Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Mosaic Company's First Quarter 2023 Earnings Conference Call. [Operator Instructions].

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

Paul Massoud

to quarter welcome earnings and you, our XXXX first call. Thank Joc will Q&A. and be comments O'Rourke, provided by Opening followed by President Officer; Chief Executive Freeland, be available and answer Financial your President, and Vice to Strategic Wang, Global also Senior Vice Clint Officer; will Marketing, questions. Senior President Jenny Chief

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

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

and data on press Our important measures. information non-GAAP these performance release also contain

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

James O’Rourke

just morning. our Global agriculture delivered for applications are fundamentals million per fertilizer the grain XXXX get The adjusted adjusted quite billion, in remain earnings X context, back it quarter joining of every and to EBITDA share. first To you of growing $X.X Mosaic of revenues of for call. would stock-to-use to $X.XX oilseeds at adequate earnings put major ratios and market attractive. Good around Thank $XXX take weather to perfect X lows. XX-year that world the and in normal years levels. region of

be happening of Niño El fertilization. With is to environment, weather an under shifting low would and by likelihood that exacerbated the patterns

turned will to European negative because under Yields down. in and pressure beginning weather year fertilization production. and Union crop impacts remain applications are fertilizer remain on in the poor of XXXX this if the under see lower We

regions. With oils Southeast story and an because and Lack further seed sunflower yields Asian reduced the Niño the ongoing growing oil impact similar under war The to supply as Ukraine, combination of of in looking substitute. potash, in is threaten a needs alternative in fertilization, seeing will particularly production. palm could fertilization edible key of oil global We're rice. market of El important

these support for foreseeable future. to global factors are of All expected prices the crop

Switching seen to phosphates fertilizer constraints we and globally sustainable than are for levels are more with a markets, year, very We've into million volumes X costs Belarusian through prices by back concern. move potash farmer and, are potash, though Russian saw This pre-sanctioned good ago. we exports affordability a into below sanctions. roughly of Belarus total and expect levels. remain to supply capacity, This China In well be because much is from exports still to exports transportation excess market, rail total bringing the year growers limited port the is that a high, tonnes. remain lesser but extent,

well. continue we addition, In see as also of reduced product Russian indications to

ports, tonne million to Canpotex the terminal. to cost. of the much expects per X Canpotex highlighted chain on by It failure is this the tight but potash is This today's just is conveyor North damage, lost total year is extends Belarus but supply still other assessing under redirect Russia. the market American walkway and clear that is beyond additional a vulnerability at and Portland pressure, recent volume some of albeit

exports. remains shift away from China a to Phosphates, In committed structural

in will environmental a is our markets increase to remain XXXX exports X.X While a customer in industrial consumption even other over markets. fertilizer cap key supply total to as and tonnes. modest restrictions Domestic possible demand, recovery. seeing These shipments China see rising constraints of million it's the demand

American market to adjust prices. season returned Despite the have global wholesale to have well the potash market, growers their Retailers in tonnes. and committing been are North both farmers Mosaic's American prices significant planting though customers phosphates April shipments spring retailers to resistance, a phosphate. shipped of In inventories. is in and America, saw rebound volumes that April, replenishing and are slow still potash for alone. X tonnes Mosaic North and over North to million In taking Combined, underway, their

expect we've is for quarter and is the the This with prepays of ramp softer the In total supportive highest third fertilizer last of seen X the demand, to years. in Brazil, up the for season. we ahead commitments

in X% shipments a XXXX see in will last Brazil to increase year. over fertilizer expect We XX%

inventories was applications, as remain potash a purchases depleted in India, year per potash the to at potash price After of of for April tonne. In $XXX contract signed a straight reduced ground. all are a going

In Indian which suggest pricing. strong In demand the farmers, shortfall Southeast palm farmer edible stabilize contract market addition driving global Globally, good providing strong oils the to with demand. phosphates we're globally, XXXX. economics, helps necessary is potash Asia, the seeing in supply and in to for

Phosphates, is In performance conditions. X any of positioned XXXX, in and material lower from issues than benefit raw margins business other segment's and by well hurricanes, Given the today's landscape, issues, benefited improved. quarter the from materials Volumes believe during production higher this to were costs. our after multiple raw caused our shortages has years stripping also we market quarter

of continue both expect to trends XXXX. these We in

million the of Potash, plant to into has tonnes the $XXX over $XXX at the sales of we North first quarter, million move tonne. volumes especially quarter, began DAP in to last that second the volumes anticipate with week of range in FOB continued the to prices second the and X per In quarter, X.X total In America.

throughout recovering demand the expect We to year. continue

XXXX. and the are should mines of see Esterhazy lower performing in one in world, and at from Belle Our Belle natural gas benefit costs the efficient Plaine most well. Plaine Esterhazy is operations

to operational last At of to from committed We're year. X.X over by rate online well end enough tonnes of tonnes X come Esterhazy, should market expected potash to producing last In the miners run to XX million the meet annual this demand. is total, Esterhazy's the XXXX. million later increase year

the half of we means the what only producing Esterhazy, be We Colonsay which we'll second incremental the don't will believe market it's this we're year. output when think before restart needs, needed. With the from

quarter, we expect quarter In at of reflected first of range with the volumes MOP prices X.X to X million $XXX in tonne. million tonnes destocking. $XXX to the In impact of the sales Brazil, mine the prices results inventory second per total and declining

As is expected February, by inventory. our impacted And us. we of we largely now results said in high-priced to be QX that destocking behind

back ahead, quarter, tonne. priced. XX% Looking committed range already trend towards $XX of tonnes the those a to margins and second distribution In are expect the $XX we to of

we a strong our strategy maintaining balance and long-term I committed that We've to Finally, by investing returning in reiterate sheet, allocation are commitment want our to our $X business shareholders. to reducing capital billion. debt of capital of met

$XXX to refinance million this that matures expect As later year. such, we the

in spending like year modest this facility our returning CapEx acid. distribution at high the spend at of Our phosphoric Riverview unchanged $X.X remains billion expectation on purified and exploration projects focused MicroEssentials $X.X to We're expansion billion. of

cash Beyond be all through shareholders buybacks. excess that, to share dividends will returned free and flow

and we million and million, During dividends. quarter, the million repurchases returned $XXX regular $XXX $XXX which of special in included share

float repurchased last represent months, the good very we've our believe shares Over XX% and of our still value. XX

over share, per and increases today our further business to Our regular is dividend time. positions consider us $X.XX

economics let the by to and tight, to summarize. growers move apply are favorable nutrients. ag Q&A, global we supplies constructive. remains are market The Grain incented oilseed me Before and

America in the in rest the seeing world We follow. are recovery already shipments to expect the North and of

meet potash operations growth. capacity world Phosphate swing has production from efficient and with production mines demand well. Our the the to available performing are recovered, is most benefiting in

significant sheet Q&A capital balance over to Our long is we to and call. invest shareholders to to while continuing the I'd and like strong of the efficiently the With term, in committed portion to sustainable on returning business. the move remain that,

Paul Massoud

published on night. Q&A, we'd as our most we address past in received to questions some move after we of live earnings Before last materials done common we've to the like quarters, we

Joc, received that over was, how we we do markets see the XXXX? ag evolving the of question rest first

James O’Rourke

Thank you.

While starting stock-to-use XX-year the fundamentals and We're agricultural with grains oilseeds. strong. for in the remain markets, there recent been a has low ratio volatility

due crop, offsetting larger-than-expected is has are Now of Asia lower who problems fertilizations. yields that others weather under much in but and suffering to from Argentinian, the made been Europe, Brazil's and

going brings Niño ag risk a we up real to XXXX as El forward, markets. fertilization at year's this under look and the Then

we've seem biofuels, great for to aviation to production always is uncertainty. recent in the term, diesel known commonplace. to have that renewable well feed as increased ag on potential weather sustainable Now from potential oilseeds as past, call see we But seen become Longer production demand continue extreme a growth an including impact fuel. enormous more weather negatively as events do for

prices commodity sum in have also for transition believe the will is towards weeks. a basis ag rational that term to continue recent biofuel medium off cars eased as even To rise We there up, electrification. use in to

fundamentals there for . However, strong is bullishness ag

Paul Massoud

fertilizer ag the over the we markets to see How said what follow-on of question. you impacting do markets a this Joc, year? rest just

James O’Rourke

Well, I'd last where strong XX% were thank North were and at probably April, what North in start be months just by both market like you. very strong of March we're how seeing we about the look to demonstrates year. in year. and this America we America If up from saying could months the those

other carry and Asia So continue Brazil expect in look a then the started, forward will if over I it application and that to will gets there, season I once stronger for regions.

supply Jenny to demand give turn little Now the and detail fertilizer it I'm the of to to a going markets. on over more

Jenny Wang

Joc. Sure,

of available The The continue Let to is from and Chinese is to is for China year, fertilizers out export as ensure phosphate have in X to million control out to China tonnes. products. production export the own to to going to shift continue their phosphate. the on industrial place. this going country will me X country to is farmers million believe going The through affordable We be continue start export be restriction production. government from of fertilizers going between their somewhere industry in

constructive phosphate rebounding believe and this With a we demand, the very supply the margin tight of for environment phosphate. is

Turning corridors have out tonnes despite XX still the significantly opportunity of don't over Belarus Russia Export we out tonnes. is of to million from to X tonnes export over being And by risk. export utilized year, continuously production X had that million This year last under out Belarus, to of million the they believe reduced potash. Belarus. multiple

spring America. On as we side, in the a season strong North mentioned, demand very are Joc seeing

started, where to have volume application still a when and In This are have have indicating going robust fuel the the are America. a incoming we is are seeing the market spring happening reengage price market customers believe demand. demand appreciation happen we started for in in Northern from we're North spring market. we engage summer prepare the Asia, applications We inquiries they the Brazil, And the and in volumes seasons, their the in will is a price ongoing, demand fuel will for what and With for in summer buyers believe full believe get and their we seen and to strong in to strong market respond in season North will our to where bigger and like plants, America season soon. positively. going they demand

Paul Massoud

Thank what next just you, about. The a question follow-on we to is Jenny. talked

Given and on pricing for explain for markets, the you guidance thinking this can fertilizer constructive your Potash? volume, outlook particularly behind the

James O’Rourke

you. a Asia. and markets would would in certainly North guided American Early such of expected price. than than other the in to strong stronger and certainly normal stronger America Thank potash Potash, view this In conservative normal. say occurs, market. If we we market that a to And there and America quarter is is the both upside in and volume North be have will as Brazil history demand followed North export quarter

move, over price We follows. over have once seen volumes again and that

Paul Massoud

on results. rest on our Joc, the year? is Could you performance the see color and quarter evolving Mosaic segment of provide over question the the next more how of you the

James O’Rourke

to distribution quite time the products position is business, you. long. In Thank the lead

the the As such, than lower second we high-priced volumes inventory. when year we ended with half were expected,

margins, but we sold much cycles rest Transitioning expand most more Now remain temporarily be down the between of have of true the normal. or cycle year inventory unchanged. margins to and can expect this cost contract higher

when in and For together. X they to to quarter in second in will X XXXX, of $XX range quarter return the will of quarter were example, market XXXX historic be $XX margins levels, stability fourth as margins below Distribution the is quarter but averaged distribution achieved.

Clint Freeland

the market is cost margins. we're think our Joc, prices this price And moving one use price. see a results than during cost is of prices in are I average discussion means increasing Brazil. that is environment, moving or in note little is either slower expanding that down, thing you'll up would that average that the inventory result, as cost -- important for inventory other that recognizing a as sales what that I we in accounting that of And

During price environment, margins. declining declining you'll see

will that over why of as of prices margins volatility the quarter-to-quarter, see that's we've are results. level the But market in can year, about. talked you we moving, in course the But target see range a

Paul Massoud

Thank on portion you, move let's to Joc, Clint the and call. Jenny. of Operator, the live

Operator

[Operator Instructions].

first Our question Parkinson Christopher from from Mizuho. comes

Christopher Parkinson

real the about margins across phosphate us as affect Florida incredibly be should helpful? insights mix? that your last quick processing how any ammonia Could trending throughout update sulfur of is on would margins how be you to year just we just thinking a Just the rock give your phosphate year strip cost, where relative well as balance on should

James O’Rourke

have for before, seen margins while. prices Chris, of the projecting, have in And a look the about a of that of at takes you guess, tonne the to the X.X it rest stripping tonne we're year, material I've of will ammonia. of if X.X declined sulfur, sulfur of last obviously, make raw I DAP we how I talked basically the a tonne think and

those -- though that allowed phosphates even relatively have So actual margins been have in has time, quite the stayed of down material, price throughout come have which constant period. moves, the

grade And cost year. -- of due a rock at the little of more constant we we've we staying our due volume higher been of If anything lower the because the of driven to rock quarter area inputs, and costs look margins a through our to actual basically both were through. see the the throughout quarter, conversion, than our those this rest relatively mining probably well,

And costs then impacted chemicals. at if fixed conversion have costs, such electricity and we look and been those higher process by as variable

volumes For we've we both move capital that invested costs as we the forward. improve our in balance of and should XXXX, really assets believe maintenance and

Operator

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

Stephen Byrne

levels for sounds be tonne to opposed prices. would more it forecast a potash supply hundred is going for dollars in than your in that quarter and like of looks to price Your the comments a is like Jenny's historical as is FOB potash second XXXX curtailed that historical the couple higher $XX roughly it's yet suggest DAP one more than

second-tier Is coming my is is, what a lead different pricing reflection it and K potash of So that generally out question P between fundamentally would here be of weaker? to price Russia?

James O’Rourke

me of Yes, there. Steve. Okay. let couple Thanks, go through a points

weeks quarter I what were you're this, whatever or earlier for hadn't couple come April. early in seeing or doing which in the said in still we our questions -- see April think May fully the holds, the when prepared talking questions impact I would expected. March is of we that we and and setting We're than and we up ago, a seen of sorry, preparation what better the

volume So even guidance and least a confident that. pretty that probably from perspective, realistic very that, we we're see is on upside could at

watch market. what's all pricing, to going terms of In it's combination of about

it's standard-grade are, lower is where then to much is a For of a, But good the some pricing a markets product which the North and both how the good instance, selling from America, coming prices transport. and -- higher. strong lower product a transport relatively mix, the foreign and is whether market secondly, we're

then really yet. hasn't And started Brazil, which

does into move get as is spring the spring a come do replace North the the Or end the down Brazil more American priced to cost into American or other and So going of move to the balance -- and wind or North question our product? higher we higher American exports? North we -- the in on quarter, be,

little prices. We're Africa. I I makes But is the is make real in that good North you to come definite Asia. And case, going forecast it We're seeing see the we're tightness hard it seeing strong with valid. impacts probably the potash market. it strongest of it comment those to up which think more just for a In There than a Europe. through in think it in

they view our start and and price the buying will is up step have soon So follow. to

Operator

question Our Ben from from comes next Theurer Barclays.

Benjamin Theurer

term. just versus like follow-up on development term long and good a short Actually, price the

the the but comments challenges you think all and still you reiterated, potash, coming you that made not much. if just the obviously, prices tightness, about around are So up structure

understand So you soft, that but capacity at a increases year. the then us some towards do context same being little maybe help the of the in back prices bit of consider time, half

So just to behind understand additionally, to volume put are? prices given a little the bit where the you rationale plan in

James O’Rourke

sure. Yes,

potash, through story. So same it's if again, I'm going the

didn't Brazil turn to that But market. we're should America. see we -- quarter, see a to to although starts over will. North softer going European at quickly, strong third we moving. start start The America, strong we're basically and didn't going you if We very don't the a to market sell the of see season First, Latin it,

product So moving towards be quarter. the this they to end have of

June, So in place time. say, have to things moving it's in let's start to get product

Now think Price overshoot we're we're overshoot downwards now. was coming usage year. understood the one pretty high, into thing And some that has year. down. be there I an went is way went last right I seeing severe think to And

so it's to. fundamentals. long it following not And term, But has

So America of will Brazil start the and rest moving. Latin

while product to buy a America. is potash. are going they're getting to season still more from China Russia Belarus across to similar have And very rail, from North and they

of So starts that all stuff moving.

their oil. staples to the Asia like Indonesia, Malaysia needs has to need move. They rice grow. palm

short-term, those market. still the of term. drives -- fundamentals moving. drive short-term start constrained And all it's We the think a So longer sentiment

just it's driven. sentiment now, right think we So

Operator

Wong next comes from Markets. Andrew from The question RBC Capital

Andrew Wong

kind of out me. for tonnes phosphate -- coming your of quarter get to X are production per expectations back million we Can million, rate? historically, X.X seen questions saw DAP question guidance. for of for couple What prices just like a Phosphate that to kind U.S. run segment of QX? Just a price what of the NOLA we've guidance QX low drop segment. does we into Yesterday, on the then XXXs. How down that kind factor the pricing on And

James O’Rourke

Jenny let talk little run a me bit rate. let I'll whatnot. fill But about start by and summer the

realistically, a since per year has to we lot think, tonnes rate been probably Plant our down closer I operation. X.X million run the shut City

end. probably is at the X.X So top

would go I think well. average but X.X, quarter X probably running is for as run to us range in everything now an we we if probably will a forward that good expect

down Hurricane issues. had We've remarks, had -- caused in some we I problems. bit, mentioned us prepared real my as a weather-related shut Ian fair have for

that better run X.X to that, number rate say, say, all possibilities. is think let's of things sort than, with at of, and a we the X X.X So looking settled

Let me -- to get bit. Jenny a talk talk little

I is summer about think phosphate. what you're pricing fill talking on

Jenny me that. to get talk let So about

Jenny Wang

Sure. play as We reported, believe as well. trade DAP the import lower of that incoming price. traders about some that you index numbers Andrew, setting. publications driven on the vessels the may the was the the noticed prices I talked barge NOLA And by be

that's So the many the learned, does real what times past. not we happened that in value. represent market and It necessarily

we price is setting, we As the fundamentals spring It supported for earlier. season, fill. it as see real usually is value happened will for be we but see said like eventually the normal Having we summer going to to that, the market very price year, we index through every discussed see will be go a -- America, reset. reflected this might in by after North

ourselves, environment. a margin it very remind Lastly, is market, we to constructive say when phosphate we want

to phosphate As well. as the the coming are pull prices prices material raw some through there down,

James O’Rourke

for to in And just isn't of most I'm -- going through coming product NOLA certainly ever that the not forget never issues. time in ending convinced there spring. get don't logistics

demand. in about flooding actually So as was. down summer has or not Mississippi for you fill, while that's it the about a been Upper shut the is spring know, meant And

Operator

Joel question BMO next Jackson from comes Capital Our from Markets.

Joel Jackson

I of of November a history, of all you you're kind back the XXXX gave presentations of when going segments did bit presenting went your to forward. look I some and the in of

talked Fertilizantes of earnings different maybe transformations, can where about transformation million to So whatever. Fertilizantes transformation X.X, look to X.X, $XXX you synergies, by the to at And you add the million $XXX Brazil one. a

tonne you're and the giving base the off that's $XX margins was achieving, achieving now that and a were already, in to -- XXXX $XX you XXXX, state. you're guidance steady a Now

and my now all tonne guess I those these initiatives? So all where question in 'XX margin, you to you're opportunities $XX guiding what's to is, 'XX achieved margins the same before launched a to you happened

James O’Rourke

Let -- me start thanks, Joel.

there. about by to it's to important that the of that think start overall. saying is referring margin kind Let we're distribution that me And the in of terms

sold of last If you about at tonnes think tonnes it it year, X.X was was think on distribution we X million -- I approximately $XX tonnes? I distribution, tonnes think, in distribution of million So average. --

think you the of about if that, that's $XXX So billion. contributing million $X

a of about what small overall. probably I'm adding how from of distribution make to pretty We estimate like. and is the year TSP business, and the to and know piece majority hard itself confusion But our co-product make I a feed, million looks it And the production $XXX sales, MAP Brazil business selling of the is we SSP. actual our

is moving So those that right that season. market are now, -- are in an We're off really slowly. the pretty and ones

we're what by if impact more a is margin will. so usual distribution And than that on you business, seeing

I think said is what inconsistent with anything XXXX. in So don't we

Operator

from comes Richard question next from Wells Garchitorena Fargo. Our

Richard Garchitorena

The for picking it of if lower-priced why the up reflecting seeing to Any for reason percent and in well lower-cost as in in you're wanted sales. a is range more guidance touch higher that on export April the demand terms second of Just pricing May? quarter. sales in

James O’Rourke

you to Thank take Yes. Richard. Do you, that, Jenny? want

Jenny Wang

Yes.

for I And and is Joc -- second North America remind potash different to export of a for destinations. it's just want of are think grades for mix market. guidance in markets export The quarter different I different mentioned. a market, it mix the there what the price, between

example, the differences. and freight different of So very India be grade to can -- the than the also price are the to to differences go Brazil price for because

into will going the North price, believe quarter, So guidance. have to different as The Very our second in over of strong of a this market. combination second carried the price, forecast different America impact the market product is grade mix it is quarter. be different we we and

James O’Rourke

Yes.

Let reiterate. me

Steve behavior a Russians And -- first been Belarusians? mentioned have quarter, may somebody which in for less the the think Byrne a the in impact. the of part that is have robust this the the we've market, -- they a of and very I aggressive in bigger yes, been in

right having And they So impact. they're a But enough being start the they're now, producing aggressive. bigger markets quite recognize can't moving. market, in really the they impact keep export once to

Operator

The next question from comes Rodriguez Edlain Suisse. Credit from

Edlain Rodriguez

mean, mean, come have I done Joc, mean Mosaic question down industry the or come XX that past really prices I that only Canpotex down the to quickly. XX, get high potash potash In has where this mitigate philosophy. happened months, I could volatility? quick very that to levels a hard. on really there those to have is something have anything peaked and is hard prices or Like before

be nitrogen I better Like does potash natural pricing?" aspect "manage is way with like insight supposed like potash cost the on there Any you but a there? push gas. have mean, there in yes, to I provide same going really commodity, mean, to the what's doesn't different. is a can it is

James O’Rourke

all. quick huge Yes. view to look, down Thanks, perform. at that back saying from and certainly my our perspective, the the I change markets not We wouldn't that like see peak, how is on last year, Edlain. And price you'd the were drop

had had you you Putin in for product, think asking you almost -- Russian -- Bolsonaro Brazil more start for to to to was If got instance, think him Canada President in for invasion the Ukraine, you of back looking potash. more where of and Russia to talking back of the

huge for this as to panic on and sure trying they're potash the phosphates season. have You had make almost enough run they

unaffordable. at was from got least it to point where psychological price perspective, the And the literally, a

holiday. you're markets trying seeing to now So the product. their in potash They're sell you prices high-priced opposite virtually the people some dropping to talked still of where about resistant are market. retailers as some their the on Well, a and

the of -- the are have see now were unfortunately, We we we you downside. that and we've some we I too aware lows balance will it. highs think of on It's the high of overshoot probably And kind a risk through of it were too about And So What low. meetings just could did have now but that out system. 'XX, first -- yes, again it's the like in to get these done risk. differently? phase in even. the talked It

markets did things you to do? well We Do make that. supplied? sure can and of send those slowed But what when no around then, there's try they're you it. down, to course, So more way

So I'm outcome. the done anything could the changed not that have suppliers that convinced would overall have

Now supply. And buy, as out. start this we're year, balancing trying again, will that to people

Operator

Instructions]. [Operator

question UBS. comes from next from Our Joshua Spector

Lucas Beaumont

for This is Lucas Beaumont have Josh. ones. just I two quick

Firstly, so on you second year-on-year. be your the potash volume you're is like sounds it quarter, talking to up America going guide for North think

XX% to applied year-on-year. I what and that's of it's case, then XX% kind the of out what's quarter, that's if split down kind So like Canpotex doing is second implying in the

right? So Why down allocation taking that that less there? it much is guess, would be I

follow from Fertilizantes. wanted And secondly, just to on question on Joe's

maybe us, between now? kind could EBITDA And in Fertilizantes mid-cycle distribution do how you of see production for normalized EBITDA and that EBITDA So please? the split you

James O’Rourke

Yes.

said we have earlier, relatively volume, a I think view conservative of international potash Yes, Lucas. sales. I taken Okay,

be our say of of our this, if end if guidance. the I America end back, lower. mean, higher yes, is be performing I And we'll right comes as the what I exports at And And say we'll market does, the so bit when portion now. guidance. is higher we're North it would the a at international think keeps And looking I of

downside try is probably this this there there's a at probably there's balance, than but we potential At point, risk. keep say can it a -- I All looks stage upside to is little like. more

risk a and can become else again, Although, everything chain supply in this.

much can You product. only so move

second kind again, -- me let of let the and if question, -- highlight Now Brazil, Brazil, you will. so yes me

earnings going can of kind their you as look are to think Brazil of -- I be production a economics. XX% at being

Now you account in that take have fact the right into to the producing market. the

whatnot. So other comes I XX% co-products distribution business, probably Brazil's from the earnings come XX% and and from that. is the from things one of think rest come that like

kind how how portray we of that's we've at and tried that So business. that's to it, look

Operator

next Zekauskas Jeff question comes JPMorgan. from from Our

Jeffrey Zekauskas

signed better questions that? A instead contract India suit a months they after you the contract about as contract do and X But X gets $XX a sign signs of didn't did said, $XX XX that? couple price. think for year Normally, a in this And Chinese tonne signed down have a India Indian you of potash from might X quickly contract? Why sign time do signed tonne. potash. a the a Why do potash. a And an a a of Chinese maybe make at follow down What when you tonne for short-term the contract? you China a expectation XX.

James O’Rourke

Yes.

from think Look, drove we the Jeff. that we the you suppliers, normally don't the are to India. like tell at X XX was is including at potential. price Canpotex, don't still Thanks, come the with me upside months good or be was now Okay. not fundamentals I speak going can X that there's X-month for such pretty It to least that thought I contractor. but Canpotex, It start let and India

a So X-month, not year. that was the reason a that was

finish of let sorry, China the terms In -- -- me India and recognize thing.

haven't is though India established program. because tonnage-wise thing the really hasn't other The they taken subsidy off it with

there but taking is there which are because contract means So a what they're plants subsidy them, guarantee leery isn't are the to taking a hand little they it still bit NPK importers a price, mouth. while the need, for

more a of demand. subsidy on-the-ground a than is political and it the problematic -- and it's it's issue bit really So

follow? a I didn't couple of In think China, why there's reasons. China

the less million -- looking across And they is that changed the and from China. then first your from and rail with they they from that plus and in another term, have X coming seaborne coming some while and still from that I the the needs With X things million than Kazakhstan think -- short and they tonnes Belarus, production, they're Uralkali are before. from Lake were do million there coming really over needed for product. there's for Russians had inventory when recognize euros tonnes Qinghai need the the X

longer little think what because to inventory it have they're we getting because X means them basic last their will maybe needs. tonnes So a reassess of really I million

seaborne having still Now they about I said by tonnes. need that, think midyear,

and for the So less years, will Chinese tonnes. less the contract less becoming them. because of there's been and reliant is on less for overall place we've and a I But I saying seaborne think this still they're relevance say,

Operator

from Vincent Morgan next Andrews comes from Stanley. Our question

Vincent Andrews

and trying back here? on? going decision of -- Joc, market? it determine all from for increase that forth whether not? what comments that it that back you're come that synthesize would are for thresholds so the waiting the in Colonsay the watching guys to the the is get market what are just to I'm year Or sort it China half crossing price anticipating of and seaborne you today into turn you're make about the to price in in potash expectations Is you're you're looking that Or to to a certain is you with or

James O’Rourke

restarting are Thanks, it's to Colonsay Vincent. is to issue going going particular, capacity Colonsay timing I there cent about at capacity the half that think of all? now a increases million We're tonnes probably month X goes where every almost tonnes of X least at over we're year. in Plaine. by, Esterhazy of I we bit at well about the Belle be thinking know really, second capacity to I'm said, talking little in be million and its question that why Esterhazy that been a at And a If one

And of tonnes so X without overall, we've got total million capacity Colonsay.

up good America, it we have Latin need run will start Indonesia if moving get we Brazil from able inventory and where good see I -- have may demand heats down and at demand only keep and up demand X.X. good to is company China, India, start plants, potential the not then the and be Malaysia, start from the think really the seeing that come think I to the going us in? market So you export you're the for to with to not from

comes Colonsay if Now only that lackluster, in doesn't probably run.

stuffing what the think unlike Colonsay profitability a BPC price would destroy is the a not happened market there for of because product And But So we're a be be this reasonably not isn't still buyer where really to Colonsay when issue we level. broke I market I just good don't or up. in. want at actually into Colonsay

bring new there's I think that other so how careful about And production -- case to good we a be that on.

-- of It's excess it that high, risk I sitting cost that having comes now is want we capacity uncertainty not there's a the to little holding back, there. we're right but have enough market Maybe that don't if strong. that's

Operator

This to the turn Joc O'Rourke concludes closing back our over question-and-answer like session. to for I would remarks. conference any

James O’Rourke

everyone. you, Thank Okay.

agricultural The incentive yield by our couple maximize This conclude use me of elevated. messages. and prices our still gives reinforcing to key call commodity fertilizers. strong their farmers are a Let

are move So robust to and fertilizer volumes demand starting strongly. quite is

are operations return us and are our running earnings shareholders. flow strong cash significant and well, Our capital allowing to to

remainder outlook a the good we Mosaic, have positive and XXXX off the start to of is for for year. a

with that, great Have and for you joining thank our safe a So day. call.

Operator

concluded. you conference The today's presentation. now has Thank attending for

disconnect. now may You

The Mosaic Company (MOS) 4 May 232023 Q1 Earnings call transcript