• Net Income: $169 million for the fourth quarter.
• Adjusted EBITDA: $594 million for the fourth quarter.
• Brazil Adjusted EBITDA: $82 million, with underlying performance adjusted to $120 million after accounting for foreign exchange losses.
• Potash Production: Belle Plaine potash mine achieved a 100% operating rate and record production in 2024.
• Phosphate Production: Expected to reach 7.2 million to 7.6 million tons for the year.
• SG&A Expenses: $497 million in 2024, largely flat compared to $501 million in 2023.
• Cost Reduction Target: $150 million, with $35 million already captured in Brazil.
• Capital Expenditures: Reduced by about $200 million last year, with flat CapEx expected this year.
• Ma'aden Transaction Gain: $522 million gain from exchanging stake in MWSPC joint venture for Ma'aden shares.

• Warning! GuruFocus has detected 5 Warning Signs with XSGO:ENELAM.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Mosaic Co (NYSE:MOS) reported a fourth-quarter net income of $169 million and adjusted EBITDA of $594 million, indicating strong financial performance.
• The Esterhazy potash complex continues to generate strong cash flow and is among the most efficient potash mines globally.
• The company has secured long-term ammonia supply contracts at competitive rates, ensuring reliable supply for phosphate production.
• Mosaic Biosciences doubled revenues and acreage in 2024, with expectations for similar growth in 2025.
• The company is making strategic progress by shedding non-core assets and reallocating capital for better returns, including the pending sale of the Patos de Minas site in Brazil.

Negative Points

• Fourth-quarter phosphate production was lower than expected due to recovery challenges from hurricanes, impacting overall output.
• The company faced a $390 million foreign exchange loss in the fourth quarter, affecting net income and adjusted EBITDA.
• There is uncertainty around Canadian tariffs on potash, which could impact market dynamics and pricing.
• The company experienced operational challenges, including electrical issues at the Esterhazy complex, although these have been resolved.
• Mosaic's cash flow in the fourth quarter was insufficient to cover dividends and CapEx, partly due to production shortfalls and additional costs from weather-related disruptions.

Q & A Highlights

Q: In your press release, you mentioned sacrificing 700,000 tons in 2024 for processed phosphate. How does this impact your 2025 guidance, and what are the expectations for the first and second halves of the year? A: Bruce Bodine, CEO, explained that the 700,000 tons were due to extraordinary events like weather. The phos acid turnarounds, particularly sulfur turnarounds, are back on a three-year cycle. Additional reliability work is being accelerated to ensure the second half of the year operates at maximum capacity.

Q: What other assets might be considered for monetization following the Ma'aden and Patos de Minas transactions? A: Bruce Bodine, CEO, mentioned that every asset is being evaluated for returns. The Carlsbad potash mine is under consideration, and more details will be shared at the Analyst Day. Luciano Siani Pires, CFO, added that they are exploring ways to monetize Ma'aden shares before the lockup period ends.

Q: Can you explain the outlook for global phosphate shipments and the potential impact of your BioPath and PowerCoat products? A: Bruce Bodine, CEO, noted that supply-side limitations are constraining phosphate demand growth. Jenny Wang, EVP Commercial, added that phosphate demand should grow 1-2% annually, but supply constraints have supported prices. BioPath and PowerCoat products can improve phosphate use efficiency, potentially increasing yields.

Q: What could maximum potash production look like if global demand increases? A: Bruce Bodine, CEO, stated that there is limited upside for maximum production due to supply chain constraints. Esterhazy and Belle Plaine are running at full capacity, and Colonsay is used as a swing facility. Jenny Wang, EVP Commercial, added that there are no major spare capacities globally.

Q: How do you view the current CapEx level, and are there opportunities for working capital improvements? A: Luciano Siani Pires, CFO, expressed a desire to reduce sustaining CapEx by $200-300 million over the next few years. Working capital will increase due to business growth, but stronger cash flows are expected in 2026. The Fertilizantes business will continue to consume working capital as it grows.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.