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1ST HALF: MOSAIC'S SALES DOWN 10%, EARNINGS OFF 100%
Source: Mosaic news release

To read the entire report, click here.

The Mosaic Company has reported second quarter 2014 net earnings of $248 million, up from $218 million in the first quarter of 2014 and compared to $430 million a year ago. Earnings per diluted share were $0.64 in the quarter compared to $1.01 last year. Notable items negatively impacted earnings by $45 million, or $0.06 per share. Mosaic's net sales in the second quarter of 2014 were $2.4 billion, down from $2.6 billion last year. Operating earnings during the quarter were $403 million, down from $526 million a year ago, as higher phosphate volumes were more than offset by significantly lower realized potash prices.

"Mosaic's business momentum accelerated from the first quarter to the second quarter," said Larry Stranghoener, Interim Chief Executive Officer. "Very strong global demand for phosphates pushed prices higher, while potash demand exceeded even our high expectations.

"We continued to effectively execute our many recent strategic initiatives. We completed our Class A share repurchase agreement, bringing our total shares repurchased to 12 percent of our 2013 year-end shares. In addition, the integration of the former CF Industries phosphate business in Central Florida is proceeding well, and we are progressing toward completion of the acquisition of ADM's fertilizer distribution business in Brazil. Our work to generate cost savings of $500 million dollars over the next five years is also proceeding well, ensuring Mosaic remains a low-cost producer."

The Company also announced that Jim Prokopanko will return from a previously announced medical leave and resume his duties as President and Chief Executive Officer on August 4, 2014. Mr. Stranghoener, who has announced his intention to retire at the end of 2014, will serve as Executive Vice President-Strategy and Business Development.

Cash flow provided by operating activities in the second quarter of 2014 was $796 million compared to $982 million in the prior year. Second quarter 2014 cash flows reflect strong sales volumes and declining working capital levels. Capital expenditures totaled $214 million in the quarter. Net cash returned to shareholders was $550 million and cash used in other investing activities was $146 million, resulting in total cash and cash equivalents of $2.4 billion and long-term debt of $3.0 billion as of June 30, 2014.

Business Highlights

  • Mosaic's growth projects continued to progress as planned:

    • The Esterhazy K3 mine development continues on time and on budget, with both shafts more than 1500 feet below surface.
    • MicroEssentials expansion at the New Wales facility is progressing according to plan.
    • The Ma'aden phosphate joint venture secured $5 billion of project financing.
    • CF Industries' phosphate business integration is on track to achieve $40 to $50 million in annual pre-tax synergies in 2015.
    • The Company received anti-trust regulatory clearance in Brazil for the previously announced acquisition of Archer Daniels Midland's fertilizer distribution business in Brazil and Paraguay.

  • Mosaic also made significant progress on optimizing its portfolio of assets:

    • The Company announced the decision to permanently stop MOP production at the Carlsbad, New Mexico, potash mine while continuing to produce its premium K-Mag product there.
    • Mosaic sold its decommissioned potash mine in Hersey, Michigan, and expects to sell the distribution business in Argentina during the second half of 2014.
    • The Company established a date to cease operations in Chile.

  • Mosaic continued to execute on an enterprise-wide initiative focused on achieving $500 million in annual operating cost savings over the next five years, in alignment with a goal first communicated in October of 2013.
  • The Company's reportable injury frequency rate in the second quarter of 2014 improved by almost 15 percent over record setting results in the same period last year.
  • Mosaic finished the repurchase of 52 million shares, or 12 percent of year-end 2013 shares outstanding, at an average price of $47.13.


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