PLYMOUTH, Minn., Sept. 21, 2015 /PRNewswire/ -- In response to
current crop nutrient market conditions, primarily related to
delayed fertilizer purchases in Brazil and North
America, The Mosaic Company (NYSE: MOS) announced today
the Company will reduce production in its Potash business by
extending maintenance downtime at its Colonsay mine, and maintain planned slower
production in its Phosphates business.
Since the Company announced its third quarter guidance on
August 4, 2015, domestic and
international crop nutrient markets have softened. Currency
volatility, lower grain and oilseed prices, political and economic
uncertainty, as well as global equity market declines have
adversely impacted market sentiment.
"The long-term positive outlook for crop nutrient demand has not
changed, but the industry faces some near-term challenges in the
current environment. In these times, we will continue to be
diligent in looking for opportunities to create shareholder value.
It is a time for leadership, and we are managing our production
levels to match current demand, controlling our costs, and
maintaining our discipline," said Joc
O'Rourke, President and Chief Executive Officer.
In light of current market sentiment, volumes are lower than
expected, and prices have weakened. Mosaic's reduced
production is expected to impact per unit costs and segment
margins. As a result, the Company has provided the following
updates to third quarter guidance:
Phosphate volumes are expected to be at the low end of the
previously communicated range of 2.1 to 2.4 million tonnes. The
average DAP selling price is expected to be in the upper half of
our previously provided range of $435 to
$455 per tonne. The Phosphates segment margin rate is
expected to be in the low-twenty percent range as previously
guided.
Potash volumes are expected to be in the bottom half of the
previously communicated range of 1.6 to 2.0 million tonnes. The MOP
average selling price is expected to be in the bottom half of the
previously announced range of $260 to
$280 per tonne. As a result of these developments and lower
operating rates, the Potash segment gross margin rate is now
expected to be in the high teens, compared to prior guidance of the
low- twenty percent range.
International distribution volumes and gross margins remain
unchanged, and are expected to be close to the midpoint of previous
guidance. Volumes are estimated to be in the range of 1.9 to 2.2
million tonnes and gross margins to be in the range of $20 to $26 per tonne.
About The Mosaic Company
The Mosaic
Company is one of the world's leading producers and marketers of
concentrated phosphate and potash crop nutrients. Mosaic is a
single source provider of phosphate and potash fertilizers and feed
ingredients for the global agriculture industry. More information
on the company is available at www.mosaicco.com.
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to, statements about
the Wa'ad Al Shamal Phosphate Company (also known as the Ma'aden
joint venture), the acquisition and assumption of certain related
liabilities of the Florida
phosphate assets of CF Industries, Inc. ("CF") and Mosaic's ammonia
supply agreements with CF; repurchases of stock; other proposed or
pending future transactions or strategic plans and other statements
about future financial and operating results. Such statements are
based upon the current beliefs and expectations of The Mosaic
Company's management and are subject to significant risks and
uncertainties. These risks and uncertainties include but are not
limited to risks and uncertainties arising from the ability of the
Ma'aden joint venture to obtain additional planned funding in
acceptable amounts and upon acceptable terms, the timely
development and commencement of operations of production facilities
in the Kingdom of Saudi Arabia,
the future success of current plans for the Ma'aden joint venture
and any future changes in those plans; difficulties with
realization of the benefits of the long term ammonia supply
agreements with CF, including the risk that the cost savings from
the agreements may not be fully realized or that the price of
natural gas or ammonia changes to a level at which the natural gas
based pricing under one of these agreements becomes disadvantageous
to Mosaic; customer defaults; the effects of Mosaic's decisions to
exit business operations or locations; the predictability and
volatility of, and customer expectations about, agriculture,
fertilizer, raw material, energy and transportation markets that
are subject to competitive and other pressures and economic and
credit market conditions; the level of inventories in the
distribution channels for crop nutrients; the effect of future
product innovations or development of new technologies on demand
for our products; changes in foreign currency and exchange rates;
international trade risks and other risks associated with Mosaic's
international operations and those of joint ventures in which
Mosaic participates, including the risk that protests against
natural resource companies in Peru
extend to or impact the Miski Mayo mine; changes in government
policy; changes in environmental and other governmental regulation,
including expansion of the types and extent of water resources
regulated under federal law, greenhouse gas regulation,
implementation of numeric water quality standards for the discharge
of nutrients into Florida
waterways or efforts to reduce the flow of excess nutrients into
the Mississippi River basin, the Gulf of
Mexico or elsewhere; further developments in judicial or
administrative proceedings, or complaints that Mosaic's operations
are adversely impacting nearby farms, business operations or
properties; difficulties or delays in receiving, increased costs of
or challenges to necessary governmental permits or approvals or
increased financial assurance requirements; resolution of global
tax audit activity; the effectiveness of Mosaic's processes for
managing its strategic priorities; adverse weather conditions
affecting operations in Central
Florida, the Mississippi River basin, the Gulf Coast of
the United States or Canada, and including potential hurricanes,
excess heat, cold, snow, rainfall or drought; actual costs of
various items differing from management's current estimates,
including, among others, asset retirement, environmental
remediation, reclamation or other environmental regulation,
Canadian resources taxes and royalties, or the costs of the Ma'aden
joint venture, its existing or future funding and Mosaic's
commitments in support of such funding; reduction of Mosaic's
available cash and liquidity, and increased leverage, due to its
use of cash and/or available debt capacity to fund share
repurchases, financial assurance requirements and strategic
investments; brine inflows at Mosaic's Esterhazy, Saskatchewan, potash mine or other
potash shaft mines; other accidents and disruptions involving
Mosaic's operations, including potential mine fires, floods,
explosions, seismic events or releases of hazardous or volatile
chemicals; and risks associated with cyber security, including
reputational loss, as well as other risks and uncertainties
reported from time to time in The Mosaic Company's reports filed
with the Securities and Exchange Commission. Actual results may
differ from those set forth in the forward-looking
statements.
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SOURCE The Mosaic Company