Mosaic Earnings Exceed Expectations

July 17, 2012 04:22 AM

The Mosaic Company reports stronger-than-expected fourth quarter fiscal 2012 net earnings of $507 million, compared to $649 million a year ago. Earnings per diluted share were $1.19 in the quarter compared to $1.45 last year. The company says year-over-year decline was primarily driven by lower phosphate pricing. In the 2012 quarter, earnings per diluted share were negatively impacted by notable items totaling $0.06. Mosaic's net sales in the fourth quarter of fiscal 2012 were $2.8 billion, roughly flat with the same period last year, as growth in realized potash prices was offset by lower prices in phosphates.

"The extended spring season in North America, along with continuing strong demand for our products in Central and South America, led to solid financial results for the quarter. Despite challenging market conditions for much of the fiscal year, Mosaic made great progress. We improved our operating efficiency in both potash and phosphates, made substantial headway on our potash expansion projects, set new records for premium product sales and cash from operations, and, most important, our people delivered our best safety performance ever," said Jim Prokopanko, the company's president and chief executive officer.

Quarterly Business Highlights

  • Mosaic generated $1.2 billion in cash from operations, approximately $800 million after capital expenditures.
  • The Company began operating at the South Fort Meade mine following judicial approval of settlement terms on March 28, 2012. The mine is expected to be at full production by the end of August 2012.
  • Potash expansion projects continue to be on time and on budget with expenditures of $180 million in the quarter.
  • Mosaic recorded the lowest lost time injury rate in the fourth quarter compared to any other period since the Company's formation.
  • Mosaic made significant progress in improving operating efficiencies:
    • In Phosphates, achieved annualized cost avoidances and cash savings of over $200 million to date
    • In Potash, realized $80 million in annualized savings to date
  • Mosaic set a new record for sales of the premium product MicroEssentials®. The Company completed new manufacturing capacity and is now able to produce 2.3 million tonnes of MicroEssentials per year.
  • Mosaic was recognized on Corporate Responsibility Magazine's 12th annual 100 Best Corporate Citizens List for the third year in a row, and is the only crop nutrient company on that list. Mosaic was ranked 28 -- up from 67 in 2011 -- in recognition of its conservation and environmental stewardship efforts, as well as its financial and governance transparency.


Looking forward
Mosaic expects another good year in 2013, with continuing growth in global demand for crop nutrients. "Despite the current drought in the U.S. Corn Belt, farm economics remain compelling, and farmers around the world continue to be incented to use our products to increase their crop yields," says Prokopanko. "Our unique combination of assets, proven execution ability and capital strength position us to help the world grow the food it needs, and to deliver shareholder value."

Link to full press release.




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