MOS - Earnings call transcript Q3 2021

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Operator

Good morning ladies and gentlemen, and welcome to the Mosaic Company's Third Quarter 2021 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. After the Company completes their prepared remarks, the lines will be open to take your questions.

Your host for today's call is Paul Massoud, Vice President, Investor Relations of the Mosaic Company. Mr. begin. may you Massoud,

Paul Massoud

as welcome and will Third questions. available O'Rourke, be Officer, Global and will fireside Chief And Freeland, Marketing, Q&A. call. Vice Strategic Wang, Senior President XXXX answer Vice Opening to Executive President chat, a by comments provided Financial followed be as to you. your open Quarter Glenn Officer, our Chief earnings and well Jenny Thank also by of Joc President

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

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

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

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

Joc O'rourke

Mosaic made financial as for well in we its with than Good on our conclude chance a hope received our you've night, highest quarter, a we'll News last to quarter in and morning. had additional available excellent Thank EBITDA joining with as context will earnings we performance Release you more data, before a session. and Q&A level website and provide to respond third reaching questions commentary review the third some decade. the our discussion. live then were delivered which slides, I yesterday. our I performance posted

expect half the strong the America Our business we'd discussing we've through continue the order and Production momentum the recovering, a from With year, second to the benefit North markets XXXX. into book, end of of XXXX. since strong been continues to our and

strong an want our quarter. into during the get you the outlook, we production briefly give to on I Before issues we third faced update

As KX operations of inflow. six and and experienced the Esterhazy loss we [Indiscernible] decision mines up approximately help accelerated And ramp June, stop expedited mitigate KX schedule. further made Colonsay. months of you'll remember, KX to production, To in our potash restarted the ahead we

targeted October. shaft efforts our rates tons, XXXX. to quarter third were end team full at reach be by second first team, Hurricane our operating of of which In the from is Thanks the New been the and our production Colonsay, for a outside the normal in has quarter. and to to quarter potash, has diligently temporary. XXX,XXX In any resulting the the The control reduced KX And the operational, shortfalls issues us the shortfall of loss now phosphates, damage of ensure XXX,XXX-ton resulted year. and worked in production Wales, the phosphates fourth should paves in run both in rate failure hit our from at production way we to at equipment Ida,

driven to and rising into head biofuel remain and agricultural As stocks elevated, limited are soybean year Grain of into market. demand. Shifting demand current advantage XXXX. and the global Chinese we end surging part demand is we in to now well-positioned XXXX, into take the by markets, We the continue and global well strength corn of to extending see

reflecting higher. significant XXXX. the pushing be above in and And demand income farmer the reflected constraints has profitable, shipments North prices remains order book As stronger That been the continues first into half is of In a this are set end In strong crop prices. expected combined and despite result, America, and prices remain drivers economics fertilizer of record the nutrient to in the from high into the Brazil to well surges markets norms. once for the year domestic healthy market the have strengthened not of benefiting than the North a considerably supply as fertilizer in remain Grower a remain followed, commodity with economics latest suppliers. global expected historic beginning group agricultural first a America, prices industry half Americas, again diverse XXXX. imports of year. from at year. demand although as is favorable quite favorable we the Grower the in key of during

the is as the for moves by However, farmer in subsidies persistently disconnect most has India, well improve supply remains balance, Indian acted availability tight low inventories recently of likely and demand as because domestic capacity the strong, recovery to government while governments importer underpinning of prices. demand imports, and In are pricing. still economics constraints lagging. and which the help Recent XXXX will global between lagged of phosphates, the

return India should prices, which the through in as prices. crop benefiting of In yields source is see strength oil the Asia, we demand are, palm pent-up inventories in China subsidized its is Indian incenting XXXX. maximize depleted a to how to fertilizer Southeast from and market Given demand, farmers

all to growth first of supply phosphates the directive halt In that together, to Commission National fourth half rates for all realized ensure upside continue China's phosphate Development of further and supply. Putting pricing rise. prices to in the expected demand New to operating Reform continues higher exceed new supply quarter exports producers, limited. significantly in expect is decline potash. are we by from XXXX, this potash, phosphates exports and domestic and adequate Chinese announced producers in major and the reflecting from

book now committed and about XX% priced. Our fourth-quarter is order

we potash prices, expect $XX realized to and ton ton sequential to to a in of $XX a result, in see a phosphate prices. a increase As $XXX $XXX realized

quarter We well. as commitments are seeing first buyer for appetite

All of fourth strong XXXX. a higher implies the continuing in into this and very result quarter, earnings

dividend towards million to $X.XX in several make commitments announcement, our free target additional In an an we target target increase progress approved flow of August, regular Our we've in leading In billion significant effective allowed repaid debt repurchase toward earnings we year, are XX% $XXX share. cash this to XXXX. has our XX% we us made. shares. board of by of reduction. $X expanded which Earlier dividend a to announced Since billion. we substantial raised have repurchased debt per our October, regular generation, that share $X.XX August, of $X than program long-term in Also share more XXX,XXX to

returning growth-related. we Capital investments $XXX roughly XXXX, expenditures addition billion capital $X.X Balance strengthening Sheet of to to the expected which further to and in business. shareholders, in total continue In evaluate to the million is are

allows to further opportunity balance the that to We return strengthen our capital the business, sheet, grow continue every us to and evaluate investors.

contributions I to I she of at Now, opening conclude recognize my Mosaic. Laura want to Gagnon, has a moment what and before made the remarks, many take

to Head invaluable the team. As Investor of for and entire been has Relations leadership advisor me, last an to the decade, Laura

her that, for Please and and well. grateful through all the very been the best Paul are her wishing the questions. to retirement. Paul? join stay We end move lead with service, Laura With her of on IR, in let's onto me her has will year wish transition. the in help promoted Massoud to

Paul Massoud

and pricing, we received questions risk nutrient disruption. strong a phosphate affordability continued demand With of on of potash and Joc. number

do and potash? demand of seeing you both about are signs how geographies what in and destruction phosphates potential think you the First, for risks

Joc O'rourke

Thank you.

it lower been has by been consumption destruction. has in China, more where than were in about start been here, strong And the saying me has year, the availability because pricing Let about exports areas of early demand in the high.

next exports expect the in quarter restricted the supply the government to go which we year, for exports and in and has QX allow However, in of the a domestic last into market. will stepped Chinese very low now better and

jurisdiction. but The been farmer or driven to subsidies inability India, In been inability economics. have what's of has the not inability importer secure the terms economically the bring [Indiscernible] really into to product of inadequate importers about that demand,

those However, -up of what that, is based [Indiscernible] do over India year and see next expect we about season. going and to spring affordability on the fertilizer both I'm throw key With China to our in really for details it to to talk into in Jenny the early markets. demand two

Jenny Wang

Thanks, Joc.

over is very In destruction. have XXXX. have demand really think major a favorable covered sold and Even have back XX% demand the markets come rest that will we the from strong in pent-up we China, already. I Brazil, have to crop of of ratio the see demand you and summer feel growers -- X than size very the XXXX, still is less in going demand XXXX. demand in the reduced We the a for We the of not confident, seen previous with India actually years. and be nutrients world, a the

Paul Massoud

of terms soil and with and contrast XXXX in Can levels? you compare affordability, inventory, XXXX

Joc O'rourke

Yes. Thank you.

we do of that likes And have perfect don't But me we soil by fertilizer soil to it Brazil And some have that's replaced have that have year. start of down, per the XX studies inventories mean we in replace soil year. right the view Illinois that into with also with We but last is which every soil, say. University as the what allows decreased. to inventory has every depleted put levels. this the precision the years Let amount be actual you more insight over to the particularly of you have show agriculture may it course, of

be So, demand that there there will is definitely on-ground year. next

of the no as being around large years you low we And almost inventory, fundamentally globe large place seeds. see jurisdiction. only ago, kind where where fertilizers, channel inventories crops had of but like is the of that's any amounts and of it oil terms of of that in In than grains we There different see not inventory. channel build-up was inventory, every

is turnaround this So, quite different.

be we they price that oil affordability plant prices will oil that to and good, will which go either now for for grains grains and go look will forward, less, see affordability which drive will right or up. seed long-term and fertilizer up means we so, as fine expect seed, have because we will And

secure the words, other is prices for in So, high high prices.

Paul Massoud

India are impacting affordability? how Joc, subsidies

Joc O'rourke

a Well, at level, market. it's farmer a controlled

compare has been to are phosphate. farmer. the which And economics that phosphate that for the poor. and demand At level, the isn't to an both the between available know that such importing, the pricing product they're Certainly, strong. that importer means difficult on-farm importer and is potash global and both farm price at level. affordability means GAAP retail Which very we the very goes it's So, potash really for not

Let me will and there act fully that need. going government XXXX, And pent-up to to have we they're subsidies get lot of allow is add, farmers product expect demand to in as increase India. we the into the a to move the

Paul Massoud

from topic recent the given Another change questions, Goldman Vincent Adam quite from Andrews at Morgan China's market, and in Stanley: including Sachs, policy. especially that phosphate few Samuelson, generated a China's export

year? next being and is, part of question expectations in volumes? changes production for what by exports year how China's this is our And that First are this impacted

Joc O'rourke

Well, XX thank on quarter total year fairly we're to XXXX. has taking led seen just first recently, Though now whole over pulled run we've effect. normal. QX stepped exports government restrictions, to After domestically. million to that, you. tons. has expect large lot This the deficit as China's expecting exports to expect that of in, things probably return which a export do We or are don't we But

we're a this million tonnes year, over expecting So, of XX little exports. for

Next that we've were and should X.X year. years. we'll half a this we where from that about previous the had or return back we year, million say, be we Per think down tonnes X.X a year-over-year, to in

agricultural availability market. over fertilizer the the for and find see of production way other a phosphate declining of also time, fertilizers into see of products, a that lithium-ion long-term to lot a acid in means areas. we What That see number starting other That Now, production a China. we of these probably restriction a including its time, means use. decrease phosphate exports over phosphoric into from and that industrial decline is phosphate a we is batteries, of should

Paul Massoud

fourth Parkinson and need on from of in Piken from both much impact we'll Chris about to Cleveland asked the quarter? our how Mizuho, ammonia purchase ammonia Michael phosphate the Research, and business,

Joc O'rourke

Thank gentlemen. you,

everyone just start sourced by X different from me ammonia reminding is Let sources. our

including cost, the at Hub purchases. at XXX,XXX stage, CF obviously we've is maximized cost and of Natural then, year at of this which Henry market tonnes contract, which plant, per the ammonia Faustina our short course, First, Gas.mOur open

approximately at to will come from open looking market probably we're quarter, This XX% XX% purchases.

per $XX what based sulfur our tonne market on is such, about expect $X environment. a a see of ammonia to plus relatively And in materials. changes increase we As that's flat pricing raw to

Paul Massoud

XXXX. about and ask production asking questions volumes how of questions in Andrew of evolve handful a including Seth had assets, ramp We RBC, potash and Wong, will costs Goldstein details how production Morningstar total KX and our on will from and both

Joc O'rourke

you. Thank

by start that the going me ramp-up saying is very Let well. of KX

that system just so now handed have [Indiscernible] We over operational. operations, is the to

now number four operational. quarter. quarter, [Indiscernible] of [Indiscernible], end have we hit as we by So, full we first first both between will the of increase production And the and

we'll that production be mine So full again. means that very that soon running at

of the want up starting to is operation a tonnes is a of month terms expected successful about in at mine. other Now, I per That million very year. - highlight is now we've running piece, our been also so tonnes its XXX,XXX ish, Colonsay rate

two We expect of actually the incremental quarter of next between the we production have them, will by year. more first

Paul Massoud

already from sold, think Bank others, of product sales, about first-half committed? forward how and are How Berenberg, have our from far Byrne pricing as Tamagno as asking Steve of much volumes well and might we America, Adrian ahead our be we how strategy. about

Joc O'rourke

of availability lot seeing is, is regions. were big actually, into, but amounts we're concern inbounds, number of Well, gentlemen. a about saying, a which careful geographies let what And you, and by we're across forward-selling. a being the very me we're our start Thank selling today

So, still while is we're the the being let cautious. Jenny you give going to details demand that. on I'm there,

Jenny Wang

Brazil. strong a strength seen QX the we and all America a from good that. we started especially North market. well. amount modest of to into and the sell Joc, continuous the tonnes sell some to customers, began demand QX even are as of We of we Sir, for have -- These good about indication And feel tons the in

Paul Massoud

launches. and about for BMO John asking Joel Mosaic of Jackson those are UBS of Roberts

of how the past And strength to quarters, sale over Jibson this? our few distribution is are being by co-products margins or much driven this the production? when is Given contributing

Joc O'rourke

Well, thank you gentlemen.

let say all, integrated of is business. me First Mosaic Fertilizantes an

made with obviously benefit really strength transforming results has the also the is of ourselves it the has tremendous But production we've markets. been progress combined distribution So, business. there. our of that driven Other

through then million $XXX synergies improvement we the million in of found, transformation. all, $XXX recently, EBITDA of just target First our we've and more exceeded

million So, time remember, million the we was $XXX year purchase per a at quarter. in about and $XX the of pro forma did EBITDA just

you So, they contribution. significant drops the we've and terms making And can significant bottom value see a are of straight it's line. in where extracted co-products, to

sales the of a those certainly, from to level I in think, of year co-products. $XX $XX million

Paul Massoud

a We'll of A from Wong number capital from RBC up this of have and analysts, Patel questions. about break including Rick allocation. Exane, into Andrew asked couple

terms sustaining for you capital? expenditures discuss First, can capital expect growth new what or to and major in going investments, forward of

Joc O'rourke

trend over Clint Thank years, hand and am will to you. again, some start end But part expect to I business over do of by a expect giving decrease detail. of we going of to certainly little CapEx KX. at bit then next X it But allocation, for lower. the our do time. in we over the the the Growth CapEx capital as to reinvest

that. will So, there Leave reinvestment end talk with make. about to will capital. be it we some I'm that to And Clint to over going

Clint Freeland

five in we ramping next lower. to the -- trend and recall KX be the think ramping Certainly growth from KX Also Thanks, investment the down the capital would down. years, over particularly investments, down Joc. Florida. standpoint Like will our is I CapEx said, in process extending Joc that be X next over made X the of of years, reserve will to in a expect some

Clint Freeland

for of to going changes, we additional had dams. number to things how been of are looking I make regulatory as of Brazil the of And is operations, a leased. there we've us assets some have our of more instead that to a a around spending. sense core portion assets of looked long also have term assets promote also is leasing. own That's our We some that think require over those probably particularly at down those And at number have in we've or been underlying -- one

program also so, And think CapEx that going But that will I into of taken be of with forward. all part

Clint Freeland

we'll to as to continue the consideration, those business certainly opportunistic go look X we'll expect returning Joc that ones the opportunities would for over next we in are continue invest said, high the down CapEx forward. and come for to see we we today, that years as to investments like look total

Paul Massoud

deploy and repurchases, do As dividend were expect just a incremental debt on to projects how between capital the that policy, this excess share follow-up type of mentioned? topic, the we growth paydown,

Joc O'rourke

balanced on We three pillars. you. key capital Thank allocation remain focused between a approach

a Balance We've our We of demonstrated Sheet. billion over quarter. $XXX to this the First, debt paying time. million continue down that to to of by target down long-term debt intend pay dollars

finally, Florida. to invested, in our and reserve we've of have will $XXX capital spend including business invested, KX, on on growth million terms year, then And extensions investments, spend In the in or our our shareholders. this returning

Here, the million a $X.XX that, time repurchased second repurchases started year billion we've in by for authorization of an over dollars of repurchase our demonstrated Thank a approximately do what I share time. program like dividend XX% to to the to raised target on shares concludes per And in open already the we've very share a that's line we to based That and XXXX. that And we've of We've use approach forward. portion on balanced this now you. a prepared the going open we Q&A. would will event. market. continue

Operator

line first of Our from Instructions] from [Operator John UBS. Roberts comes question the

line open. Your is

John Roberts

that talk your of capital about to bit do you to? you. a you want more have and Thank strategy, dividend return little Joc, get a yield targeted

Joc O'rourke

John. Thanks,

pieces Let is expect. me strategy based saying we start return on by our two capital

be the cycle. a affordable target to regular dividend through expect giving We that is

to a early that we completely things have be may careful the change One if of out too we don't of to market changes. we want is is the dividend that a cyclical put

looking to our we're shares investing methods that, dividend shareholders of for at for are repurchases, we So, us. and to reward share beyond holding with continue looking affordability at their the and like

targeted augmented a expect, percent, is not through did but that? a add anything have cycle, to do necessarily as and share huge well want -- you to through that's by So, repurchases. conservatively affordable Clint, dividend one affordable to that the we

Clint Freeland

No, I think that's right, Jack.

return look looks of by of flexibility forward. the I the supplemented capital share think does total, of as, dividend what that a repurchases we to program return, of level well we shareholders as like affordable the at maintaining fixed as an level form in and in go

Joc O'rourke

to dividend reemphasize programs expect and potential fruition. move John, grows of that that our some -- our earnings our to internal do will though I come we as -- bring

Operator

line of next the Mizuho. comes Our from Parkinson question Chris from

Your line open. is

Christopher Parkinson

Thank you much. so Great.

potash discuss given of just demand markets, future order your current spot and the quickly the you books contract ultimately negotiations? runs, where you were On indicated that for dynamics evolution Canpotex -- how can for sets up just the inventories already

Joc O'rourke

Thanks, Yes. Okay. Chris.

at but we I'm our say, is very let good. demand over of second, going Jenny with first are book. respect in where So order all, a throw this to to to me

for You've us quarter Canpotex us a very I recently on allocation? in negotiations national will, near quarter and for again, contract term, committed, real least probably for but of which well are about negotiations about for buyer and probably fully China, want that need Jenny, the to hasn't position so think up the as strong time not that contract little XXXX. side, bit that. really case. contracts, is it sets really side X, There's heard don't at started, We're And early Canpotex you you the also a of this talk price in a terms that for move we in our lot do committed talk X. with major we XX% if sets up into

Jenny Wang

the are into Joc. quarter Thanks, committed spot fourth and -- latest started to basically America has Canpotex sure. sales the for basically and reflect we going market have prices. XXXX. fully which Canpotex, in for QX Yeah, North both We

versus that's lower inventory year. And year. of the which of benchmark as will same the time book the situation, see the China term than the last XX% be or market So, QX. prices on and today, order India, lower over it In in than the same a contract price, basically case you're in kind likely of you in a last level is the saying market of to reflected in going realized [Indiscernible] That's standpoint. the XX% the is

So, settlement but the mentioned, Like previous view, have We needed the than than for Joc previous we all all low market need this settlement don't from need a this the be earlier was that believe we market, inventory of market years. demand year. to see situation? contract will that we point this will earlier

Operator

Piken question from next line comes the Cleveland Michael from of Research. Our

Your line is open.

Michael Piken

Good morning.

net in wanted perspective, get some in-market to ability that sense of been bit talk able of safrina guess, you a higher Brazil, think get these the be production the rates, challenges from are puts how are to about bringing freight given some going a Just plant takes, months Brazil? and to forward do the and you crop now? from get farmers product I have of little for into couple to There's products to in, and we your logistics and are some moving a Thanks. enough the where the fertilizer the

Joc O'rourke

and the you've I think head hit Michael, nail Thanks, yourself. the on

key benefits We great advantage, of was logistics that have in-country in Brazil. the investing a one of and

not a freight, production, We product of but course, a from much access the we in in-country only freight then, in that gives to the And or port rail and coast. get part-ownership Santos where than save to of us ocean [Indiscernible] the have others. more really ownership truck a opportunity effectively or Brazil, into an port

actually -- have logistics who our this to to working to coast ports. now all who at through So, would come others competitive and would advantage of others restrictions sell compared or public in right are the

has strong. doubled equally. as the overall to affect this economics mentioned the calculation for some look we good there. So, economics fertilizers. we And come on -- position there into there believe I be it our stage, the still with their as ocean be going restrictions for quite so on -- everybody some tight could product And earlier, of freight to least farmers, Brazil. any Particularly, could we Jenny a at in at will forward, restrictions course, of the be getting feel that's we're that are Brazil Brazilian does probably really Belarusians, but guess but Overall,

Operator

Our Goldman from next of Adam line question Samuelson comes the Sachs. from

open. line Your is

Adam Samuelson

you. thank can One it's Joc, X morning, mentions Associations on comments I maybe point parts. Brazil? everyone. Yes, there, telling the the not farmers And some going these have Grower on and affordability impact notable actual Good if of to follow-up Industry at levels. fertilizer And is -- second, consumption material apply distribution price and a view on off-take? to not for you're this And that's on that 'XX. more and your then business on

a You talk slowdown or correct profitability year -- think Is in next demand business some we price how more flat bit, a demand about that about that in did scenario little falling in prices your ever environment? market outlook. if the do and in distribution

Joc O'rourke

the years. with couple Well, had affordability. benefit extremely profitability. me of The let the the currency, devaluation and rise the of in thanks. Okay, Brazilian last -- rise good Brazilian Again, with over prices, farmers commodity start the

is this everything that fertilizer, but gone year. decreased of Now, certainly prices, And up. seed has prices, rising, fuel because not just

than more them are used squeezed it's to. surprisingly, not they so And

problem. sacrifice going our anything, is is not mean by not good their However, farmers of solution to issues. I belief own farm. fact, the to a to just like yield, would not if economic profitability that Matter That exacerbate They're fertilizing.

history continue be bread moderated would great and as be been as to think continue what a and our growth numbers, overall, we we that baskets big of fact, the that will it than the next more be we than growth the expect No. think for or continue year world. been, so? normal. Do it of in one we're be to would but and Brazil being -- We slightly market that that growth ultimately has lower the has expect that will matter looking will So, at strong will longer-term

think strong we very base. In terms business, customer a of distribution I our have

well are market. the respected We in

Our the we'll that market. market, have do want I I brand growth worry to distribution. be now, very stable a customer for down than we situation. in has in which well about products good but of good the specifically, any declining we over I those name They're poll our or there. would able would is so our Plus, They less a we have a as very Even a in margins very that keep time. in MicroEssentials, good better base. others suspect a right expect great

Operator

Our America. of from next Bank Steve line from the Byrne question comes of

open. Steve, is your Your line is line open.

Operator

Our next line Jackson question BMO of the Capital Joel from comes from Markets.

Your open. line is

Joel Jackson

off the for us Maybe doing? either more Joc. market in be I And believe a in last [Indiscernible] the XXXX, morning, Morning. Can Obviously, taking in a few Good give in where terms think years. of in question. capital demand longer-term leader LFP phosphate incremental need sense at is are [Indiscernible], companies big are you production? you phosphorous Hi. could LFP of Do What phosphates are gas there [Indiscernible] upgrade would that Chemicals purified your market? Israeli and, at of like you cost? looking the to you some what it

Joc O'rourke

to the to lithium talk growth battery the going I'm Well, this turn Jenny of to about iron over Joel. phosphate market. Thanks,

about of the Elon in in the [Indiscernible] think aware be Musk building may -- to You China. both Model I X the And in plant talked cars batteries LFP just here that an U.S. -- the using has

that on. coming question no there's is So,

about can are absolutely Jenny research for absolutely we right cost the the us would capital. say you acid, you into market. how doing purified But you the are phos to acid, purified of a we it's create can to I although talk terms and SLP In little tell or early phosphoric either

Jenny Wang

Joc to the around year Sure, tonnes Joc. the trend On China. of saying be this LSP questions by will in that production have will of the as U.S. LFP phosphate phosphate are and of to made into change purified we the phosphate believe The mentioned, change. the be Tesla are we working and chain, XXX,XXX battery shifted been area drivers are related old building up changing already into we to which U.S., asset well. X.X has equals shifting And of in announcements trend of fertilizer [Indiscernible] to profoundly industry tonnes of with Coming -- PXXX structure one [Indiscernible]. in industry. into demand the [Indiscernible] looking some the seen Chinese will the alone, up increasing this million U.S. building other saw XXXX. some LSP, as the And parties I supply of LSP then, the We actually, factories

the Joc major as are from be driver like industry the producers, long-term impact the to especially globe, starting phosphate a and of mentioned, doing around So have we China we terms study. This in phosphate our believe in it is will own going U.S.

Operator

question Berenberg. of comes next from line Adrien from Our the Tamagno

is line Your open.

Adrien Tamagno

morning. questions X [Indiscernible]. Good Hello. got I've

but the KX please can restarted for run we about me Thank production, XXXX, on since the rate recall Colonsay, for And First, think cash expected you cost of you how annually? should target you. XXXX? of

Joc O'rourke

Thanks, Okay. Adrian.

start me Colonsay. with Let

Colonsay per XX to our expect now XX% comments. Overall, our transition. tonnes we've total as the guess $X about to month that been guess, such, maybe through up expect Colonsay XX% I down. tonne We And production. cost, we a make the as I Colonsay point, it's move the would going start or At earlier up now, maybe overall. coming -- to to its going of a in mentioned $X will of cost ramp XXX,XXX Right to I

coming and So, it's [Indiscernible] KX tonnes up, really by be cost will start not costs. changer Esterhazy that'll as offset lower at a in big we they move

costs Colonsay significant of lower because to really market So, of don't in increase overall a of overall, I offset because the the see cost KX.

I handed You over operations. the ramp-up Again, the just of hoisting to XXXX as asked south shaft about we've KX. earlier, mentioned

-- a to of couple which be have, miners end Quarter. the by months production full end First each. by we basically we will up KX on And four at then takes or the of the build, of I so, the believe, three And left

slow KX approximately that we of fully So, and mean move Quarter, production up KX, end the which go be million will a what you'll giving as capacity. Third tons of our now see will a the KX by new full mills utilized at is forward to a us

Operator

Our next question of Bank comes America. from the Byrne Steve from line of

line Your open. is

Stephen Byrne

would mine it to this the or where Sorry be capital throughout the if And something I little you the it Brazil? extending wanted would in the to expand of about earlier. it or bit Would distribution investing assets see productive in in your in growth? or in in invest network to potash production more my returns be a technical being capabilities, -- end problem greatest more drill expand country to country? life new so, do on be on on

Joc O'rourke

we got Well, thanks you. Steve, we're worried back. We were glad you and about

ask I prioritize So, you we coming -- probably highlight. I would our sales a are matched couple as but to how that. close book. we look there's production of with areas capital capabilities to that and are our MicroEssentials there not yet, new where at guess We're we like what would

in we're be so, the until How expanded asking at you where we MicroEssentials? And it will question: North ourselves America? the is right asked. America and it you expansion. MicroEssentials that And is you'd long still do -- and efficient growth in expand but be in or Brazil, So Brazil? it to questions we being now, do won't too North expand it more looking still in expand Do

good there's opportunities lower a you the grow quality go We in We've purchase. opportunity we Another good. as whether it, area couple in opportunity. extending distribution cost, lower at our is of right forward. intensity. growth lower might lower -- of, we're a be And It's capital other -- certainly our product Brazil, it capital, as relatively in production, We increase that organic that not life production that Brazil. I think That the Florida. think, cap and the to we whether see be or of in Brazil. reserves extends then but a now looked mine say would one And the mentioned

at really is, don't just as this we're potash extensions, one at see might not Colonsay. required the MicroEssentials, reserves, stage have being So, been I between I asking, we've started just that expanding looking you're think

they So The high quick those is fairly mention I return, one a one to to but investing are just want be there's real payback. we're up, opportunity technologies. other think looking have areas in I the -- there's

transformation any we to next-gen well, our is work come work, back see the For and I'd because of you really automation and doing of around it's pay some going encourage great. think we're

would summary. automation and products, new be distribution, reserve, the So

Operator

question RBC of next comes Wong the from Our from Markets. Capital line Andrew

is line open. Your

Andrew Wong

sheet on to might years? balance yields? that, Hi, from see in you And fertilizer like if we crop any out want looking to what could does that any of crop into anything fertilizer go thanks reduction about or on that talk do what to question. sort projections rates for And couple taking application Thanks. affordability my do different impacts next and of at back do a I demand. angle, it going the

Joc O'rourke

sure. the quite -- last I'm of Yeah. of piece didn't catch the I want that to piece not just that, you Do Andrew. maybe last about repeat

Andrew Wong

concerned that application could reduction crop understand pricing want to in for what balance going just to yields? would we like because forward? crop your sheet rates and Thanks. today, mean I people if see what crop are that that's And do about a what do projections Yes.

Joc O'rourke

Yeah.

saying Let today, okay. start by me is affordability

But the we're where would XX% I get easily not gets happens -- affordability marginal happen point looking carryout case or have rationing most what on think I same U.S. expect foreign. is, for page a or something. And we where fertilizers. here And all crop see the the land, what for in think particularly planted if could start I in big today people to to there. under question may well, whatever. that at I are

to So, stock-to-use which up month anything And a XX%, a if that's cause or is kind in down going corn, disruption, is. ratio a to whatever supply, of or or of of looking under of at month? the run so, it you're any price soybeans, what,

around prices you the so, doubled. now, more And palm than look world oil right

of Bean $XXX prices like good that. the are prices are them corn low. -- Our in all availability the is or of something and so range sitting

crops. for precarious So, bought it's a

to less fertilizer. But have So, plant that, if may gets moderate. do they can price plant use if would and the seeing more, they're Likewise, even then I people price more expect that spikes. going to you do to start tighter,

don't get huge So, good from see case, affordability in an either perspective. we going to crops. and I Because need downside forward the need fertilizer, the a you yields,

you either in a acres, put be to two use of going -- you've case got to got either you good of In lot we're we pretty to together fertilizer a got should forward. plant or on few has two the say you've happen: things one a shape and So, lot of acres.

Operator

Citi. next line Juvekar question the of from Our PJ comes from

line Citi, open. Your line PJ now from your is is Juvekar open.

Operator

next from Instruction] Isaacson Ben Scotiabank. from question of comes the [Operator Our line

open. is line Your

Ben Isaacson

phosphate very and talked value-added DAP some excitement about morning, good MicroEssentials Joc. quite There's about and haven't much, been or much time. or you, we in your Thank products performance [Indiscernible] so that

come a You lower-quality end-users dig commodity did and mention I that about a Thank believe in can for you you seeing means is how little in you. bit. patents you XXXX. and hoping working was product are and phosphates? talk And little about share Could Brazil? -- downgrade off And about you in on the talk XXXX talk the Are to bit the U.S. what market that you could I Mosaic? development? new

Joc O'rourke

Ben. Thanks, Yeah.

market now, make. of amounting of guess I all to of product right the terms about In as share, XX% MicroEssentials we phosphate

become of piece big it's market. very So, definitely our a overall

in half I think, Brazil, before limitations. limitations In million probably size a in run I terms XX%. a market, still we're to I strong the the -- to we're in I in tons so of we production would we're to going share, Yeah, tons market up be we're probably U.S., run against mentioned up guess, XX%, and And a up cases, guess to it's coming similar million earlier, and both which going Brazil. X about market it at In against as growing year. both up XX% about approaching around it's U.S., probably be a

results. aspects on of to the been benefits, yet extend years what able has In the the XX-plus lot adapt is and but the a it, make certainly that. that a copycats, we're the are same nobody of seeing to terms quality, agronomic same reputation Yes, on has same working of product has to But that has I of good we and patent whatnot. there's ways patent product the there's actual to mean X

it's been to much be us. very market very penetrated very far, continues Nobody really from has successful. successful, So that

very going we're So, forward. positive

In do performance we we've market development, before. terms of our as products, of talked some other continue to about

product find really that successful, to quite in performance to is like markets, can work well. products successful be market. aspire and particularly Brazil to growing markets, seems it's modify opportunities on we're the and some been change in of our quite potash continuing It phosphate, and those Our certain and

Operator

There are further no at this questions time.

to O’rourke Now, closing Joc the for I call turn back over remarks.

Joc O'rourke

Well, I I momentum folks well have of And very let me a And XXXX. saying, a to X that for here at companies, thank listening by I completed just of XXXX, continuing and see morning you very so you strong very participation. end your we've forward, fertilizer much all know as through busy into quarter. look had Mosaic, quarter

good we're bottom-line to tailwinds doing strong business benefit clearly the our long-term work, us, agriculture and fertilizer some providing are work own our pretty but realizing Now, and markets to cost transform we're structure. of the also for our and grow

we We discipline year, well expect to to continue we the will into as throughout. and XXXX, maintain build as momentum cost capital finish I our And and say.

So, with and us please safe a that, thank you day. great, joining have for

Operator

you conference participating. today's for Thank This concludes call.

disconnect. You may now

The Mosaic Company (MOS) 2 Nov 212021 Q3 Earnings call transcript