 per diluted share, for the third quarter of 2024. Adjusted EPS⁽¹⁾ was $0.34 and Adjusted EBITDA⁽¹⁾ was $448 million.

"The resilience we have developed over many years enabled us to recover quickly from the recent weather events and other operations interruptions that impacted our third quarter performance" said President and Chief Executive Officer Bruce Bodine, "As we continue to restore our asset reliability and execute on our capital deployment strategy, Mosaic is positioned to benefit from the solid market environment for the remainder of the year and into 2025.

The company also announced today that Clint Freeland intends to retire from his role as Executive Vice President and Chief Financial Officer. Luciano Siani Pires will join Mosaic as CFO designate effective November 18, 2024 and will succeed Mr. Freeland as Executive Vice President and Chief Financial Officer on January 1, 2025. Mr. Freeland will continue as a senior advisor until July 1, 2025.

Mr. Siani Pires formerly served on the Mosaic Board of Directors and was previously Chief Financial Officer at Vale S.A., a global mining company, where he was most recently Executive Vice President of Strategy and Business Transformation. He intends to relocate to the Tampa area from Rio de Janeiro, Brazil, in the coming months.

″Clint has been an outstanding CFO for Mosaic, and he leaves the company in excellent financial condition. We wish him all the best,″ Bodine said. ″My colleagues on the Mosaic Board of Directors and I have every faith that Luciano, whom we know well from his years of exemplary board service, will drive further success as we pursue shareholder value creation.″

Third Quarter Results Highlights:

• Third quarter revenues totaled $2.8 billion, down 21 percent from the year ago period, primarily reflecting the impact of lower selling prices. The gross margin rate in the third quarter was 15 percent, up from 12 percent in the year ago period.

  
  

• Net income in the third quarter totaled $122 million, compared with a net loss of $4 million in the year ago period. Current period results reflected the after-tax impact of notable items totaling $15 million. Adjusted EBITDA⁽¹⁾ totaled $448 million, compared with $594 million in the third quarter of 2023. Third quarter cash from operating activities totaled $313 million compared to $647 million in the year-ago period.

  
  

• Mosaic Fertilizantes reported operating earnings of $56 million in the third quarter, compared with $77 million in the prior year period. Adjusted EBITDA⁽¹⁾ totaled $83 million during the quarter, decreasing from $147 million in the third quarter of 2023, primarily driven by a $32 million bad debt reserve and higher than normal legal reserves. A majority of the bad debt reserve is expected to be recovered through credit insurance in the future.

  
  

• Potash operating earnings were $109 million in the third quarter, compared to $200 million in the year ago period. Adjusted EBITDA⁽¹⁾ totaled $180 million, compared to $267 million in the same period last year, reflecting the impact of lower selling prices and lower sales volumes. Potash operations have returned to full capacity after the electrical issues at Esterhazy and Colonsay, which reduced third quarter production volumes by approximately 250,000 tonnes and impacted sales volumes during the quarter.

  
  

• Phosphate operating earnings were $8 million in the third quarter, compared to a loss of $58 million in the prior year period. Adjusted EBITDA⁽¹⁾ totaled $265 million, compared to $201 million in the third quarter of 2023, reflecting higher average selling prices, partially offset by lower sales volumes resulting from weather events.

Portfolio and Capital Allocation Highlights:

• Mosaic has made significant progress on high-return, low-capital-intensity projects.

  
  

• The 800,000 tonne Riverview MicroEssentials capacity conversion and the 500,000 tonne Esterhazy potash compaction project were completed in the second quarter and are fully ramped up;

• The Esterhazy Hydrofloat project, which is expected to add 400,000 tonnes in milling capacity, is on track to be completed by mid-2025;

• The construction of a 1 million tonne blending facility in Palmeirante, Brazil is on track to be completed in the third quarter of 2025.




• Mosaic Biosciences products were used on 9 million acres in key markets during the current year compared with 3.9 million in the prior year.

  
  

• The company is making progress on the cost reduction plan announced last year and is on track to achieve the targeted $150 million run rate by the end of 2025 compared to the 2023 baseline. Mosaic is also on track to reduce 2024 capital expenditures by $200 million from the 2023 level.

  
  

• Mosaic has returned $415 million of capital to shareholders in the first nine months of 2024, including share repurchases totaling $210 million.

  
  

• The Carlsbad potash operation in New Mexico is under strategic review.

Third Quarter Segment Results

Net sales in the Mosaic Fertilizantes segment were $1.4 billion, down from $1.7 billion in the prior year period due primarily to lower pricing. Gross margin was $128 million, compared to $106 million for the same period a year ago.

Operating results were negatively impacted by lower average selling prices, lower sales volumes, $32 million of bad debt reserves that were recorded in selling, general and administrative costs (SG&A), and higher than normal legal and environmental reserves which were partially offset by lower raw material and operating costs.

Fourth quarter distribution margin is expected to reflect normal seasonality. 

Net sales in the Potash segment totaled $526 million, down from $720 million one year ago. Gross margin was $122 million compared to $210 million in the third quarter of 2023. Gross margin per tonne was $61 compared to $95 in the prior-year period. Sales volumes totaled 2.0 million tonnes, down from 2.2 million tonnes in the prior year quarter.

Operating results were negatively impacted by lower average selling prices and sales volumes.

Sales volumes in the fourth quarter are expected to be in the range of 2.2-2.4 million tonnes. We expect realized mine-gate MOP prices in the range of $200-$220 per tonne. 

Net sales in the Phosphate segment were $1.0 billion, flat from the prior year period. Gross margin was $142 million, compared to $88 million for the same period a year ago. Gross margin per tonne was $96 compared to $53 in the prior-year period.

Sales volumes totaled 1.5 million tonnes, down 11 percent from a year ago, and production volumes totaled 1.6 million tonnes, up 2 percent from the prior year.

Operating results were driven by favorable averaging selling prices on the strength of the phosphate market, partially offset by lower sales volumes caused by the recent weather events.

Central Florida mines and plants have returned to full operations as recovery efforts were completed in October.

Sales volumes in the fourth quarter are expected to be 1.6-1.8 million tonnes which reflects the hurricane impacts. DAP prices at the plant are expected to be in the range of $570-$590 per tonne. Fourth quarter realized stripping margins are expected to remain above historical levels. 

Other

SG&A including the aforementioned $32 million bad debt reserve recorded in the Mosaic Fertilizantes segment were $383 million in the first nine months of 2024, up $5 million from $378 million in the year-ago period. Mosaic recognized earnings from equity investments of $64 million in the first nine months of 2024.

Market Outlook

Grain and oilseed fundamentals are strong. Improving corn and soybean prices around the world and solid prices for other crops continue to incentivize farmers to apply fertilizers. Government mandates for ethanol consumption in India, Indonesia and Brazil, as well as other biofuel policies, are becoming incrementally constructive and are expected to provide a long runway for grain and oilseed demand expansion, driving steady growth in fertilizer shipments for the long term.

North America is expected to have a long fall fertilizer application season as harvest has progressed ahead of schedule. Weather conditions in Brazil have improved since mid-October and this should limit the delay in planting of the Safrinha crop.

The phosphate market is expected to remain tight well into 2025 driven by supply constraints and increasing demand for fertilizer, fuel, and industrial uses. Chinese phosphate exports for the first 9 months of 2024 declined 8 percent or over half a million tonnes from the prior year, and the long-term outlook remains favorable as Chinese domestic use and industrial needs will continue to be prioritized over fertilizer exports.

The global potash market remains balanced driven by demand growth and record consumption across the globe. Prices around the world have reached bottom and are moving higher while remaining affordable, which bodes well for demand next year. 

⁽¹⁾ See ″Non-GAAP Financial Measures″ for additional information and reconciliation.

⁽²⁾ Average MOP Selling Price (fob mine)

⁽³⁾ Average DAP Selling Price (fob plant)