Fertilizer firm Mosaic forecasts bigger-than-expected Q4 profit

(Dave Bedard photo)

Reuters — U.S. fertilizer company Mosaic Co. on Monday estimated it would post a larger fourth-quarter profit than expected and surpassed its targets for phosphate sales.

Mosaic, the world’s largest producer of finished phosphate products and North America’s second-biggest potash producer, said it expects to earn 93 to 98 cents per share in the quarter including one-time items (all figures US$). Analysts expected, on average, earnings of 58 cents per share, according to Thomson Reuters I/B/E/S.

Excluding items, earnings for the quarter are expected at around 83 to 88 cents per share, Mosaic said.

Demand for potash and phosphates exceeded the company’s expectations in the period, Mosaic CEO Jim Prokopanko said in a statement.

Retail fertilizer buyers came to market in force to place inventory in position for what they expect to be a strong spring fertilizer application season for farmers, Prokopanko said.

He said he expects strong demand for both crop nutrients to extend into 2015.

The company sold 3.3 million tonnes of phosphate products during the quarter, exceeding its previous guidance of 2.5 million to 2.8 million tonnes, but just shy of the year-ago quarter’s 3.4 million.

Mosaic said potash volumes looked to fall at the high end of its guidance range of two million to 2.3 million tonnes during the fourth quarter, compared to 1.9 million last year.

Canpotex — the export marketing arm for Saskatchewan’s potash-mining fertilizer firms, including Mosaic, PotashCorp and Agrium — last week announced a three-year supply memorandum with China’s Sinofert for at least 1.9 million tonnes of red standard grade potash.

The memorandum gives Sinofert an option to buy up to 800,000 tonnes per year of other grades of Canpotex potash over the three-year term, with pricing to be negotiated every six months based on market conditions.

Mosaic also said Monday its potash and phosphate margins would exceed earlier guidance.

— Reporting for Reuters by Rod Nickel in Winnipeg. Includes files from AGCanada.com Network staff.

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