MOS - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to The Mosaic Company's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Your host for today's call is Jason Tremblay. Jason, you may begin.

Jason Tremblay

Thank you, and welcome to our second quarter 2024 earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer, followed by a Fireside chat, then open Q&A.; Clint Freeland, Executive Vice President and Chief Financial Officer; and Jenny Wang, Executive Vice President, Commercial, will also be available to answer your questions.

are forward-looking are this about today's not and results, making statements call. future date be beliefs operating but management's to include, limited they and and will are statements as significant conference during The financial and subject We expectations on risks of uncertainties. based to, statements

included release results differ materially in could yesterday to results actual from our may with from those that reports press Actual the Exchange differ forward-looking the in and in are Securities statements cause published Commission. projected results. our materially filed Factors and

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

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

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

Bruce Bodine

Thank morning. for second you quarter Good our joining earnings discussion.

acknowledge serious experienced have go extremely our to that home further take working safety ensure after Before we safety and We our every we some we are improve people safe seriously, to I recently incidents. to begin, culture want shift.

earnings I another our solid then our Mosaic, on your and was we'll This discussion. and progress. Moving in terms questions. both This get published operational some our will color quarter the we morning, results to to information to of add for

XXXX. on quarter, and the EBITDA quarter adjusted of the earnings revenues for share billion $X.XX Adjusted with per of EBITDA For a compared were of with $X.X of $XXX delivered billion, revenues million $X.X million in $X.XX Mosaic adjusted $XXX year compared ago.

across our constructive. costs good initiatives, progress manage remains and the are We outlook and to market making strategic both grow our company

long are for term. taking I'll to start strengthen the we with business the actions the

the in second volumes fixed expenditures. million the have G&A, than from not we're This program control target. achieved and SG&A expense absorption does operating Brazil, and of implemented cost announcement managing quarter. of run We and production are focused in include X/X the phosphate on already cost $XXX annual making good hyper progress measures cost between reduction our across rate resulting Hence, capital costs, savings more we higher

plant We have in and to also year. executed expect to capital expenditure. are Phase CapEx X track the targeted reduction achieve and seeing With in of several benefits $XXX our down of begin second million we half on management, this third-party in Brazil contractor winding projects careful reduction our the

Our improve work operations operating our off. driving is to paying and efficiency

unit production meaningfully XXX,XXX tons the Mosaic first Phosphate in increased and significant across almost This improved improvement on seen where potash also second quarter. board. Efficiency is the costs volume in the annualized an our by production quarter improvement basis. a is segments, Fertilizantes over

proceeding Our well. growth projects are

Our MicroEssentials expansion at Riverview is up. operating and ramping

the complete is potash completed in Palmeirante project region Our on blending XXXX. new Brazil is facility compaction at track to in northern the Esterhazy be and of

Our business progress. significant is Mosaic Biosciences making

North Brazil, other products launched In biological fact, America, Central India we X markets. have and in American our China,

digital cost Our North Central acceleration global now which we X advantage completed is customer distribution We program, benefits. innovative use America, launched strength and products customer new many reductions brand, our and and are introduce in highlights provide products. improved as and on other to million and driving relationships successfully of acres which competitive service, in our the

and strength to us to capital continue business allowed cost return The have controls significant our our of shareholders. to

to months of million $XXX $XXX share year. X almost repurchases this of returned have in first We the shareholders, including million

compelling. agriculture for drove with long-term signs as demand We seasonal outlook global positive Our use business margins. and phosphate higher food, in second improvements the are we're complemented broader sentiment believe prices phosphate industrial quarter through the Strong demand and seeing for fiber, increasing improved. fertilizer by fuel the is

environment execute to brought and Brazil to Fertilizantes demonstrates we recovering well fertilizer India and results is and position demand established our solid the cost price improvements. ag contract back in floor and strong, market. Potash are Mosaic the China settlements there. amid continue in the buyers In-season

which Let's second facilities, a reach take quarter Bartow by need demonstrated progress is XX,XXX the about to XXXX. tons our the XX% We're production making end in in Wales progress rate of from quarter. the levels of New production deeper return goal year business, to good million and to volumes, advanced some where basis, Phosphate goal. U.S. system-wide of first our of our look rate our the achieved run our as we per X On at specifically tons a a run have

work off. is paying turnaround clearly Our

level. April, in rate in our New has example, a second step-up outages last the after production Several unplanned we the for will projects the quarter. the further year, the for has For the target gap remainder the XX% following significant are Wales In target to several executed improved and scheduled production saw March reached Louisiana, run in we of close of turnarounds rate. year which and production

The end see our the for to and per quarter lower $XX in the will and of rate Higher year, this pace May. in can by off to solid. All we earlier the outage we all, have are by major of our cost due brushfire second turnaround is the significant a be the caused which costs, and in hard conversion, of production brings performance after completed production year. was target than improvements as outlook was savings. in you unit rest the production remainder in continue $XX for a the year year conversion Riverview our complete the resulting activity the our ramp-up quarter capacity pleased in majority ton will results. work our ramp made The normal with progress of lower production pay to of

diverged and to brief at for markets application. the crop Ag soybean nutrients and is Important look strong the the markets. remain for commodity Mosaic of demand oil fertilizer prices world's farmers, leads which let's Now around to that with palm for on and have other world notably corn prices, move a affordable crop factor rising. softening most

oilseeds phosphate supply. rising and Chinese increasing and supply grains continues, create both demand demand, subdued years food long-term limited for for In to to new for uses with away. demand exports fuel combined is remain industrial competition and positive major soaring support phosphate, our outlook

short than reset less and in the American North is emptying we their strong In Prices year strong and first this seeking particularly this expected. buyers severe the that fill were tight the shorter quarters summer bins second saw spring. supply. have term, seasonal price and of after rebounded demand given demand with

a growers limited is grower demand with government compelling In good India, strong, awaiting is Brazil very concerned availability. demand still also importers more subsidy. are where about

balanced. market Potash spring could above well to the positive and remain well news expect in-country historical and phosphate North American strong After program Due margins resumed, strong to season, have subdued exports government tighten very sentiment a Chinese prices. we rising While planting costs, very our recent indicates received. given well material as summer averages, dynamics continue. The remains margins as was stripping fill restrictions that raw

In our in settlements restarted to for fact, in resulting customer product July usual, floor prices. Esterhazy commitments over in signaled as buying enough Colonsay the recent make we all Quarter Canpotex contract activity Asia, India in sold And meet China is stimulated X. We and to have turnaround. early sure while through a out

offset month X Keep months in Esterhazy mind, for to production. need of Colonsay approximately to X we run

We will as needed. Colonsay continue to flex

solid our Now we and and of from were fewer revenue were purchased of higher $XXX parties phosphate, segment million $X.X reported third due quarter adjusted I'll on EBITDA strong provide than the some lower strong. to up were In Sales tons color to first results. Margins from prices costs. volumes and billion. our quarter pricing, conversion first

$XXX was We sequentially adjusted expect $XXX on in of sales to volumes third EBITDA million. million increase quarter. Potash revenue the

second and were prices sales the While were down. volumes from costs first quarter declined quarter, solid,

operations. We in remain highly efficient our

with cash XX% improved production from cost production second the first quarter fact, In the per declining MOP in costs quarter. unit again ton

a quarter third of mix the pricing with second Our compared expectations reflect international sales higher quarter.

sales recorded million we adjusted of X.X million $XX of Brazil, EBITDA and tons. In volumes

Our solid over of due strategy our volume. cash results margin prioritizing flow were and to

$XX expect third in was ton we per similar and distribution to range, Our our margin normalized margins $XX the quarter. within

and production production year. our mined phosphate improved cost came due from down prior and cost Cash focus unit Our potash all rock margins reductions. of on to

in In co-product addition, sales. had another strong quarter we

Finally, a brief word on capital allocation.

not investing cash to business, we has and where changed. in returning the shareholders. We're excess strategy can capital conserving Our

our Mosaic we and positive. conclude, generating outlook our is for and well results strategic initiatives, beyond the solid is are To executing XXXX and across of remainder

let's move the of to on set Now first questions.

Jason Tremblay

Bruce. Thanks,

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

is question for fertilizers given related on soybean is recent first and corn to What Our in your the view the outlook weakness demand prices? markets.

Bruce Bodine

question. great a That's

average. global start below stock-to-use me let very ag is ratio still grain first with with which commodity oilseed historical well So market. constructive and the

like have crops prices soybean favorable, and and rice. oil palm are and and for corn especially Other doubt no oilseeds While crops softened, specialty grain

the to of support to couple that potash crops related want from fertilizer remaining And remind continues to we've I corn demand the And and is investors, calls, said only consumption soybeans. last and phosphate X/X constructive the of in pool as fundamentals. earnings

strong level, key the sell all At a higher is phosphate across in. we demand markets

conditions, demand potash, for all Asia. application Southeast India For of further favorable over China recent The going multiyear pent-up in to and current and particularly under stimulate seaborne definitely has Asia, are the settlements contracts demand prices. come given the attractive the back weather significantly, demand

about to over the talk a demand. going I'm more to that, Jenny near-term With little details it to pass

Jenny Wang

Bruce. soybean no that Along growers impact the yield the There's U.S. news prices. which development, prices. Thanks, hence and with corn, might doubt in and watching Brazil whether projections that any future are about the

had fill in North In terms America, a demand we summer of near-term very the strong program.

have available in is XX% robust. our In and we our demand [indiscernible] is potash full QX sold The swing. out season Brazil, fact, market. phosphate North of [indiscernible] In in America available all of

at We expect to going record. be a to new or shipment a is record set XXXX going

very execute full book to We sales a are having upon.

We very have rice, with production crops [ get QX for with fertilizers customer India, a the corn to and to potash their wheat both available our For have into more in strong favorable the DAP country. very phosphates and domestic sold ] growers [indiscernible] year. on shipments half order other we of maximize first of monsoon, in their China, need In In the prepayment. XXX% seen strong

XX% strong food We and very by by supported growth year-over-year, fundamentals their to policies are ensure supported security. ag seeing

Jason Tremblay

Jenny. Bruce Thanks, and

on latest do how out next phosphate question, see rest the the For is of what over the you year? And China? that of exports evolving our

Bruce Bodine

China, we this of we and a of lot for phosphate out exports anticipate global pay Well, limited to is something which prices. bodes well attention phosphate

half tons to XXXX and demand, that time prices were due demand both approximately to in continue China's exports fertilizers up, uses. going ask remain below and the same limit and share over to strong believe considering will to for the or further domestic industrial in-country export details. X pass move tightened First restrictions it million domestic Jenny be her additional I'm to we some even escalation. With price to likely potentially that,

Jenny Wang

Bruce. Thanks,

mentioned, China Chinese the tons. a the million phosphate. in first or changes XX% S&D for As X reduced by over result Bruce export in That of half is local

the phosphate in which On the probably domestic the increased first demand shipment XX% half of over record. side, Chinese the year, is

several They're factors. driven by

fundamentals security. First, strong policies ag food supported ensure to ag by

growth of years. X planting and meaningful vegetable Second, fruit acreage last the over

of seed have maximize more yield. introduction the to required the Third, high-tech balanced technologies fertilizer

And are some for demand. seasonal lastly, we pool recognize there also the earlier full

Chinese the of As the of increased result year. domestic a significantly phosphate in it, the has shipment demand half first of

side. look let's the then And at supply

fertilizers, especially products of fertilizer PPA, reduced DAP. to Continued like industrial production from LSP, shift availability has

the in X.X to XXXX The increase of reached growth rate LFP from represents an and annual million compound to production over half year XX% that of which over year-over-year XXXX. is of tons, XX% first has the

million of So in first XXXX, shifted over to products are LFP. X the tons DAP half of

had of the So rising controlled demand, of the prices the phosphate tightly of out growth domestic China. export Chinese have government reduction production plus

half continue second to We going forward. and the going is expect restrictions in the

Jason Tremblay

and with question, for production perspective? the from of how next the going? see a is do your ramp-up Phosphates cost Sticking year volume rest And you out how the playing

Bruce Bodine

X especially benefits, phosphate our And result, up. We as the making in past production good a months. seeing fixed cost significant we're in progress absorption are ramp

production conversion unit and can our progress You second see quarter volume the in costs.

lowest up since Our a our is were volumes XXXX. to end cash XXX,XXX significant achievement. were of the tons conversion close which the sequentially, And costs

Louisiana at production example, We are our maintenance to Wales, for well return sites, particularly to for contributing have in run further We'll of business and required New certain production objectives. rates undertake historical rate for and our and performing are year. the the Riverview which several turnarounds half second in the the Bartow improve

the schedule from production X.X range be we turnaround the once always in Though turnarounds the to the Note, annual back on quarter-to-quarter we decisions product of will from mix of normal get turnaround million produce. a and some those normal to we tons make routine million see the due into finished X.X phosphoric activities. we variations acid expect scope to we on

are Unit as to $XX we production cost achieve to to expected operating ton demonstrate costs improvement in track increase reduction from and higher continued $XX on we're efficiency. per

Jason Tremblay

switching thought to the over restarting Colonsay? Now Potash. process What's on

Bruce Bodine

that market for we been minds. of It consistent But operating objective meet to potash I question. One our a flexibility component ensure and an important objectives. lot people's thanks to for our Well, Colonsay we've it's know meet with the portfolio. Mosaic, this, is of gives us demand. on is

customer focus meet is Potash commitments. us that contracts produce are a and floor behind product our is enough price Now the China to established, to of and settlements India the

our with maintenance in quarter product have the Esterhazy In replace must Canpotex, scheduled And for in commitments approximately And have every of year. restart fact, our to month which X and assets for operating Esterhazy of We X mentioned Colonsay. meet it to third approximately we quarter, of order out sold as reminder, production. enough year. on scheduled one hand just months turnaround is for a takes just we to this the was activities Colonsay third

Jason Tremblay

to market is challenging has from next question perspective? related The latest a quarters your is row industry. for Brazil. situation within several Our your in the What been

Bruce Bodine

participants challenging over the strong market. the mitigate a to year. of experience with results. it risks The Brazil agriculture many deliver I operating highlight on for toll environment has in past our market in and decades market-related has will brand taken expertise in Brazil has and that allowed strong the been deep us And distribution X

geography. geographic to assets, us and scale, efficiency ports, succeed production, and required cost Our with this provide blending which include facilities the warehouses in-country diversification in

and allowed that demand. as turned footprint in for have their reliable Our gain to we us have country. here further large to us meet strengths exited are the advantage Retailers have reduced or to others market and supply, growers

Jason Tremblay

Thanks, Bruce.

For you meet track previously you on cost CapEx those the targets? savings related next question, and to reductions. to Are announced targets

Bruce Bodine

the significant progress point the costs recover. Operating phosphate We cost as our There the have past the Fertilizantes higher to in as results however, the in came CapEx of do previously are continues volumes X first, XX% initiatives. as categories: phosphate, X operating end as have improvement in you our year. conversion our cost production We've in decreased not the We high had absorption. production down on months, mentioned. costs and significantly well. I efficiency further segments last from and made cash potash good fixed In see, improved the just efficiency. expect year very And the Mosaic remainder is in volume of segment, can

segments phosphate all Our production time X conversion unit across the of cash cost rock, same year. last mined and declined since potash

exclusively cost focus on not our operations. is Second,

all in of reducing focus the on a costs have areas We company.

have to plans implemented we mostly first pleased phase reduction. announce to reduce quarter, As we of have third-party contractors. mentioned headcount, I'm that last the had

the start XXXX savings XXXX. The We reaping in $XX of million $XX completed and second full be by will the program to in half rate benefits million. run will mid result of approximately

million rate Our X/X cost the other achieved run about of in Brazil in SG&A Since reductions, initiatives, $XXX inception the are $XX controls target. million also total on of reduction cost we the have and track. about

Finally, on X projects growth the CapEx the front. We several in months. finished past

wind track As year. million these reduce by to projects this we are continue to down, CapEx $XXX on

Jason Tremblay

move now question-and-answer Thanks, follow-up line Operator, open for session. Bruce. With the that, questions. to on open the we'll please

Operator

from first from Ben Our Isaacson Scotiabank. question comes Instructions] [Operator

Ben Isaacson

the on of the business. Phosphate Question side

prices, crop Americas. in about doesn't disruption You have prices the worried doesn't about it but you're China. demand like sound out you're low worried issue of like an It sound trade high becoming against flow

my then in hats talk So demand expect if just to on? terms you where this DAP follow-up, And you on, we right phosphate that? equivalent bear as be our now? it break supply Is LFP going Can can what's address in to cycle you new put about coming XXXX?

Bruce Bodine

then it the look I'll to near out to constructive Phosphate any And your lot that pass new there Ben. commentary of the announced agree, is LFP. thanks, significance. Jenny that's we But on of don't very and prices over historically Well, or term. -- that something, the part is on come question far historically and change could of as in which there see near of capacity as kind a influence we maybe fact term, which first been the take what something for for price on, outlook not the has

play very how to out. are We're going about optimistic prices

of margins doubt, see the No Jenny at the in chat, it stripping if kind overall XX%, back about doubt If the is in oilseeds, half that and grain I an year constructive, at issues. crop is is and no pressures and our fireside and But total affordability healthy. range. demand you over look very well very on mid-$XXX in it's We soybeans But you example. certain of that to areas of and corn of as and that XX% the think P&K soybeans corn look in XX% quite affordability, constructive $XXX. other still continue which there's kind other talked again, then on honestly, although earlier

oil, coffee, palm like example, things For sugarcane, that. other

think catalyst never out know to But I But change that's that, what it what take. don't see like future. right or something now I the come that could forecoming geopolitically would a big in you but

Jenny, answer itself. add you've else to market it turn the or over maybe got I'll anything to Jenny the to that, on With LFP if part

Jenny Wang

mainly this for at point Chinese also mainly Sure. want your in of remind LFP, and question time, to Ben, Tesla. probably producers on just and both ourselves for is LFP China Thanks, used to Bruce. used I

in a have was XX%, been are already production as LFP. LLP adoption Chinese battery meaning the of EV, So EV batteries for up XX% used to using the

LFP are ever global there going reach believe is to China going is forward, big EV to the level in believe to -- today. it don't We projection very battery globally. Longer-term of to protection on XX% is going somewhere We for between as XX%. LFP be range growth adoption the it

The on shipped -- and mainly the ESS of in on as and -- LFP energy XX% produced and rest over Tesla part And adoption world of is being the driver that already by storage really battery battery. storage well. adoption on LFP that to is other stationary China bigger the

that we to going major the LFP driver is be for going And believe forward.

wide So you a lastly, use as proxy rest going probably a lot which from of storage the driver. of is very battery, range. if the be world growth China a don't people And future for continue. going the to to attention on EV, bigger pay is stationary And

Operator

comes next Morgan Vincent question Stanley. Andrews The from from

Vincent Andrews

be Wondering if with, just 'XX both for don't give whether think us just and on we are to why you going those expectations have year could to industry update for began. -- start off you as start then where since And improved phosphate and there? potash shipments an the

Bruce Bodine

Vincent. thanks, No, Yes.

For in the XX shipments. to tons million million XX of phosphate, our global projections range

that range XX million is million Potash, For tons XX tons. to

set think little develop that, that what Southeast potash. based really and provided numbers kind million in the seeing our on of on industry all confidence kind have and in China Jenny, the up have me bit, a where that and sentiment correct in midpoint around India I gone in general, Asian in have that's kind we're bottom these if markets X of potash settled I'm Asia the and wrong, given -- contracts of tons

us, the given very year, think is has I that the Vincent. since supply Phosphate, don't of just changed beginning that On for much range limited,

Vincent Andrews

situation refresh But pertinent where a that or follow-up, back you any I U.S. as between give CVD different is, then update could and some if us believe be the under would if could there, And you in just a the the just helpful. agencies. still an it's on forth Okay. us update relevant give

Bruce Bodine

and track, ago we've there's going said out on Commerce last OCP down came those final with always before, owe And for appeals know in that industry But preliminary. Yes. of still they but lot for XX%. for their year the and numbers preliminary There's rulings The went for a same the Department adjustments to up XXXX. out has it's EuroChem. then stayed hard will as space. and rate They -- again, went in November. months that several ITC XX% come like PhosAgro, those about are I

and see between then. wait happens what we'll and So now

Operator

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

Joel Jackson

seasonality normally, you're margins [indiscernible] business QX volumes Fertilizantes, Talking in about you than the is versus maybe time smaller can about seeing in earns that for going in we're Brazil? we you normal? it point QX. in about more seeing Are see talk to like earnings in normal be good talk similar a business? -- because in can QX, -- Are obviously versus what to QX QX normal Or are margin? to just pretty was where seasonal or the QX QX you'd destocking QX see going bump

Bruce Bodine

we're range start maybe the Mosaic could pretty $XX for of and pretty there's news are $XX that lot performance the with having that margins as But our an some high we to Thanks, space, for Fertilizantes. on don't a in at us, overall not level just and get know steady And much. really Joel. of of changing volumes see this be distribution see I seasonality. do and players pleased the in But other staying Jenny details I'll can opportunity. success good that into

in market and get total and due that full end fertilizer demand some see -- at for Jenny? still Jenny On some the very the things, Maybe the for or still year. of good near can year volume see into still overall, to volumes overall the see side, year. historical fertilizer but that, there's at Brazil, in shipments risk the

Jenny Wang

see today. Probably market in want little color to where swing. The of the I as season, on we provide sulfur and seasonality Bruce. bit a full just Sure, the it's

delivery demand are for crops. very the is strong very the selling seeing are farm their solid, economics which farmers own were QX sulfur The We is the and ongoing and basically season. the

the ahead same a and at On but years of selling as average, last corn average, than slower soybean X year of X they're they're bit year. actually though years little are of last

selling So which their farmers are the system. crops, keeping in on really the improving really pace liquidity are

specifically year the to new XX% year, full And number If commercialization. shipment record lower is call the set the last is of year for year. they the for full has been we the fertilizers a sold. fertilizer, going for assume than of This slightly

For Mosaic, pace we tracking the year. are same last of as

So we really to sales that, are trend for the the the selling customers value, of focusing our even risk. on lower ahead are who with we season. And a shipments market we're much the volume prioritizing credit have and and

are there Brazil going season corn is cotton. potential sales, going and for to be final shift into might to shift to in November, be from December And some what is going January, is QX that Lastly, there define the safrinha the sales which be. a shipment for

are relatively season farmers The more cautious -- that seasonal for buying. of

in year. the today, previous and versus seen safrinha buying the of of in have mid-XXs the we for XX% As

shifting So into it's from There of might QX late slower. early relatively demand be some the QX.

So that's basically the situation.

everything have our in We for We're full mode. QX. execution sold

Joel Jackson

Okay. a quick. kind My question of would second X-parter be

and you beginning Just call, maintenance. the of at about the talked safety [indiscernible]

a Do get run think a question, just second in bit Bruce? that. more? questions about getting you X phosphate you sales versus can production you QX improving elaborate of QX. rate So talk quarterly And then million-ton to Could that on quickly lot in QX,

Bruce Bodine

incident And get us worse wanted that operators. outcomes the for a safety about not actually just and was a recently, fatality. we thanks to something news New headline did -- industrial had questions. matters, serious Joel, as But very that. it Yes. at but incident Wales -- did transparent the be additional is It's that for

there'll and seriousness And Mosaic. the said, across have the take geography as those But any incidents with we very and shared feel by for within and we that we learned that. entire of lessons seriously that be families impacted

the saw X Phosphate quarter return ramp-up as quarter results. to to On production, X, demonstrating definitely and you

hopefully of little the on on color of more earnings we're think I progressing. the in presentation slides kind we how our a material one shows have

COVID, As we've several Wales and we up New before. turnarounds, there the back in signs on that finally shown Bartow and to due catching talked we've have good going about the said, calls to investments even made as

get but seen hitting we're Louisiana got Riverview to ramping had about more that quarter, New of there Wales but of planned, but that conversion is kind there demonstration to at a of the then some the do X, on with production that the the run the to we've granulation way kind our Bartow as that work that more have rate more up, work that the half to of we'll and talked still we've ramping second historical MicroEssentials aggregate and well up that year back as we've Joel. over then go in about, also large one and confident of we've year. we decent in do brushfire that the the plant in operating optimistic the that that up teed in half quarter hurt talked still before that and have to with and rate definitely work And we

Operator

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

Steve Byrne

your -- year global question were back think we pricing supply, out sanctions? the they Are in levels why And yet to or really relatively or bit, same inventory view on is, normal? a the into I'd do were soy had raised of of you the roughly years you is XX% And potash a have global back we've to but as drill your roughly levels for the shipments I a XXXX? normal for do like got of world fundamentals, low. whether outlook that value if here guess in proposition your you my couple a getting you nutrient to are not, Canpotex?

Bruce Bodine

it's pretty on how potash a easier we complicated I the first market. that's to just mean supply. Steve, up Yes. question. mean I see back on overall maybe

of But just but have last Belarus, the shifted been last this versus over you're both FSU, getting product Belarus, in Russia exist their it's year, yes, couple They're been been around. trade There's flows years. particularly. on progressing in rebound particularly we're Although, sanctions year products, seeing large and right, a out. the

the for those by them. cost hitting which with numbers, Belarus ultimately So markets. They're how logistics into markets markets low a on larger are into get $XX on that to prices they raising the serve it is given closer to can share in, about they are they available. the could doing probably they're Think have geographies just to just of the that home to historical them, go it's given the to that have to just taking available gymnastics $XX versus is tons umbrella but at coming rail participate restrictions in China, do type potash

But there several buyers. are

you If at the way, whoever matter. importer. look going because they're need it geographies really want large Brazil they to from that that don't is buy to sanctions a to

so before again, seeing is trade side as Steve. demand well, around. the much it we're to supply supply as is just moved And was the returned has think kind that back, where come the And simply of flows return it I And then sanctions.

this XX it's to near year, at record. So at XX to or million million-ton be going outlook,

down the and becomes think as I the more are available. supply So nutrients more going

compound constrained happens, needed, going obviously, And growth mines that coming zone there be growth then in long announced pick significantly going annual see you to are phosphates. as but term, for probably keep it's more X% And rate, potash, in what expansions a on. prices to in demand demand instance, than and unlike to your is may X% number, phosphates greenfield in

to anything She's Steve. know saying add. no, you don't have I if Jenny,

one. I So I got guess that

Steve Byrne

with these that believe this do different the Okay. for you your the drill just model through is of both a in you're now blended that nutrient where P&K application rates completely reduction Very that a this guess blended like bit what you uptake. the that are selling biologicals any effectively sell? little model question channel? on they Or you I'd that Are I my going? those And to in material on result Just is biologicals? do sold is involved business good. selling, on in see I in land? And business required P&K biologicals

Bruce Bodine

Yes, Steve, thanks.

results believe we we excited the with that with higher-performing least And real in the at we we and our marketplace, distribution of synergies a the First off, customer about we're biologics. brand data-backed science our that have lot products relationships, what to market. have, see we're bringing network,

we a that a going they're to meaningful more. of more and fertilizer think let bit these. of are the what complementary And growth currently products delivering application. have we're very potential impact I'm little get But into for that results Jenny yield the to and good overall already lot we we think unpack selling, to And without in see we market that significant details

really helps out story X in a of the how help this X get land. combined of growers standpoint of equals fact, X more amount X the than regard or the and In so more of farmers to from yield plus same acres

develop launch a prerecorded But work comments. in some to programs geographies we Jenny's various team of about in been has of our -- lot talked that doing

to points So little I'll turn over Jenny salient other mechanisms, it bit about a any to delivery there. more talk and

Jenny Wang

customer we base through Bruce. go the the in you products basically, fertilizer our our can go-to-market current current are access, firstly, market imagine, of terms fertilizer and granulars. the [indiscernible], with the Sure, Steve, for coated as products, bioscience

go-to-market product. for is our one the that of So approach major

leading that fertilizer America, basically one and the major currently on brands are we're selling Central North So coated in the of granulars. America Americas. PowerCoat,

are brand current bypass application. sold a foliar as have also a standalone We

So fungicide can treating insecticide that crops. when farmers so and be their with the are usually mixed

have front. going we're lowest the which to we updates product and as that product, invested give provide next-generation well working the near in go efficiency that to likely future. that nitrogen we know fixation can on seed is the go-to-market major And several in As going cost. the coating, more And hopefully, the seed approach, is with with you companies highest

Operator

from question Fargo. from And Garchitorena comes Instructions] Wells next Richard our [Operator

Richard Garchitorena

what being Can touch and quarter? on And Colonsay. potash to the basically to that, with you're during doing related in down terms Esterhazy. then at how the turnaround restarted. also you be long And wanted Esterhazy will Just quantify of Colonsay

we do ] of you the production? this essentially to to cost into associated the Do costs bulk be for tonnage go capacity guess? to then Any expect I sort And that the normal [ replace capacity So impacted with XQ? And Esterhazy, how lost the is turnaround. in filling just that? XQ, portfolio back during of

Bruce Bodine

or things equipment into few at turnaround, a minus and you on of they discoverables the now, plus have thanks. as pieces roughly -- you always. be that it's days Esterhazy, Richard, We like as will get that and mentioned right do month, based scheduled as know, as

But comparison, as Colonsay to about months the Esterhazy production. X run of month capacity on based we to talked about, have you offset X

So Colonsay volume to provide exactly likely is the going to run offset you as much year of the that remainder said. of

as do as and at then to to exactly we the our serve sure where maintenance talked about, or is do and domestic this and meet for our and flexible what tonnage position those we to like Colonsay, need product where as a commitments market in is demand that make backup before international sure look that, to make demand needs to turnaround. overall we've times we our meet can we in warehouses demonstrated instances

America. as cost our Belle prefer in solidly Esterhazy here always, -- in standpoint, cost. X to we those From and Colonsay run first are low-cost low-cost North Plaine a producers is higher

the likely be Colonsay during that's improvements on there's production stripped costs in we've going time cost effect off cost over significant to and made So there. running. times that some But,

the is unit cost standpoint. to an cost significant from be overall So incremental that going not

time. So next move and question, Richard, I'll it to the on leave there, given

Operator

Samuelson Sachs. comes question from Goldman next The Adam from

Adam Samuelson

shipping averages and Bruce, remaining in prepared historical well alluded so. your you to remain phosphate to remarks, expected margins above

specific how ask question through has gross realized the you're gap of -- of current margin big whether you -- of some and some input of per given prices, actions you GAAP business the own per EBITDA prices Just of gap phosphate big terms within a taking, or current in ton cost your -- and what ton, a how would versus dynamics do your see [ trended in went down buy. ] gone your margins that haven't despite gas stripping is ammonia that a and And the internal sequentially which prices second on ammonia production, and if much. could moved all Tampa really the ammonia up reflect? quarter more really costs lower had quarter, could you COGS I the cheapest Natural the

just on sequentially? have clarity So provide can gone ammonia costs why the up would you

Bruce Bodine

Thanks for the question.

exactly stripping little that of bit insight have something advantages contract Let report don't production it with as actually, me margins. that. on well our lot you internal we up X/X we just answer And But as than stripping margins a cost at as well, what is to economics. benchmark that's long-term -- of ammonia Faustina -- CF because probably differently, higher are said realized don't our at our maybe a producer

it given just a us sulfur good geography that's where power ammonia even on our buying gives advantage we raw pretty spot, for the those well. left then import as and And materials

turnaround inventory. through was So did in cost, that really and it did go QX, quarter raw from we QX, where for our ammonia just actually as spot up plant ammonia that's into that's for quarter Adam, have on you material into much of more inventory X, quarter down going X X. said, because And ammonia in flowing

the So you'll X, running those X. of in more quarter start quarter benefits see to in

that I your hope So way. little of question answers the a bulk in different

Operator

next Chris from Research. Wolfe comes from question Parkinson The

Christopher Parkinson

be people cost out. than great is a you've the what Phosphate is is in is needs your it low balance what steeper for kind Bruce, belief key, been cents kind done anticipating, a would little your think further current the the else investors? right execution execution have crop context of trajectory dynamics is, now? of I'd bit that to laying prices? of on goals higher. out little reengage two stripping are mean it I been sheet -- to condition. proving The you curve say, Just much market do just in your on thesis looking be margins Is your bit very

Bruce Bodine

agree, there for we as to point, the going be we're I market But big more and why a talked much don't Yes. I that credit appear just out and strong not your given be how that's thanks getting into mean question, derailer. we to fundamentals, are maybe Chris, leveraged about, phosphates. to see anything

it results. and think on execution is I delivering those

rate. But making million see still progress, have ton our and kind half year ton, feel we're I run back executing a commentary go appreciate we're to in million about million Yes, that X.X of and the good of strategy. how the we X.X on the lot do to to because X we

to Going deliver into still XXXX, got that. we upon

cost noise that annualized too -- So aren't know, basis much our that numbers absorption and now, as cost we'll quarter-to-quarter. and as an and in with and on cost savings on because from that, of of those right absorption comes report you well significant even reconcile just

execution. think it I So is on

export. fact food maybe, available in country, any the demand that have seeing side and and then people LFP for it here, got Phosphate is cannibalizing you about, think focus we're don't Jenny, on in the going we think can't other China that Based just people somewhat you've agriculture, floodgate PXXX. as way. some talked very And on Jenny given we agricultural significant and is domestically I just industrial is ignore the growth on good China making the has on up open see and their if other is but on comments that to magic thing the -- security intelligence is

for policy demonstrates going in OCP this I in take think fact that exporting little So believe that what of is the kind less that. may China to exporting more, again, But a just but impactful. year how bit neutralizes it's that. people to China I is be don't that know much

So we can for and on in constructive it said Phosphates. fundamentals just longer. see little demonstrate And Maybe doubt, we've a got to we we bit people very what just no control. to see execute got

Operator

comes from next The from Ben Barclays. question Theurer

Benjamin Theurer

to half. wanted Just thoughts get Fertilizantes your on for quickly the second

You terms first in distribution very clearly a margin. had like half the strong of

could you like there. the and quarter you preliminary puts like guiding for range for higher? at in potentially the about And a are What historical the think take preview if the takes you could that fourth give Fertilizantes? being as us You're profitability

Bruce Bodine

annualized bit details. very turn at and more over to the about to basis. margin, see an Jenny, high we half X maybe But contribution EBITDA growing in reiterate the kind optimistic in to a to tons a this I'll of volume Fertilizantes how is on business year just on at just distribution it we're co-products million level, from mean level XX of I'll a little -- $XX about million again, of high start distribution $XXX standpoint. historically a fill tons million second $XX

about our $XXX another the worth SG&A it's think costs off haven't that but got as thereabouts -- we of of something top. maybe there's take available it's you to publicly, And in much million talked kind but information, is that highlighting I

volumes out So demand the throw together, the what EBITDA good returns all think math year. on performance are contribution do can Brazil, in in of But that given quarter-by-quarter we historical or you you to do. half based Fertilizantes whatever second Jenny? be on of and the you going the see

Jenny Wang

guess is quarter, solid QX repeat, say we your the want executing we're -- is volume historically, The ton at to gross QX, the per upon. book. question specifically is $XX and historically $XX just sales on have That I for as to I Yes. QX. highest the range. margin

sulfur also safrinha want going depending total on to season. first some is to higher on bit how a than we QX of shift from little less a of volumes. which half the the in nitrogen half where QX, remind be market is into the might market, move participate second QX, And For much has the there percentage season, QX the

reminder. a that's So

Bruce Bodine

[indiscernible] to thing based. Thanks, the about mean think month, other movement are weeks, there's providing over that tailwinds. is I with the only several definitely operating last Jenny. our tailwinds The some FX maybe FX to costs

that expansion well. as So help on should the margin

Operator

question from comes Mizuho. from Edlain Rodriguez Next

Edlain Rodriguez

in seem Jenny, the a see can forever. between gap Bruce P&K that it of P phosphate that How by continue quick resiliency does just narrow I terms price. like K Just doesn't going do that or out disconnect playing mean, or Because down you of up? on prices, gap like question coming the

Bruce Bodine

on X any independently you your fundamentals, and than -- thanks think what It because just question. those need -- the much but a demand is It's And And to scale from be it be and the that just global between for on know doesn't think on commodities. demand today Yes. our those the better I different I X ball to supply go converge. they going going are thoughts are they very help, this. commodities is crystal fundamentals supply would Jenny, mean divergent back yours. don't Edlain, to please I and standpoint. just my

the market comes next Supply down It a crops has the got Potash. can over on We more I supply. earlier, And the to decade. what what said as announced, know probably to come need.

clear it's bring as what your as to phosphopates, not going to point, be just to catalyst In pricing down. is a

I the lot in is I of where the ZIP we're don't today So And for see pretty a of meantime, with foreseeable optimistic on K, are on there. There risk prices P, the prices think solid may code future. divergent to uptick be add. dramatic and in doesn't Jenny change today. they're but moving from just It seasonal see some year, K year here there because some don't like to P moving down and up have anything looks or

Operator

The next question comes UBS. from Josh Spector from

Lucas Beaumont

conversion to to in kind is I comments phosphates. the Beaumont of Lucas on just go Josh. back want for on This your costs

run of that to the they're end you're about $XX. rate, of currently. the So a when X%. million-ton still $XXX ton running And go the you a of from XXXX, like down ton about mean to of $X used or But XX% If produce year-on-year, X down sort they're year. I at kind was about XXXX, kind back only we

of that $XX? So going there kind run we you is mean, up there's of where to of there this year or benefits be I it or you help sort back How but end about? know it we can that the to frame as thinking 'XX, range you're kind about get rate, that up? think us of should $XX sort Is be in of sometime the

Bruce Bodine

we own of reduction more Definitely from $XX of volume that we the and produce about rather generation approves and we'll I total that don't our to at high, kind may power electricity there's Thanks, in -- But there. absorption, cost overall, than $XX buying see that as like benefits reap benefits other see internal that generate historical cost. definitely Yes. fixed third-party, Lucas. we've talked -- a

seen we number? back are $XX numbers. the definitely don't those down operations to But Listen, historical it's to across $XX, no further from we $XX are overall run globe see in that improvement, I different, and now get as rate. right we we've see States, we that should another our maybe Will the United inflation to no where get that back getting different.

Operator

The next from RBC comes question Wong from Andrew Capital.

Andrew Wong

that flexibility? or the have more mid not broadly and cost kind just would on And little the shut on scarcity standby? excess when like And it? standby? see be to maintaining behavior, to knowing you Colonsay needing what rationale it potash want supply? anticipate supply that cost on if can what's talk buyer the on a hot for can sense strategy, XXXX, down would Like make And available savings? you that and available you more do maintain capacity maybe have a do still impacting [indiscernible] maybe of to permanently they kind keep of just flexibility you just bit that supply that be about How like

Bruce Bodine

based as intersects upside for significant the does try we've on And we America demonstrated for Yes, control and where Andrew, to the it our have North I Colansay commitments responsibility to appropriately in flexible Canpotex demand our that us. mean we have to having that we value and we to to think with when a option provide there can. that both the volume market it optionality shareholder customers that is that

that's particularly the we have able on up And the for. tightness just to to and because be up we our run a lot and a it of dog big now that the take equation we the buffer side, that don't to market make fact out. the you that month, given inventory tonnage the to for built need right But is in out of have inventory

How it always going to what it in point, and marketplace, come our will down believe make to for we the Colansay look going does own time? that same value shareholder in regard, that at at, what's we on. it As So we'll the is have said come long intersect future the looks needs come on? always to opinions on to your like do proper And on that.

we have as for Esterhazy we Right will offset always but the now, and and shareholders Mosaic to end year. on our what decisions continue, and Colonsay is the have focused turnaround, the forward. the to decide run our with monitor to probably going we're best going to to through of that do customers

with to couple think I'd of is I with operator, conclude just operational call, So that, delivered the quarter that One solid questions. second like done And just reiterate the on a results and performance. I'll key Mosaic themes. we're

on steady returns. the costs We and progress manage making company, initiatives grow our strategic maximize are to

And and outlook demand world, XXXX market Fertilizer robust is remains constructive. overall our our for the the is around outlook of remainder positive.

thanks, great day. everyone, our So have for and and joining a safe call,

Operator

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

You may now disconnect.

The Mosaic Company (MOS) 7 Aug 242024 Q2 Earnings call transcript