TORONTO (miningweekly.com) – The world’s largest phosphate fertiliser producer Mosaic has reported a 16% decline in net sales during its second fiscal quarter 2013, driven by lower phosphate and potash volumes and lower phosphate prices.
The Plymouth, Minnesota-based company reported second quarter 2013 net earnings of $629-million, compared with $624-million a year earlier. Earnings per diluted share were $1.47 in the quarter compared with $1.40 last year.
The current year quarter included a $179-million or 42c-a-share benefit from a decrease in the amount of unrecognised tax benefits reported on the balance sheet.
Operating earnings during the quarter were $560-million, down 30% from $797-million a year earlier. The year-over-year decline in operating earnings was primarily driven by lower phosphate volumes and margins.
"Farmers around the world are enjoying outstanding economics, with high commodity prices and relatively low costs for crop nutrients and other inputs. Over the long term, economic and demographic trends are extremely promising for Mosaic," Mosaic CEO Jim Prokopanko said in a statement.
Prokopanko said the company had experienced strong demand and sales in North and South America, underpinned by excellent application seasons.
International shipments, however, were impacted by prolonged contract negotiations in India and China.
“With the settled China contract driving improved sentiment, we believe strong agricultural fundamentals will lead to strengthening crop nutrient markets,” he said.
Mosaic's gross margin for the second quarter was lower, being $676-million or 27% of net sales, compared with $881-million or 29% of net sales a year ago.
Second-quarter operating earnings were $560-million, a decrease of 30% year-over-year, compared with $797-million a year earlier. Lower phosphate volumes and prices, partially offset by lower raw material costs, primarily drove the decreases in gross margin and operating earnings.
Cash flow provided by operating activities in the second quarter of fiscal 2013 was $322-million, compared with $518-million in the prior year. Capital expenditure totalled $394-million in the quarter.
The company said it had $3.4-billion in cash and cash-equivalents at the end of the period and long-term debt was at $1-billion as at November 30, 2012.
The company’s stock traded at $59.73 apiece on the NYSE on Thursday afternoon.