Mosaic’s April Results Point To Rising Cost Of Agricultural Inputs

The Mosaic Company (NYSE: MOS) after the bell yesterday reported its revenue and sales results for the month of April. The results, quite simply, point to the rising cost of agricultural inputs amid continued conflict in Europe.

The company saw significant revenue improvements on a year over year basis in all three segments that it operates in, being Potash, Phosphates, and Mosaic Fertilizantes. Despite the significant revenue improvements, sales volumes were down in two out of three categories, highlighting just how much the price of fertilizers has climbed on an annual basis.

Sales Volumes
(K tonnes)
YoY Change (%)Revenue
YoY Change (%)
Mosaic Fertilizantes64239.87641212.68

The most dramatic increase in revenue was displayed in Mosaic Fertilizantes, which saw volumes climb just under 40%, while revenues climbed 213% to $641 million. Phosphates meanwhile saw a 33% decline in volume yet a 29% increase in revenue, while Potash was subjected to a 7% decline in volume yet a 121% increase in revenue to $438 million.

The company also notes that the figures presented are sales that were recognized during the period, with the figures not reflecting current market conditions “due to the lag between pricing and revenue recognition.” Within the firms first quarter results, which were released earlier this month, realized pricing is said to reflect the current pricing of the market on a 60-75 day lag, which is due to “rail performance.”

Muriate of Potash, or MOP, in the first quarter of 2022 saw an average selling price of $582 per tonne, which at the time represented a 41% increase on a quarter over quarter basis, and an astounding 191% increase on a year over year basis. Yet the company expects a $40 – $60 per tonne increase on that Q1 figure in the second quarter, which the April results have begun to demonstrate.

Diammonium phosphate, or DAP, has seen less substantial increase, but increases nonetheless. In the first quarter, the selling price climbed to $785 per tonne, an increase of 16% over the fourth quarter and 65% over the first quarter of 2021. Pricing in the second quarter for phosphates is meanwhile expected to climb by $140 to $160 per tonne, which begins to explain the rise in revenues in the category despite volumes being cut by a third.

Collectively, the month of April has reportedly seen revenues of $1.6 billion for Mosaic, versus $0.8 billion one year ago. Net sales in the second quarter of 2021 as a whole came in at $2.8 billion – hinting that Mosaic as a whole might see a substantial revenue improvement on a year over year basis as a result of current market conditions.

This, despite rail service in North America still not having returned to pre-pandemic levels.

The Mosaic Company last traded at $59.00 on the NYSE.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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