IPI - Earnings call 3 2023 | Intrepid Potash, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash, Inc.

Third Quarter 2023 Results Conference Call. [Operator Instructions] The conference is being recorded. now Investor turn Relations. would to conference I Mapes, Evan Instructions] like the to over [Operator Please ahead. go

Evan Mapes

Thank statements and by remarks you, and forward-looking uncertainties forward-looking XXXX Emily. CEO; us is based are to Good from Co-Founder, Bob to securities morning, everyone. risks and Intrepid's statements cause no Matt Intrepid's incorporated Thanks Marketing, to us update Galassini. Please reference. Jornayvaz; review and could third laws. in our different questions actual information our today, VP to risks and questions, results on uncertainties during include answer These is be as defined that the Preston. assume with to be here to Adams, Chairman quarter Executive anticipated that Q&A session are results. With are answers CFO, really subject today our filed Operations, materially Zachry we John U.S. today, VP and available the SEC, are discuss obligation and of to your which me advised by and for our periodic described Sales Also These joining them. including and of available reports those

financial and mostly today's call, we included measures. release. report certain comparable Reconciliations to press During the GAAP yesterday's operational non-GAAP directly in are measures

call turn SEC Our our on filings and press to Bob. the available intrepidpotash.com. I'll now releases website are

Robert Jornayvaz

attendance and pace. sales well was Good remaining Evan. our quarter with last your Intrepid you, morning, quarter Thank for of year's volumes in XXXX appreciate everyone, ahead our we strong call. Intrepid's interest third and by highlighted third earnings your

the good and of total sold in the the potash, U.S. farmers For sales reasons volumes include, the are in third XXXX. where potash XX% and approximately through respective finding couple States XX% we United our for over in first, value year-over-year. market Intrepid higher XX% remains this demand market to the very A quarter the by of Trio, just represent to netbacks. And XX% third comprising with increased sales in quarter, benefit potash XX% projected mix is for also of important increase the second, added providing of about our premium feed while

demand which Looking quarter an of average, provide corn in for open the ahead, season. ahead and continued fall the window expect is soybeans harvested helps X-year tracking application we as solid fourth the

volumes could we've impacts production rebound a had our last While have nice trend versus XXXX, to from priority XXXX support the to seen strategic our available correcting sell tons extraction and failed Intrepid. potash key our owing has for in markets well, fewer what the year's from been

directly to high been potash focused we project revitalizing on and are we production end historical our has program our on of to very the assets increasing capital range. way owing that execution, our the Our feel well to our confident strong

on corn agricultural and profits some to been for diving close soybeans commentary I balance project mostly provide shape. markets supportive. consecutive highs generate Before agricultural details, values several in are to healthy third wanted They're potash. outlook farmers into U.S. the have year, Starting record futures and as with remain highlighting are and quarters, we've the solid for for sheets, the to good the projected farmland for markets,

than oil, In still that and or international all trading cocoa highs. like historic addition, record at either are sugar, for commodities coffee are key levels pushing higher palm averages

imports this demand This expected still into XXXX catalyst States, farmers. for is with much better has current of and for more United the to tons impacted rest served which as led being continued pricing, continue potash, For for the trend by to stronger into a of Russian supply has from XXXX. key value

should with come floor until disruptions and we show of will potash supply think possibility heightened constraints markets the or still global from that at risks. about the additions of regions come world's for near potash, for of significant Until side supply the medium forecasts exports geopolitical in some the pricing XX% third-party a more least higher resolved, On to online. these the or are we see term risks face

outlook, potash that of annual production Intrepid constructive the our high end paramount to it's the back range. returned our Given historical

I the brine my share do to pleased quite execution our way our production goals. earlier typically potash project remarks, time, eventual well that makes our that for harvest As to recent mentioned very being to injection us meeting an that cycle to in folks remind stages production I'm want from are takes our process. from confident we XX-month to We XX- on

the drilling our this potential, months of HB. brine frame at the we've we as already months Throughout production time. potash to are in brine key XX well then has designed as maximizing inject at of ore residence availability, need essentially production production. tapping our maximizing we the Maximizing higher consistent most we've in started increase to results facility ore After will of highlights and have the drivers caverns on foreseeable the to concepts over goals: much higher brine injection year beginning projects and our were new reserves to our some into year, availability the project since see reserves in At as which our circulation having business. implications XXXX. I future. Moreover, good possible with XX and time, key benefits significantly Moab, brine accelerate to we and process a caverns several start of at growth. projects means stressed X our importance undertaken HB Moab to need want over our access long to lives time at second aspects our and the ago time. These over hopefully for commissioned, and new which well add X for significant availability Moab However, with clarity projects the from to as brine to residence underground I'll the XX our the quickly growth reduced impact touch and resource multi-decade brine that, to been more incremental go technical half of our now some will of of the

possible that have canal system, have being much our as to approximately ensure brine miles upgraded our as we For total XX,XXX XXX in large-scale stored Wendover, then ponds surface brine evaporative surface through need which and we the acres. which totals of in transport with length, to area approximately

that and In time sell effect this residence stay unit concentration and goals ore brine so implies inject, for potassium time, contact chloride increased higher-grade economics. volume terms to more improves extract. that long tons maximizing the of both maximizing brine and is we with brine we will of of letting to eventually that, achieving more enough residence in brine, to having our the which of drives resulting production time, By availability extract enhance

pipeline availability complete, injection With limited and the roughly commissioned HB, we of was be the lower Phase operating occur which the expect X on residence of pipeline key project production Moving HBX. At When of addressed months has installation highest the company been our in pipeline is by in and XXXX. is project, solidly. This the times to being driver foremost highlights. spring a to X this the rates and injection new history. should in is XXXX, brine the first phase, ago of

was which half projects X the high-grade already October, potash have HB term, our into second year. are we long-term that designed operationalize. One first commissioned a as were the where bridge recently ponds, of to to serve will at with expected to brine next also a we commissioned other have be extracting in in near production, However, increased the very project in

of released week, press brine ahead to was the million Eddy XXXX gallons brine evaporation last project project Cavern, first The This Eddy the our of the summer extraction be into season. expect and of brine we high-grade in project. targets pumped all XXX Shaft ponds this

this our for corresponds to estimate production incrementally into XXX,XXX product half be tons figures of production and the evident in second to which brine potash As starting XX,XXX impacts, XXXX in XXXX. we continuing tons, will of source

approximately source high-grade By HB 'XX serve purpose. another pools of in enriched gallons Once near to and and over and Eddy to Eddy Cavern potash production shaft we higher pool extracting higher the contribute The while brine, key as in brine including already Eddy million throughout crucial to the build these beyond. access. will second other This that HB, longer targets is driving extracting for the the that Cavern the at project 'XX, finish we're on as brine. estimated which larger develop HB. One contain term, into keep high-grade XXXX comment to next well Shaft brine look injecting will brine we projects able Cavern is XXX extraction replacement and X term Cavern system, sources additional brine in this and brine an they of pools. the sustained the With medium brine entire the pool can't for the the pool production brine Eddy serve final IPXXB, let

on potash tons seen Moving our XX of average to asset, the to most Moab, which XXX,XXX consistent annual for years. production XXX,XXX approximately an past has

mine at course XXXX. The summer. substantial X provided X of ore will which had projects X Potash decade. workings Potash in created expected to us more is Over over as and primary brine are injection Bed we've Cavern impacts highlight through Moab, supplement production our project brand-new X They the key to commissioned XX to least at all the X our well contributions in project, the as in XXXX, for old X, Cavern Caverns were next Bed of the which modest XXXX Well target or X. and into X

to consistent for with Cavern at Given X, the and production in new of consistency our with pretty production completely historic remain ore expect upsell. we levels Moab Moab, room

seeing compounded key years with increase call Lastly, on production the production storage. weather of improving annual are commenced beginning expect is the on new potash To the the ahead. well evaporate, that in our over pond. look and the can brine continue a been in this, summer new confident we our of the construction high on store a we recently primary the make those recent we historical end production. forward XXXX. Overall, multiple our by to will returning quarters. I'll This which operation, early range and XXXX now market we track lack negatively potash our is as Please amount to of to our project to updating start mitigate way impact we is help smallest of at and primary our in has we're to to which to our go impacted pond to commissioned we Wendover, potash Matt. brine being positive be turn back projects The upcoming events in progress of by

Matt Preston

price sales QX EBITDA we pricing. Trio Thanks, million $XXX of this million. net Weighing XXXX. $X.X of third per for loss XX% ton down quarter's $XXX In with to and $X.X In net again potash quarter, Bob. QX, ton, figures per and generated our adjusted the realized roughly lower on was adjusted and compared both respectively, results of averaged

#X strong cost unit and As economics To year, by term. That near higher the our to increases headwinds that returning said, costs while for for have sales we economics, this since are fertilizer will volumes higher Intrepid. priority pricing for what improving approximately highlight of XXX,XXX improve call potash earnings seen annual for modest in ton carrying our our XX% Bob means our can production our XX%. our as remained mean Trio to margins by elevated noted, as and unit production last the quite production to estimate be per tons remains has pricing potash well proving our lower

X markets X increase an throughout totaled quarter year, Moving selling compared tons, sales just XX,XXX to prior strong into represent potash, period. respectively, agricultural last In versus take pricing while and volumes with of tons the XX% to on to possible. first when being QX year, months months our third XXX,XXX and volume first we flat we've under segment of the from the highlights. more also premium advantage feed We've ensure customers seen and year the demand been volumes

of guidance XXXX totaled in third our calendar lower production tons. now our XX% and XX,XXX we potash tons, to expect Our production come XXX,XXX than year about previous quarter

quarter to the the of months to mill. first back the we to second range tonnes produced slightly the unplanned quarter, X expected. In of outlook, realized higher net to totaled than our pricing compared sales the we likely As This tons roughly flat of previously and in which at we tons, ton. XX,XXX in did XXX,XXX QX guidance XX,XXX $XXX third the potash volume respectively, volumes our mining average and prior during prior per we XX,XXX price volumes tons be few $XXX Trio, compares in XX,XXX same for at implies with we year experience the to the half sales midpoint and in gave coming underground a year, fourth sales expect at months the In XX,XXX periods. downtime range an and XXX,XXX but

While these we downtime in new gains. from QX higher continuous miners, efficiencies achieved the the offset

our effect revenue of As was fourth range modest in at be to gross lower primary which goods at Partially XX,XXX ton. implies sold. to a second with higher price surface right of in quarterly Trio volumes the net line. In our per lower sales guidance also range Solutions, the QX sales previous was our in in of realized the cost This expect of third-party half $XXX an lower pricing Oilfield agreement for of end use the figure. increase offsetting quarter outlook, in fewer net we sales water sales $XXX water, revenue volumes average in XX,XXX being to the driver of margin the with the upper tons resulted the

effectively earnings what key expect the on be managing XXXX, now compress compared ahead Lastly, on our and sheet Q&A potash on our portion the $XXX execute position. the -- will return liquidity and while we as projects that trailing same. production strong to liquidity ready the while capital At decrease we're Investing of remain allocation, continue we to working historical priorities of as call. we totaled of strong our October, balance focused while spring capital remain to our maintaining end million, highs season. Operator, fertilizer for to a our will

Operator

first Instructions] of Spector [Operator the line question comes with Joshua Our from UBS.

Christopher Perrella

in With range. What's of for What I know to end impacts production? all is Christopher projects outlook the be Perrella produce? Josh. longer-term the on back the to you'll your volumes up are on you're year of the for the It's that doing, XXXX goal near-term next get high historical able terms to

Robert Jornayvaz

do to want you that? Matt, take

Matt Preston

ponds we'll see brine, for we Thanks Shaft give calendar summary, Eddy on in we in a the to start effects XXXX brine we back Sure. question, high-grade to see quick year-over-year and nice our of Chris, just mean, Christopher. but that the yet, not think Moab XXXX. and certainly high-grade we the continuing bump of season. the harvest completed kind into started continue to guidance effects that 'XX production half just We're of we're the year the to 'XX, ready pull now, as get of 'XX right projects see the this summer of I

ready the take we a So there but given variability in weather tons and into put evaporation not towards to think we'll season. forward we move next a step the evaporation, number XXX,XXX as certainly yet, big out that

Christopher Perrella

year? rates of tons. higher do XXX and the in to As half rates a given Eddy, here think or about sized potential as about or Does kt I next you potash of higher go the follow-up, is from XX incremental potash that where production And production that product XXXX? hit costs

Matt Preston

Yes.

every our mill. far evaporation expect into month That -- our a our we'll for 'XX this half potash mill our portions XXXX, fall start a as caverns, HB ponds HB higher see the feedstock and season. of excuse into just as from in with as harvesting put so be general the XXX,XXX a will to will brine the tons of XX,XXX grade of mine mixed me, in much higher-grade potash 'XX brine of feed increase -- we'll So which there, already it our other we we We'll into be hitting of mill.

is we'll ponds of of kind grade at of which the say kind what all see 'XX benefit 'XX variable the and throughout in season. can't be the way but exact fall so the harvest times and 'XX, in that timing we're will And of certain

Christopher Perrella

All right. And follow-up then X quick Trio. on

were costs quarter they had from much fourth here? And out all the unplanned in You third in the higher How did the downtime. they? reverse quarter

Matt Preston

right think in We the about Yes. quarter, improvement maybe standpoint see quarter, we From range. marginal I into the ton. anywhere certainly in X% were some think fourth ton a cost -- third in the we'll $XXX per per

cost and so weighted take our We that have some over pretty in COGS. average Trio of kind to time turn of inventory big a does

see So you the that the in but improvement immediately incremental in we'll fourth third quarter. QX, some impact see to quarter won't we compared think

Operator

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

Joel Jackson

A has years I've of of seems It do really care gone questions at relative few few Trio explain time. of any value a prior that for noticed you percentage I'll been X kind maybe few of Does potash from different last the trade and than more me. Trio's like Can cycles? in the been have price last potash when value years, maybe like relatively as quite like prices kind the Trio, sort potash stable, sense? make a to together. years, the volatile. it's Trio wise together for that of

Robert Jornayvaz

take Zach, first? do you to a that want stab at

Zachry Adams

question, the for Thanks Yes. Joel.

I to our higher think point sales. year part And could over that our been markets. of Trio a have sales today for carry certainly last higher international domestic the typically those percentage related than a price and be

what could be sales closer it domestic markets seeing of well. as all to as that being you're So to there far potash our related as with tracking potash

Joel Jackson

Okay.

get a sales potash Now expansions operational to with to if all big improvements. you goal get the so have doing you're XXX,XXX a chunk, you can

think about of Or distance Like get you the XXX,XXX, line for If you to improvement, say get goal way the the can can we cost do you we think XX% to you get 'XX? can chunk what should you it? a XX% half big towards what costs? do in

Matt Preston

so grade project Moab shaft so strong Yes. the good said, say. into Obviously, Eddy our far. from it's far. seen And We've hard I out pulling Joel, to certainly It's been brine has the the we're ponds. results like really very some

we we here take expectations kind when benefits think pump range. it early midpoint. cost get and in IPXXB, the I extraction season. full can XXX,XXX-ton those out to no replacement that 'XX And and to the being kind then as back continue well get the of then decreasing If out have of of of said, there, for of to XX% the we're kind towards the half XX% we'll halfway start summer. That 'XX, pumping towards of that spring that just the We

Joel Jackson

up questions going extra earnings Okay. definitely [indiscernible] A seen tons. some globally million the potash supply lot your to tons and lot can an who's what a over [indiscernible] X last X do X, your about Then can the boost of demand you've potash I of expectations and X, week mean and to constraints. X, really the for peers, of what season peers people Russia X, Belarus 'XX million do around logistics CapEx with now

right a obviously You're but do open FSU? lost see exports excited of the strength maybe market, supply, anything in making anything now a the talk North you you market you the list and months And smaller based last come Are are demand, seeing on you more -- prices. in outlook question. river you I about how see the about very broad potash? America, couple in How in year? next more player nutrient for from the the seeing question the and Anything want within you

Robert Jornayvaz

Joel, question. thanks for the

story. earnings previous calls, heard I the think the you've same

robust We values. expect at these demand, pretty a especially

anticipate did why so to color, don't the I if laser-focused robust surprising we a Russia, from the We our historical want We threw they're we're getting we is on ranges. magnitude agree XXXX. add know see out. imports production you robust fertilizer We given of products, you figures imports see demand Zach, of that the end the continue fertilizer somewhat that's of high to but back our in but out demand. any which are to all with seeing Russia there. And

Zachry Adams

echo as we nutrients been just incentivize the maximize only All they I has that obviously, those, Yes, our that. Bob. yields to at markets our Joel, a participate highs growers signs would and see is that the to in into not across the And and crop cattle is and historical provide good grass markets, spring. fall well. we commodity we'll that, application And continue lot prices, geographies processing forage expectation of

good their ground reinvest and And across to the so their really kind well. ranchers markets and see we look in hay grass on of as demand pasture acres as there those

Joel Jackson

Okay.

Finally for that... me,

Robert Jornayvaz

question? Did that very broad answer your

Joel Jackson

the I about was media came it print I put want can Yes, conference to Russian Bob, or your did. words know, talked supply. calls on about in I mouth in into States. -- form, it you these you about what don't whether imports

So Is puts some me question more directionally can guess Oilfield in expectations that from in like to expect expect it from kind and of that on maybe a a business? X 'XX little of should lot Solutions. or we What us business? the takes higher yes, I for 'XX give higher,

Robert Jornayvaz

would -- Mexico. is All say business large of most the majority that centered New that of I business in --

to And very so the gas fundamentals but industry and of oil strong, environment. regulatory the are the navigate continue servicing we

So for more had X example, our ago. [indiscernible] project, permit we're still months have should waiting we that on

navigate continue we to So regulatory of continuing Mexico New the complexity the mark.

guidance based hard have teed go really to give we continue ready really wait on solid it's on to we to and that up number of permitting. just projects that the So

specific specific come So get certain of to permits regulatory will it's to can't we hard answers as guidance when when agencies. out give

of in right now. to life but the New reality excuses, hate Mexico I Southeast that's make So

Joel Jackson

'XX were you 'XX? similar of if base like assume kind you your versus case all about -- or similar like company, similar me business So the would then size kind someone balancing a in of like risks, profitability a asked

Matt Preston

great increase think and selling over I brine the couple We from success look of to to high the kind opportunities Bob Yes. [indiscernible] sales we around mean freshwater start, margin of I business growing that last have project good that we've continue the some mentioned, place and certainly a that's years. XX-pond had Joel. have there to

to a think start. it's It's So place pretty I consistent. good

or on in sell and variabilities, some this see, X large year. do we've fracs particularly talked calls, quarter-to-quarter a about X You we our South past where Ranch

place quarterly of a year fluctuations. start timing perspective, prior from is calendar the But continues it's year of that as sales to consistent cause good with can a some down be so activity strong to variability being there. And and

Operator

We from question [Operator follow-up a with have UBS. Instructions] Joshua Spector

Joshua Spector

the moving here? here there generate Just quick in parts to is one. With incremental EBITDA that you're in fourth the XQ a quarter, expecting all

Matt Preston

Christopher mind you that? [Joshua] incremental mean, rephrasing (sic) do I you what? When maybe say to

Joshua Spector

yes. sorry, I'm

here a I better volumes better and reasonable little little mean looking pricing expectations? a a for with bit maybe fourth mean, coming So the and cost what's I for down sequentially, range quarter EBITDA bit,

Matt Preston

EBITDA. historically from as Yes, We third it we're give had took not to a to a $X.X QX we some just going is far provide expect not in but quarter But certainly, as quarter. of guidance volume quarterly going the to a quarter-to-quarter, low kind pickup increase fourth point, we number sales in the million, there. LCM standpoint I'm and roughly

Joshua Spector

aware The that's for that would onetime be of. about or sequentially I modeling items was maybe fair. this any just okay. I All should you as out looking No, -- -- think call modeling right. other thing profitability

Matt Preston

reiterate, of sales, expect no No, guidance you now. in pricing we items a expect get onetime up bit, QX we'll certainly, kind volumes, there. that kind here of that on given of kind can help there's And and the certainly rough hopefully, we right just I little pick

Operator

would to I remarks. conference session. Jornayvaz question-and-answer like the Bob to back concludes for the turn This closing over

Robert Jornayvaz

interest, Intrepid have appreciate and your I interest want and your thank day. a to thank great and in you, in everyone

Operator

your disconnect everyone, us may call, joining for you lines. you, concludes today. Thank This now our and

Intrepid Potash (IPI) 9 Nov 232023 Q3 Earnings call transcript