The Mosaic Company (MOS) reported first quarter fiscal 2013 net earnings of $429 million, compared to $526 million a year ago. Earnings per diluted share were $1.01 in the quarter compared to $1.17 last year. The year-over-year decline was primarily driven by lower phosphate volumes and prices. In the first quarter of 2013, earnings per diluted share were negatively impacted by notable items totaling $0.02. Mosaic’s net sales in the first quarter of fiscal 2013 were $2.5 billion, down from $3.1 billion last year also primarily driven by lower phosphate volumes and prices.
"The long-term outlook for crop nutrition is outstanding, and Mosaic is well positioned as the world’s largest potash and phosphates producer," said Jim Prokopanko, President and Chief Executive Officer of Mosaic.
Mosaic’s gross margin for the first quarter of fiscal 2013 was $747 million, or 30 percent of net sales, compared to $848 million, or 28 percent of net sales, a year ago. First quarter operating earnings were $610 million, a decrease of 16 percent compared to $730 million a year ago. The decreases in gross margin and operating earnings were primarily driven by lower phosphate net sales.
Cash flow provided by operating activities in the first quarter of fiscal 2013 was $339 million compared to $554 million in the prior year. Cash flow in the current quarter was negatively impacted by higher inventories and a sequential decline in customer prepayments. Capital expenditures totaled $449 million in the quarter. Mosaic’s total cash and cash equivalents were $3.6 billion and long-term debt was $1.0 billion as of August 31, 2012.
Quarterly Business Highlights
• Potash expansion projects continue to be on time and on budget with expenditures of $158 million in the quarter.
• Mosaic achieved a record low quarterly recordable injury frequency rate during the quarter, continuing to build upon the improvements made last year.
• Mosaic ramped up production at South Fort Meade to full capacity, replenished phosphate rock inventory and plans to resume shipping rock to its facilities in Louisiana in the second fiscal quarter.
• The Company made substantial operational improvements related to water use at the Riverview phosphates plant, avoiding a planned $50 million capital improvement in a reverse osmosis water treatment plant, which resulted in a $7 million write off of investments to date.
• The Company has committed additional capital to continue the feasibility work to expand the Company’s ammonia production capacity.
• Mosaic launched "Pursuit of 300SM:The Road To Higher Yields", a program that uses farmers’ real-world experiences as a launch pad for agronomists, researchers, retailers and industry stakeholders to create the next generation of cropping systems.
Click here to see the full report.