Bloomberg News

Mosaic Beats Profit Estimate on Potash Sales at Top of Range

March 28, 2013

Mosaic Co. (MOS:US), the largest U.S. fertilizer producer, reported fiscal third-quarter profit that beat analysts’ estimates as potash sales came in at the high end of the company’s forecast because of Asian demand.

Net income (MOS:US) rose to $344.6 million, or 81 cents a share, in the three months through February, from $273.3 million, or 64 cents, a year earlier, Plymouth, Minnesota-based Mosaic said today in a statement. Profit, excluding the cost of an antitrust settlement and other one-time items, was 90 cents a share, beating the 88-cent average of 17 estimates (MOS:US) compiled by Bloomberg. Sales increased 2.3 percent to $2.24 billion, trailing the $2.3 billion average of 15 estimates.

“It was a solid quarter,” Matthew Korn, a New York-based analyst at Barclays Plc, said today in a telephone interview. “These results signal a positive underlying view of global demand for potash and phosphates.”

Mosaic rose 1.6 percent to $59.61 at the close in New York. The shares (MOS:US) have increased 5.3 percent this year.

Mosaic sold 1.8 million metric tons of potash in the fiscal third quarter, compared to its January forecast of 1.5 million to 1.8 million metric tons, according to the statement.

“Following the signing of India and China contracts, which delivered better than expected demand from these two countries, we saw improving potash fundamentals and sentiment around the world,” Mosaic Chief Executive Officer Jim Prokopanko said today in the statement.

Chinese Agreement

Canpotex Ltd., the offshore marketing arm of Mosaic, Potash Corp. of Saskatchewan Inc. and Agrium Inc. (AGU), said on Dec. 31 that it would sell 1 million tons of potash to China at $70 less a ton than China’s previous price. The deal works out to about $400 a ton.

Global shipments of both nutrients will rise to records this year, buoyed by demand in Asia, Prokopanko said today in a telephone interview from company headquarters.

“Based on current agricultural commodity prices, fertilizer prices are about as affordable to farmers as they’ve ever been,” Prokopanko said.

In the current fiscal quarter, Mosaic said it expects to sell 2.3 million to 2.6 million tons of potash, a nutrient that helps crops withstand dry conditions. A year earlier, the company sold 2 million tons.

The average potash price will be $350 to $380 a ton in the fiscal fourth quarter, according to the statement. That compares with $455 a year earlier.

Mosaic said it sold diammonium phosphate, a type of crop nutrient, for an average of $496 a metric ton in the fiscal third quarter, down from $536 a year earlier. In January, the company forecast its DAP price would fall to $485 to $515 a ton in the fiscal third quarter.

The company said today it expects phosphate sales in the current quarter of 2.6 million to 2.9 million tons. That compares with sales of 2.9 million tons a year earlier.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editor responsible for this story: Steven Frank at sfrank9@bloomberg.net


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