MOS - Earnings call transcript Q4 2017

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Laura Gagnon

Thank you and welcome to our fourth quarter and full year 2017 earnings call. Presenting today will be Joc O'Rourke, President and Chief Executive Officer.

We also have other members of the senior leadership team available to answer your questions after our prepared remarks. The presentation slides we are using during the call are available on our website at mosaicco.com.

We will be making forward-looking statements during this conference call. are results. to but financial about include operating and statements not statements limited future The based management's risks are and They on are today's as subject date of to significant and beliefs uncertainties. and expectations differ materially results. Actual results from may projected Factors filed from in that and with in press the the materially and yesterday, Commission. included those release are Securities could issued results statements in differ actual our cause to forward-looking our Exchange reports

non-GAAP certain financial presenting be also will We measures.

the data fourth filing Form quarter to press as Our on measures. X-K performance contain non-GAAP attached information and important also exhibits release these

to Joc. like I'd turn Now, the call to over

Joc O'Rourke

Good our year full you morning. XXXX Thank for fourth quarter joining earnings call. and

We today are plenty your of prepared remarks to our for and at a allow keep high time level going questions.

I to team. our this to CEO to I results, would and me Interim been CFO since a Before like welcome of role. Brausen, for valuable we time leadership He has prepare became is his helping into take Tony earnings get every the member

earnings, underlying Now the loss related new not legislation. of let's strength non-cash move on $XXX include reflect the million it U.S. although we $XXX a the million, of charge a Reported does results net business. to GAAP reported tax to

quarter, to legislation ago. expand successful Mosaic's to the enters of today, value first the XXXX. five cash years. improving significant three XX% messages a year take would continue cycle. to Going conditions quarter driven shareholder up and from by strong to expect like momentum, away the decisions, EBITDA was important as over the we the performance forward strategic we We during with our head strategic into operating market across new benefits strong excess of and key in million actions record in we provide you $XXX next XXX a million year

conditions the improved call. on Second, and highly business with XXXX and we our And savings markedly outlined to in last complete continue in achieving Brazil we we acquisition focused year. third, expect the momentum transformation target now are in business this

a charges items, of on per $X.XX reported For billion. related per the $X.XX other excluding notable Mosaic X.X of tax share, quarter sales loss adjusted earnings share with and

share For a net $X.XX the billion. sales item of earnings $X.XX notable of per per year company a adjusted at share loss with of reported on the X.X

Our financial removing response facility but the year our lowest market optimizing driven Last ton to cost these by a our we initiatives. production to our demonstrating meaningful was review I'll solid idled made transform annual X.X generating decisions from ago. in commitment margin important business to performance and gross global Florida $XX facilities by per business expanded conditions improving quickly. reduction our decisions cost We unit phosphate rate ton City also are of in finished benefits. Plant those quarter from $XX and rose year Phosphate supply. prices in our and from fourth a million product tons our

the transformation transformation reduce where along, the addition, expected further In phosphates is a on to is embarked further processes to lead margin business the potash expansion. and effort major costs, In that improved also assets. high meet our of cost the remained or and to our produced integrity record near people reduced we the demand compromising safety spending historical at of we lows without capital while rates our global business

At Taken to to strengthened the and decisions future together capital returns. ability work time, flow related our these costs benefits put and cash significant generate we provided capital same prosper. to

first have produced major We completion the and Esterhazy progress meaningful also is new strategic complex potash our on KX from made the of tons we initiatives, facility. our nearing good

world eliminate over will as expenses. the allow We mines expect potash Esterhazy to KX to us be cost lowest management the brine amongst time in

other The production terms Mosaic and several Asian phosphate us markets access by on our renegotiated so dollars. access Paraguay to India regions. Our of and hundred we and to and [indiscernible] production million key Mosaic benefit ramping access that is the venture with America's cost did complex course ever joint with low agricultural largest customers Fertilizantes providing to completed Ma'aden to formed acquisition makes in in newly advantaged Mosaic we powerhouse were Brazil and advantage

team the off total and Brazil running we $XXX revealed Our last million synergies is and working is the quarter. deliver transform to business in

$XXX synergies to those and million year any them. expect We is achieve at to that after alone this of in achieve cost least

this achieved have progress in the to million not stopping will cost exit those we great run and already XXXX, of Overall, there. achieve fact, in synergies booking with first quarter In a be a we we made and the rate $XX to we of quarter. associated plan having charge deal are

efficiency drive portfolio of continue for will to our while improvements value maximizing world. all the around We the asset

have terms With we cash acquisition. financial also Vale portion of fourth business the the operations performance million quarter continued financial of during the to focus from in We XXX on issued which paydown improved transferred a Fertilizantes over the for priorities with outstanding billion $X leverage our $X.XX maintaining of the XXXX, cash to generated debt term of we're the our and billion In debt foundation. approximately ratio EBITDA. finance acquisition begins towards times are strong to stronger we in of half XXXX $XXX of our just of we outlook targeted our to two and able to XXXX two loan. million and net cash our quarter progress we already the also Under a making renegotiated

end overall we million of of to financial competitive use cash global a is way efficient to The Mosaic our by and XXXX. retirement expect at debt on are to are we making message halfway the footing scale solid $XXX XXXX and total to least the of our original which million our we on conditions. regardless highly on a of paydown During here goal well $XXX business is that

of large of conclude conditions. have Potash years update because expectations been market new phosphate several I provide part and capacity. to a Before I for brief want on prices significant low in

another moved begin forces, primary economic now to factors. two Demand shipments prices Potash record tons market first to been for to global expects both new due and our upward those to year grow resilient and global continued demand as has positive has Now products. analysis to phosphate due have market come of team and

The and or permanently we continue the fewer actions on driving stopped. to year to higher production cost that is idle Markets believe the first prices XXXX. the strengthen business many our factor coming delivered taken half expected. those been performance are fertilizer has the fundamentals tons solidify in by that tons were are And offset higher strong second for capacity quite of is new market being to that we've with will

align first time segments and new to annual guidance. the are earnings providing guidance share for our simplified with have better our we We per

wide which We adjusted of of changes in opportunity our range risk products, market expect share $X our $X.XX. the inherent at to and range this in reflects the stage early for uncertainty and and the per prices earnings The provides year to annual the magnitude in timing both forecast.

ensuring Our two primary operate capturing of second, synergies. focus continue and that first, [Indiscernible] Mosaic we areas are for efficiently to

impact watching exchange profitability. and We also are have the Brazilian dollar reais they the rates our on Canadian given

we amount and to will the as have have Mosaic, highest the we with will continuing many market the we integrity and Our At several continue are commitment enjoyed not strengthen long-term. operate they advantage an conditions our make for made One over company our took and structural of enormous FX to years. to of to and change industry changed past improvements area constituents. the company maintain and responsibly degree of that change, our will we

groups. the governments needs, those point Our non-government because our constituent the organizations easy lose is communities, it this enterprise sight all and of challenging those the customers big and this employees, sustainability important make who I shareholders, prosperity because of picture is serve and time. to to

that the to day bring market and in changes vision to a transcends that provision. intend we day have We vision to fully

Now Stanley. Operator? Instructions] from Our Vincent will take Andrews Morgan questions. your first comes question [Operator with

Vincent Andrews

and help what bit be of of on yet year look XXXX wondering you terms the you about synergies in understand the other the year. I assets when are your can you've but more pro incorporates maybe this little one-off Just guided is base give some should and for I last that just strip what relate anticipating had we mean you guess sort fourth the the non-GAAP you thinking date expectations at fertilize that formas have of levels think per in quarter to production year-over-year? issues profit I and wholesale don’t that Thanks. what detail the I we you results just the a a perspective of it how that know could or growth us out from company and as on to ton as if

Joc O'Rourke

Well, good thanks your morning question. Vincent for

our of little expectations business excited. what am we’re we we’re are are where opportunity I sites very we start what last is by I business about Fertilizantes me the weeks our the or going are excited just and start by combined let a Mosaic saying ago, so see what let touring this at bit for Rick saying that we that me talk we BXB not, let and volume wholesale can about the but is businesses So distribution there business and go, to guiding there pretty where which expect and Rick to much now two expectations calling and

our a couple can here of the drive you $XXX also examples in really as across we believe good look the expect processing a and add well much about, places efficiencies both give at the and in we support $XXX don’t is making that see much including opportunities value, functionaries too of there, we and synergy talk go-to-market the we we mining those towards one what progress million normal huge The hear kind of benefits think areas. I’ll year. we net where As I see million and strategy you we opportunities this can to we as real do don’t we’re those

So that’s let you be of quarter. achieve that. as I that earlier will mentioned a them. in where first couple me to give going cost with good be my just actually in net And an But the we’re we’ll any having for allowance of we remarks, examples of

you booked see going equipment million gypsum net starting labor, that the reduction we rethinking have on achievement per our in million already us one pricing won’t to seed $X.X range basically all, will benefit gypsum million million our equipment per quarter area net the in And comment rethinking this approximately and for year. $X core will year to of optimization of synergies, of are about of about year. and we’re on the [ph] $XX marketing strategy this million us strategy a First around first $XX $X.X probably a

go this year million hit $XXX $XXX lot next. confident we’re that things in our got we to I’m and and very the the So, a on our of going million

of you end remind Before other is year previous give to deal that one I of over just to and at Rick, I business this of underlying, the in underperformance to years. renegotiated thing was it due last the of which want we the part

into renegotiate solid So, that we and so allowed returns is the very an overall, overtime. expect low, baseline still but

production. hand on So, just give it let Rick? to over ideas you me some Rick

Richard Mack

Vincent. Yeah. in Thanks, the the distribution in expectation Joc. here business see as so grows morning, we of Brazil. side, X.X% increase distribution volume perspective market is our Good here from the our overall the tons on growing to X%

distribution we path, we’re share on very a the So, us market comfortable side. following that see that at with we’re

in give lot honest a are and can something all future. employees done XXX that our number that on this the here both for of year XXX things in the John. we're million I add comments I the there X million of effects. for us to thing really XXX with for Fertilizantes up target areas your there we the and are here would is about pent-up were side we've And bubbling changes think changes and to that the confidence that the On is tons Last be making around engaging some of we’re is this, production. the to Vale only some identify production that Thanks with on, them issues going save. number PNK that Jack, working side, to the production us year

Joc O'Rourke

very that's seems think and of very there been makes, that changes things made, the but with I the making one be that [ph] great changes. I struck clear need that big and like say couple we've was employee engaged they're it a with onboard weeks a of certainly to very those with ago point base, being Ric was

it's I So, very well going think.

Operator

with Wong Andrew Your next Markets. is question from RBC Capital

Andrew Wong

fresh a maybe attention, the and fair Fertilizantes you're regarding bit it cost required say synergies to a investments were also right neglected So, there? have to sounds with these drive and that distribution maybe haven't these bringing business synergies viewpoint are that are these for of your savings synergies and cost is savings, little the like both assets some it had then and

Joc O'Rourke

we that in excellence traditional about $XXX that's just both and and are whole beyond call of buying I as we'll implemented bringing clarified sulfur this to-date real -- we phosphate our savings operational business. are synergies, because those absolutely traditional of what Yes, synergies. see what admin probably are just lower Above approximately of power, think in to those that disciplines and see a we those two, not would million I that last what I quarter and of as we and because at a call that price see $XXX and and million new a for potash our businesses -- combining the we our operational so would cost level we've

Operator

Your open. Piken Michael next Michael with from line is Cleveland Research. question is your

Michael Piken

talk little about prices business higher, standing [MAP] margins Hello, little bit and volumes? your specifically MicroEssentials and there, are with a you the how can are the your going a what

Joc O'Rourke

I of perform on slightly well, very the am but want margins few the say would four the it that well, continues are MAP again but MicroEssentials I one but go prices that them, will give you that. I different hand pretty Corrine say depending the though margins Corrine we follow on going do continues MicroEssentials form, to much to maybe a words? up, product, you our business about because to depending MicroEssentials have to caveat to

Corrine Ricard

we good these are relative while the of product, into have season, increasing we overall margins I MAP impact a of so they but there're MAP, and because prices, the think differentials quarter no point to have price depending we an the season is, in products is we've the multiple market? for mix nutrients relative slightly optimistic prices as outlook that up differential get MicroEssentials in they make have average of what seen the that different slightly change increased can line have peak different analysis market different as the that seeing any pricing products on and on the and throughout spring of it given to overall

Operator

from is Jonas Bernstein. with Your next question Oxgaard

Jonas Oxgaard

forma here I'm the million the if misreading get to margin in had XXX your for to think pro the combined context business. I'm of not standalone pro should about trying last contributions four from I read out into the quarters you how and of inflation the [ph] I forma Fertilizantes But to and how the XXX just the distribution at about I'm the about I'm figure margin distribution of Fertilizantes inclusion from gross entity or million business looking sure in the business? if gross the

Joc O'Rourke

a perspective and you bit run little down talk that to hand what I'm Tony and about on give from going not Brausen have means of us? the a to to Tony SG&A presented to we've here to basis do depreciation. for want and that what and what of

Tony Brausen

at them for to standpoint a adjustments a asset those fixed IFRS expecting fact the your Mosaic include adjusted them in for assets expected accounting U.S. at maybe depreciate fair-value alignment most skewing accounting for number our and useful we have we've to GAAP, for the assessment the pro record forma to adjusted of and the on price a There record we've that Fertilizantes are from to information have policy our we purchase that remaining are and that we we so importantly adjusted have life. those based values and

other, that reported segment Brazilian Fertilizantes and information what from yet and because good finalized. of level removed Fertilizantes Fertilizantes. been in phosphate that's a new it another and from international fully is earnings margin segments consolidated reported allocation statement the see big now SG&A depreciation, and that segment probably has so Mosaic pro sales with margin incorporate with adjustments the is the it relates was segment. was combined So, business factor Mosaic at investments along cost we've in along the corporate now see now distribution made so business information and Mayo segment distribution we're is And reported in that just you'll to with in We've now sold information segment and the change one SG&A very you to gross the just a that from phosphate at income to businesses in the pro done the equity as also phosphate in and portion not our lastly, business line this captured big on forma as this impacts another is is is forma previously segment so point an it allocating also including then the that we're India the and high then in what in preliminary in time equity Miski China that the to was a our so has previously so the that's

Joc O'Rourke

just to of bit certainly little is way the capture, we our time there that our probably of we reach so long value talked business of the and about. and and confident million emphasize. we still term not the that but what we accomplishing own 'XX, up summarizing know the improve will what as be of the going expect underperformance going efforts it, most are and movement in to moving to easiest on the through we're to This that numbers of put business just that's over improve so will you in prices 'XX to really we're XXX the very that disclosure a did but business and improve let get bit we going So it's me more I follow is a fair can take this pieces metrics

Tony Brausen

one other that's Joc as which and in exchange I'll significant factor see well for on a results the that the of rate Brazilian to going reais just have segment and the is add influence a that's you meaningful factor as for share can the about every that's impact, as in provided so Brazilian movement in this X.X the call, with well. a $X.XX materials per reais,

Operator

is Roberts Your next UBS. with from question John

John Roberts

growth when the the week maybe So, than much could imply discuss guidance seems Fertilizante lost think, that to the quarter for to in the the I segment first year for segment? Mosaic even January higher the for new you in seasonality adjust the for you volume volumes

Joc O'Rourke

to obviously your couple in did am is point we first this but so first a little quarter volume, a relevant at about also less bit is of going I close observation actual hand the to start be seconds not quarter, a the full let traditionally certainly Rick there'll the that's quarter going but quarter Brazil, pretty on a your very which is of Rick but the in the seasonality quarter talk so quiet correct. I'm first in to more

Richard Mack

that's we'll our QX, Joc corn quarter. but impacted there It quarters and past. the third quarter plant to up for of QX the And on harvested is -- than we that look last earliest during and be QX John, had first some been soybeans, impacting had tonnes sold grow deliveries, distribution quarter one market, the on the to right it's and a about ready as biggest item to little quarter, perspective that's the in delivery We in their of in so getting we in really the this smaller seasonally a it XXX,XXX this good what product is I farmers making said year slow coming year side, traditionally because were volumes at we is anticipated has that feel back and from will year. in they that based see with us the come the

Operator

from America. question next Byrne Your with Steve of Bank is

Steve Byrne

you're to So, business the kind lower $XX between the roughly that kind there? is split the that the Mosaic distribution you've XX you're you're segment, margins long do million production, would this your that $XX in -- tonne it see a is legacy portion legacy of margin which out you forecasting potash range can it that reach what and that phosphate Fertilizantes of your think is tonne forecasting range -- Fertilizante in of operations take volume legacy businesses phosphate tonne the how and get you and versus could for the it do that for you

Joc O'Rourke

our first as X would tonnes Let the million margin distribution. be what about call that pieces, the what out will what -- lowest which traditionally the and mentioned then we're from existing be the I have to three expecting X of Rick legacy going the all will me is Fertilizante we've there your answer you're level in margin basically fairly distribution commodity high business, million you business about tonnes in earlier shift would be call bulk of

and terms good even the pretty Our up in rest made the or this a business the commodities. product point then BXB our with pretty premium margin the margins will BXB get followed margin be in distribution bottom think Fertilizantes then good that. BXB I pretty and will that be by margin is reasonable of of bulk And micro at in The we be will aspect business. the have central will highest

there adds forma shows I of that’s split that of really the the think to was the works and kind how and clearly. up quite in put So it it pro as it split

Operator

Don is with question next from Your Carson Susquehanna.

Donald Carson

see pounds in on as inventory Thank steal the to channel demand given kind and think million. of savings your outlook that forward your accumulation were that that a your through market average you building then ship outlook, potash in your that XXXX. you. and we that actually demand? Where the the market could Joc in on can saw XXXX. these appose in calendar said past strong $XXX ground you’ve how on confidence Question follow do EBITDA cost excluding And pickup in What you up up were big phosphate you gives cycle from follow a XXXX Vale, for we just

Joc O'Rourke

the for question. you thank Don, Okay.

EBITDA are that, for first look from and by prices if the the in we Vale as forma you aware, Let think pro finished quarter pretty contribution low well I me the three think was start because at aren’t performance. fourth low quarters saying, Fertilizantes, but of the I the

of look if the as we forma own comes actually distribution contribution from XXXX pro most So, in them combine our we business. the at

we in but piece your inventory big seen you me buildup situation and The your not second, the I to on we see is around a a going I’m a question, the handover believe high which potash, to let of world, going a the Mike answer is second give question this actually have ground, where level of inventory. Mike?

Michael Rahm

Joc. we’ve recently And statistics Don. increase, of good our most we ground thanks geographies. significantly XXXX. in pretty has the on, XXXX result on Yeah, in morning a shipment Yeah, MLP think tons global taken where million a estimate That’s up XX nearly as X% that released of of shipments at

situation number been a very pipeline the season, jump XX, good from of NPK stocks price showing the had does I look were announcement. big one in at a we we inventories and India response think very X.X plants. know on had low, America If production, following is Rhea inventory NPK production increase China winter very it’s same to drawdown they’re that on The in they’re out, North December fill strong the potash we fall our with [ph] holding statistics down Brazil, you X%, in a at to that relative increase that in the thing months' worth $XX in

but And again. increase metric we pretty are forward, XXXX that tonne million X.X shape. the demand channel some inventories increase shipments we about or pull for that think forecasting good will in we are think about generally I in around X.X% there world So,

Operator

next is Adam Your Sachs. Goldman from with question Samuelson

Adam Samuelson

businesses, guidance a was Ah end of calibration us and provide you've bend range high earnings know X-X.XX the at would the you. to the to on in and kind on of assumptions given range volume bit one color the kind underlying of lead end some helpful, end, a potash, you share kind of of for phosphate assumptions would that that margin but yes, Fertilizantes or high I kind the the thanks and the of other good could I XXXX morning more that hoping the everyone. low be very end thank per little the low pricing any

Joc O'Rourke

Adam. Thanks

that want most over hand Tony I he of Tony, me just guidance. you to to that handle goes probably into what has the Let on do best take think that?

Tony Brausen

good Adam morning. bet. You

recall past not are planning or do guidance by just may been the said to as in we and to sales is give year gone didn't bit having shift to discussion the either. margin the that -- volume give full the full with give to that addition are in assumptions into We providing What in we level attempting year to the pricing a and you at the guidance. long-term guidance strategic have but keep the that the you me more focus the strategic little of that detail let guidance

Vale that's to So, million. the shares of starting with now so issued about the be used the it acquisition diluted with Fertilizantes share count now than it's because higher XXX

be conversation year, tied you'd expecting issued Vale debt last acquisition. be seen low course we tax expense the late of year we're in to You've the expect Fertilizantes for XXs morning over of because Interest the the XXXX. up year this that to effect the in to rate that

to but So, $XXX level. a we interest up million expense expect be that under still

any expense operating that other the we're and other The in see of number, you are that notable items is exclusive a report calling what $X.XX we to operating items. often $X.XX the expense notable

in So, the in no would other be guidance information operating you'd million be with as model typically that you and gives and perspective. you so course about looking for to some gross your at well of all from so ton that probably range. to about of we've see X.XX be hopefully with unusual information range able the range you'd of you'll you're the We've think of $XX items I your that expect assess SG&A to expense guidance know given margins what given line of X.XX the that and

Operator

is next Jeff from Your JPMorgan. question Zekauskas with

Jeff Zekauskas

Thanks much. very

you As have would up it wrote far if the and to magnitude of don't in to and XXXX you XXXX that as down what if it write plan your plant city down in up the phosphate it you back do at write-down. you or production, be bring bring all later do

Joc O'Rourke

Okay, thanks Jeff.

we plant say basis line. it me Let we new that coming of let's shut we or assess idled city impact production would down the city sorry say on the plant on softening on the blow had

since know $XX part our here. we of about attributable have margin to per plant You is stripping increased idled of ton. directly seen markets believe this margins we stripping own of I actions the

these see rates overtime. cost And by improved cost so, our plants on lower focusing expect conversion we to particularly attire can a we run very if

say or market plant would bring focus to is impact production. we be did customers have believe it say that city next plant the want market to without will really a there our the and in we that do need eight able really expected, to able on to to we is back be of I us the satisfy what that and So, re-assess months meet will cost needs that the the we lower six

So, to DD&A for because plant. a for with going probably overall feel that Tony that over I'm has hand Tony it the to

Tony Brausen

certainly that. don’t fully there were reported an to would XX the a and memory if non-cash as have I and we be I DD&A would committed in write-off the operation is was it any tell notable and permanently value also asset if have yes to be that would that's perhaps million we think decision the can important would of if that million I close, somewhere were don’t be well in permanent XX but to a to I as there recall closure I you item. asked As neighborhoods you that Jeff memory you about But net asset committed fully write-off range,

Joc O'Rourke

and the Well, let closure need the site to need closure would cost AR paid that is to me expensed actual was be point. highlight the so costs, of that there would be though cash at be

Operator

Your question of Juvekar next P.J. from is Citi. with

P.J. Juvekar

China map] the XXXX. XXXX So, down in year which China at see did What's down expected last and that was year shut XXXX? [dap] exposure then could your we had you outlook shut this could materialize in not any XXXX? situation And downs least in in for change [debt chance

Joc O'Rourke

gasification to higher risk opportunity of year higher and me start are if by maybe prices But little Mike took which are is obviously and stage. the are some talked environmental of relevant raw that so factors of think compliance definitely again higher. about to saying that restrictions of they like year this and factors China's the I'm different. going because bit. I some to about may some a that's environmental I for let we changes the there last ammonia driving actions Corrine real mostly They this coal cost use hand real plants and think on longer driven pricing are in here cost talk are ammonia fired running the China coal, occur or at is But be is plants. higher by the higher into There materials or this cost

I that are because shutdowns pollution real all are environmental stock real these idea for of have case, assumptions is basically we're flat so say the those what occurring will to Chinese to market domestic of Corrine? not our But are that issues base substantial is our then exports business is surety so We this predicting the export, factors going piling the changes, for all and what if spring now issues. today And last Chinese are a include affect in becoming change do in that upside one year is line that China.

Corrine Ricard

Joc, track I January year last export about QX see additional were know only the a half start exports. good of is reduction in recap add they on would that those today, that's we're think what to look but thing that the number for small some seeing are in of we to January, the I that January numbers is a Yes, we what

Tony Brausen

about tonnes, China and reduction market those out of X.X mark, to I those million Corrine know incremental and tonne, million market, that it such the hub a Ma'aden year, year in going so in expect jumped that I called is back up, know be and which admit million that custom tonnes produced this ramp at we joint comment, XXXX, and coming gun the look if there're balanced, as the global taking points we bit real in million basically produces tonnes implies year mentioned the go to the would fuel place and tightens it And context the to as at is it drop year were its at XX.X takes of tonnes on X in we bottom there, year, will early X last Al-Shamal a think supply statistics the that we somewhere the changes with venture that's and million the that last XXX,XXX increase from a further. of but X.X with has is China in last exports about from to third very that's a of will this basically market that it whole last line China supply, the happens, about incremental you the statistics. put production has filled has some is early, that and tonnes, which look there'll tonnes XXXX, tonnes closure million demand if that balance. been that just terms guess there's that equation, assume S&D out think the good you've in that happens do from to likelihood fourth year and or announced think the there's X.X just OCP somewhere I we bit what hub, of In the on tonnes ramping is -- exports exports be if X.X customs actually what's City delayed, fire, we up million the the you to P.J. X.X in Plant million little phosphate look respect according we X.X I you million about of I if two And that needed that call another anything on coming the as sources, simply market increased last were when actually would tonnes in

Operator

Credit from with is Christopher question next Your Suisse. Parkinson

Christopher Parkinson

you the just have in rock -- key how resulted Your the drivers drive you Mayo? can and this with quick on production longer-term also hesitation Miski 'XX cost, in trend will on raw thoughts comment your any and trimming thoughts on consolidate, and actually what reduction in tonne per

Joc O'Rourke

the I just re-ask you Chris. that? question I didn't on Mayo, Sorry, Miski Could your catch piece missed quite

Christopher Parkinson

that's end rock the on was longer-term The at of any question all? just thoughts Mayo, Miski simply [indiscernible]

Joc O'Rourke

our Yes, rock as that the those our we to a, in increase at and look the and good and yes, expect long are is term again and we think I so continue actions costs low-cost drive to -- we to that look really the mining. operations had continue fourth all efficiency pretty quarter the team cost drive doing volumes phosphate in

So, words think In a of what our year first this we coming year, that's now can I city, rock profile certainly Mayo of completely and of have up. acquisition. idling Miski with pretty other at in expect strategy to planned from the look tons the a intend so Vale the indication holistically, half we the good the of rock being in very the we Fertilizantes addition different with

is us leads figure and what We do goal Miski look your have we second at develop at be to with able joint with to Mayo. by that a out an and we've our the option consolidated I we how rock doing into so will and to what's that intend ourselves stage going is think and now that really drive X% this that Mayo particularly there. cost opportunity going to to Miski really [Indiscernible] really and out to we venture rethink hard what of efficiencies relook into we're question take At a optimize happen that that for best can really

of terms time. to Miski will from that increasing production over Mayo In be have assessed

Operator

Ben The next is from question with Isaacson Scotiabank.

Unidentified Analyst

forma do thinking the guidance to expect meet like weren’t [Indiscernible]? in you those Brazilian maybe have if would and the forward What [Indiscernible] how you then are EPS your pro looked you about mine going

Joc O'Rourke

year and I'm be where is further but Vale take accretion in to would I've I'm we through accretive and First with year or this I accretive fairly we an the that exact see probably gotten to the of hard think that think on not and we on of to XX this Vale question the to the much that it's your rehash be range pretty made close improvements actually to we but extra dilution it's neutral we saw going questions, with details but and in and I going on will what be track number going year look shares. yes slightly them million be all this will are give

that I question I getting missed your making second correct. just there. Sorry question was have I sure

efficiently Potash so Potash market issue local depends a our the Your appears a chance it question well to if be now competitive it has some and deliver with on would a say local really local very how a can Brazil and on has mine it Brazil to improvements very that quite in at that it I stage be mine this a good contributor. good so could market

depend customers adding the ramp-up will we continue at so and assets continuously on going customers else doing believe or will the for cost in possible other other to of they way each serve look best your that that how volume of efficient are terms do are In depend that's it's we going requirements most to question our KX at as of our but we kind your on of real to now and we and they from the we pricing look we everything optimization continue terms we can assure say you should value our that. we and

Operator

is question the next line Stephens Inc. Our Mark of from with Connelly

Unidentified Analyst

years. the Investor are the measured push more Day could that be is more it to than Difficulty] couple doing tonnes? you work next your actually ramp [Technical there was your if are presented ramp At makes or goal there or we're you other the us curious other that over of I reasons

Joc O'Rourke

do but we're hole more X we it will and basically challenge have what development to the first as tell of we new mine, raw is have -- done, little whether that as to out meter in get me new the mine, from so that out or out to doing the tonnes, bringing months at we our to KX build you and a obviously in years, but happen ramp foot and focus if brine let you bit now of which developing develop not get market fast this tonnes about on whether what XX why fast certainly did depending of first or can, as can on market. we is are then miners up the tradeoff to takes at stage dropping market a develop the Look to underground, we're bottom on not February this starting more rate we being inflow that, coming the to on depends that will really you in of you we focus though we which the ongoing all amounts are KX costs a the we

Operator

Your is response Andrews with Morgan line from your is final Vincent open. And is there Vincent. question no Vincent Stanley. from

Joc O'Rourke

about expect Okay Brazil continue complete, shareholder on and have highly we just we hard of summary, let a with only we about acquisition we're that value momentum, record to important let continue across this where business the but improving focused me outlined. a talked the but deliver we the not we with strategic the XXXX quarter conditions made, cycle; going, achieving into this close by driven targets quick successful XXXX, and momentum And transformation on year. market it's really into now the strong significant as finished strategic decisions to strong operating to to year real off and actions by this was me not we're savings expand with with finally, our so in performance, we from business and be optimistic the summarize head

that is your attention. really as company excited hope to Thank for about six you with and are months very So, we the much XX this in where well. next you we're going

Operator

conference today's concludes This call.

You disconnect. may now

The Mosaic Company (MOS) 20 Feb 182017 Q4 Earnings call transcript