The Mosaic Company Reports First Quarter 2020 Results
Minimal Negative Impacts from COVID-19 Agriculture Deemed Essential Business in Company's Major MarketsStrong Spring Season in North America
TAMPA, FL, May 4, 2020 - The Mosaic Company (NYSE: MOS), reported net sales of $1.8 billion and a year-over-year finished goods sales volume increase of 14 percent. The company reported a net loss of $203 million for the first quarter of 2020, including $295 million of noncash foreign currency losses, which were primarily offset in other comprehensive income on the balance sheet. Adjusted net loss was $21 million, a decrease of $119 million from the prior year, as lower finished goods prices were partially offset by lower phosphate raw material costs and strong sales volumes. The loss per share was $0.54, adjusted loss per share was $0.06 and adjusted EBITDA(1) was $214 million.
Highlights:
- Agriculture has been deemed an essential business in nearly all of Mosaic's key markets, resulting in the prioritizationof logistics and support for agricultural inputs, including fertilizer, in order to ensure food security.
- To date, there have been no material impacts to Mosaic's operating facilities, employees, supply chain and logisticsas a result of COVID-19.•The company's action plans and employee diligence have resulted in only a handful of employee COVID-19 cases,which have been effectively isolated.
- Mosaic continues to support its communities by investing over $1.5 million in local food and medical supply relief.
- Cash flow from operations was $190 million, a $366 million improvement from the year-ago period, as a result ofstronger markets and volumes, and an improved working capital position.In 2020, in addition to cash flow from earnings, the company expects to receive up to $170 million in cash proceeds from tax refunds and the unwinding of an interest rate swap. (1)See “Non-GAAP Financial Measures” for additional information and reconciliation.
- Unrestricted cash totaled $1.1 billion as of March 31, as the company accessed credit facilities and managed working capital to ensure maximum financial flexibility during the current period of economic volatility.
- Sales volumes in all three businesses in the first quarter were higher than one year ago. Sales of potash and phosphate in North America were driven by late-fall applications resulting in strong sales volumes early in the year. Mosaic's Brazilian business recorded its best ever first quarter sales volume.
- The company continues to execute well and make progress toward its 2021 targets.Mosaic Fertilizantes achieved transformational savings of $17 million in the quarter towards its $50 million 2020 target.The cash costs of phosphate rock per tonne in real were R$312, ahead of the 2021 target of R$320.The cash costs of phosphate conversion per tonne were R$309, down from R$321 in 2019, migrating towards its 2021 target of R$275.Potash cash costs of production per tonne, excluding brine costs, were $59, reflecting the accelerated shift of production to Esterhazy K3 and currency benefits, driving costs lower than the 2021 target of $62 per tonne.The Esterhazy K3 mine development project continues to progress, with the third automated miner placed into service in the first quarter.Phosphates' mining delivered cash rock costs of $36 per tonne, better than the $39 per tonne 2021 target, and the best quarterly result in six quarters.
“Mosaic's products are critical to ensuring that the global food supply remains sufficient and we appreciate the efforts of governments, our supply chain partners, our customers and Mosaic's employees to support farmers' needs,” said Joc O’Rourke, President and Chief Executive Officer. "We are all moving forward to capture the opportunity before us: meeting ever-rising demand for food." Cash flow provided by operating activities in the first quarter of 2020 was $190 million, compared to operating cash flow of negative $176 million in 2019 and negative $71 million in the same period of 2018. The first quarter typically reflects a seasonal inventory build that increases working capital. The working capital decrease of $194 million during the first quarter of 2020 primarily reflected significantly stronger sales volumes, up 14 percent from the prior year period, declining company inventories, and diligent management of other working capital items. Capital expenditures totaled $264 million in the quarter, down from $314 million in the prior year period. Mosaic’s total cash and cash equivalents, excluding restricted cash, were $1.1 billion compared with $385 million a year ago, and include $400 million drawn from a $2 billion committed line of credit in March 2020, for the sole purpose of prudently increasing cash-on-hand. During the first quarter, the company also accessed approximately $575 million under short term working capital facilities and reduced outstanding structured payables in Brazil by $241 million. Long-term debt was $4.6 billion as of March 31, 2020.
Media
Ben Pratt
The Mosaic Company
813-775-4206
benjamin.pratt@mosaicco.com
Investors
Laura Gagnon
The Mosaic Company
813-775-4214investor@mosaicco.com