The Mosaic Company (MOS) 23 Feb 232022 Q4 Earnings call transcript

Good morning. And welcome to The Mosaic Company’s Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants have been in a listen-only mode. After the company completes their prepared remarks, the lines will be open to take your questions.

Your host for today’s call is Paul Massoud, Vice President of Investor Relations and Financial Planning and Analysis of The Mosaic Company. Mr. begin. may you Massoud,

a welcome Financial call. fourth answer also provided questions. Opening and Vice Vice Strategic followed O’Rourke, and Q&A. Global then year Freeland, President, and Clint by and available Jenny XXXX be your President Senior by Officer; Executive earnings comments and Chief will chat to you to and quarter open Chief our President full Joc fireside Officer; Thank Marketing will Senior be Wang,

statements this and as statements on conference forward-looking They statements making subject but are to, and The of based be limited include, and are about to will We expectations during date management’s beliefs are operating significant call. today’s uncertainties. not risks financial future results. and

differ cause reports from the that included from materially Exchange differ materially in Factors results. yesterday Commission. actual our filed published in release to and may the statements could those projected in our with Actual forward-looking are and results results Securities press

non-GAAP will be We also financial presenting measures. certain

Our on these contain press non-GAAP important information data and measures. release also performance

to like to Joc. call over I’d turn the Now

you billion for per of Thank of year $XX.XX. billion, XXXX revenues full of XXXX, our had earnings a morning. Good record earnings call. in EBITDA adjusted $XX and delivering year adjusted $X.X Mosaic joining share

share milestones million In to tons. XX% In from XXXX, our operational Brazil, its X.X from of we we reached to that market benefit us distribution reached allowed capacity several XX%. strong prices. initial grew KX

will in These allowed return total are volumes begun look also MicroEssentials cash capital to us In free which our capacity our balance while North performance have strengthening which discuss to we significant generation, efforts America and at sheet. now XX% later. in shareholders to strong represented we sales XXXX, phosphates, driving flow products expanding of further,

fourth outstanding roughly XX% months, back shares. we XX the billion shares we of we outstanding, shares if XX worth or include of Over bought more $X.X repurchased than of quarter have the XXXX, last the have million

to addition share also repurchases, paid $XXX have investors we nearly dividends. In million in

at the on per long-term up debt November. we with stands regular of share met $X.XX share, $XXX year. of $X.XX And now of target reduction long-term retirement million per billion from in Our $X debt dividend the the balance our sheet, prior

This further, diving discuss to into markets. Before beans our with fertilizer corn remain like near risks pressure agriculture market at XX-year a ratios and bushel. and near Global $X ongoing very that bushel of elevated stocks-to-use a briefly business fundamentals at reflects per disappointing output because concerns are I’d of in December threaten broader Ag under $XX security remain and global production. XXXX. food time lows constructive, November

to watch war in world the The Ukraine. continues

near-term our We particularly share to top impacts, like and will the foreign oils. the sunflowers, wheat military which seems the edible and in have consulted and concern resolved policy with lasting in a who significant that of the amount world’s unlikely be source of of long have production conflict leaders crops is key

will latest Europe, many appears drought which disappoint. safrinha during planting season forecasting. of the In for conditions growing production of are the yields as weather that optimistic, believe crop the the USDA’s suggest pressure we Outside record delayed Brazil, has estimate could Argentinian corn,

some world, in key fertilizer supplied. still many agricultural being despite we Around see the well shortages markets, markets major

some this However, total crop time. will underpin production and the overall still shortage for global threatens prices

Now in half first in in resulted nutrient let’s The year their of soils. the sharp prices on spike the aggressively last mining markets. focus growers fertilizer

are what prices half now enter phosphate of were the and potash at they XXXX, peak. As we

fertilization. to This in maximize seek crop is as with strong still improved XXXX yields growers the seen With to farmer and very XXXX. affordability and demand rebound back prices strong, significantly a sufficient nutrients has suggests for in now levels

readily more Belarus, still of recovery the this supply, X Calais not of believe tons because tons about Belarusian is in world constrained but seeing able XXXX exports were exports remains to ongoing available markets pre-sanctioned down are We modest need. what means in potash. supply their get expect The X short they markets sanctions. of are other million around million volumes. of total to with X we million or XXXX, tons and half export Certain only

producers. been Belarus over marketed we and believe seen actions get driving the we the able some have This winter and prices, product up. is to reverse demand ramps limited of The weakness as been spring recent in seasonally will from aggressively slow has out the country Russian similar but phenomena temporary is has

structural sends In phosphates, the to committed remains where it acid. shift impacting China its phosphoric

down shutting is industrial significant market. for to reasons, now battery uses, being to of addition environmental acid directed the including portion a In production phosphoric

tons be equivalent to exports the finished will of million to fertilizers as to restrictions years the market China’s phosphate XXXX additional This into battery extend will and fertilizer next in continue think X was down Roughly we grow over added. few battery XXXX. capacity of diverted is suggests continue significantly rapidly that as

to Inventory the bottom spring year. the levels the especially up in affordability, across replenish in elevated demand declined a retailers for with the has Russians U.S. prices. prices, inventories, been Americas of reached the the Grower ramping coming volatility from observed we and strong and potash demand of in and because the the but considerably off-season half Belarusians. because phosphates potash second very have in markets key potash been aggressive our we have favorable levels have both of hesitant next believe over is weeks from in marketing global last

normalized to phosphates, growers more attractive worked of and much advantage have has take In as barter their Brazil, ratios. potash down sentiment more improved. both way levels for much Inventories

than of XX have XX% will tons in XXXX, year roughly total from shipments more contracted. We up fertilizer million been estimate already expected shipments XX% last and those

will able meet the its coming as it security whether phosphate India, the of attract for remain year determine product needs imports inventories will low straight ground. elevated concerns. to fertilizer year a be food after the of subsidies very nutrients to In Government went India even most the to

In demand Southeast for which palm potash much as more has should well, recovery. oil Asia, become affordable producers drive

farmer suggest very and economics depleted and potash for strong seeing good Globally, we XXXX. in that inventories demand phosphates are

Given key our during well output but normal phosphates, fourth Florida this earlier to market’s we believe Ian operations month. operations in to this originally moved have is now Hurricane from benefit impacted the are business our issues resources In for operating longer lingering we recovery. positioned levels quarter production. issues returned past dedicating landscape, the that to and from operational fixing believe our expected, the components We than impacted

production at Faustina, we sulfuric from facilities Hurricane the improved after plant And a stops plant are we Bartow, production of operations in acid produced our saw Ian. quarter. saw fourth upgrading increase At our the we ammonia our have significant amount during ammonia the at following recent and

Florida production normal rates. to has returned operating

per X.X During tons realized $XXX the expect first tons pricing X.X of quarter, of to million to per we with ton. million total $XXX ton shipments

We relatively offset expect stable prices prices. lower raw product stripping will margins remain lower finished quarter-over-quarter as material

slower restart XXXX. the In us we think our led production our to business, is Colonsay to first market and at at stop temporarily the expect half within Colonsay temporary situation operations of demand potash current mine, but

tons end in we miner efficient is ton. sales million before prices the first at with that’s it mines is most of tons X.X to to the When of mine expect realized at per world. tons $XXX per million one In MOP ton the quarter, the X the XXth of $XXX additional add the annual of done, at the expected to the of capacity and miner Esterhazy, in will be X year. commissioned At XXth being million service least

billion Mosaic in Fertilizantes the prices results reflect had the purchased the highs the its business the with best half second despite year distribution which of XXXX, in of volatility from of XXXX, in the first reversal the half Fourth of EBITDA and production since we both $X negatively sharp the year. impacted of year, the adjusted commodity quarter margins.

is margins distribution range our in per $XX the year, ton averaged expect. per right would which full we the for ton $XX per $XX to that of ton, But

similar expect within worked full for First be range. our as is through. quarter margins we inventory to back to higher quarter be will distribution normal distribution do But fourth the year, margins

about have capacity our MicroEssentials think our at facility. expansion adding evolution high to the while our to returning of capital continue our we begun returning investments offering by Riverview shareholders. of we phosphates, we As business, execute In

year. sales with of two be expected by completed end is be budget project will XX% not the period years. This $XX less performance about less million than the completion, of of business products. to Upon of value-added is is The American a payback project. phosphate than North Total expensive our an

batteries. step test from verify opens design final are for production plan the commodity America markets North commercial This is up shift building and acid to in a new also for like food in and our production phosphoric operation. We plans away fertilizers next purified

the also are produce We NPKs. to exploring byproducts using plant’s

In to our distribution grow business. Brazil, continue we

are expand. still opportunities is areas there we footprint our While see where already large, to

and ton have We Palmeirante access infrastructure. attractive begun blending rail in the distribution very with million fast growing of to North facility construction a X at

of on an example Returns modest budget, this make highly million $XX expected investments. of XX% another attractive about

past for million, appealing sold In value could we Resort also investments. monetizing because January, we Streamsong We are $XXX our for asset. a realize noncore

Mosaic’s a quarter in dividends They also they earnings venture also by is in $XXX have to from venture well. million, year, Saudi plan about million In joint investment. $XXX XXXX, the investors. of reduce initial joint totaled performing equity Arabia debt $XXX Our is to which This our million. distributed

this received Our proportional million of was month. share $XX

our want reiterate November, we million billion. approach allowed capital we that debt to balance $XXX by retired and debt sheet shareholder returns. to this to $X meet I Finally, and reducing In long-term our to management long-term committed remain us of commitment in

As positioned believe are we long-term. for look today, we balance the sheet at our well we

return million combination to our shares. last Since quarter. back shareholders flow September share year, XXXX, we $X.X see XXXX with continue bought to proceed Similar plan in cash through point, repurchases share and that of of To billion to shares great to substantially a program free all in in a first emphasize dividends. the plan of $XXX and our in we repurchase accelerated value we to we

further also to our dividend count. reduced to share $X.XX and per we share We especially grown with regular have positioned our well are consider growth,

shareholders common to XXth. of special Board paid per dividend, XXth March $X.XX our on be to Directors a addition has on the record of share out dividend of In regular March approved to

our approved a strong ongoing to proceeds with our of payout asset this share Board combined as supplement repurchases. flow, sales, Given cash our the

allow in short Before oilseeds. and on XXXX and is me XXXX. results favorable global we summarize. dynamics to in The delivered Mosaic expect to Q&A, go to record we world grains continue

So yields. farmers to are incented maximize

to We and opportunities. drive that exciting growth and business through our this new expect strong meet is to demand our well positioned demand existing fertilizer assets

are these strong capital returning repurchases. share and flows dividends significant the through that With provide, shareholders cash we to

I’d call. like to that, now on to With the move of portion Q&A the

Joc. Thanks,

have our we the as we Colonsay last more half in we questions Before and potash market earnings call, the address we done we the to of move of we some live little portion to need to most the night. color of Joc, like be past will published on common after provide materials restarted first quarters, you could this would received in XXXX? why on expect a

Thanks, Paul.

have potash ensure to the potash Let by start of and me year. are levels which need this soil depleted we soil had usage, to low yields a add farmers means reasonable will year saying, to

it. So growers they are on economics very are and seeing attractive acting

We is most spring, already got of seeing normal farmer’s North channel has largest customer than things are years. demand which higher is their America like in our for committed XX%

is to move They the want live So everybody last into spring, be with farmer as is going price expectation good, for moment. but don’t we is demand to risk. waiting our the

as we already season they Brazil, we in feel we North good in why it it move to they seeing a but people as America do are wait we long once a expect to fairly season well. good So very moves, expect expect can, and

do potash Overall, being the production. as limited we by see market

exporting expect to is be they tons X which of we X Belarus X.X X pre-sanction. demand in they have million than what tons, million what million less while past, normal, be to will tons million plus and the did So will probably, Russia half export will probably

right temporary a is is have will and us and to of Jenny, starts we expect this we will highlight do potash want when you supply the start market. of today moving, give the hard moving, for we a S&D overall situation to it So standoff bit little think run where now? to the it just

Joc. Sure,

yield. the farm That you XX%. mentioned, the year with market believe to the their constraint, was maximize and markets potash South year, As constructive by incentive supply this go America, farmers very on by driven to the we have North America to potash and declined field all In back last the apply a economics. like

China of like the are production. policies markets and to concerned their the the farmers to to security. full India, local the lot For there maximize support government are they a Therefore,

seen increased believe this last we actually potash going continue. We to China. that, trend have year For demand in is

rebound is constrained. expect So, no full have in we there’s recovery XXXX, just because overall, the to XXXX, the the supply to way back globally, demand to of but

We tons in million are seeing of X tons supply X million this to market. shortage

margin Joc, for about gross the margins in XXXX? investors margin should in that What how Mosaic compression drove Fertilizantes think dropped fourth significantly the quarter. and business

Thanks, Paul.

ammonia. Now are if second cost raw high business, This prices half from working the distribution production it such a and XXXX, materials way we we look first reflects impacted our our production of in as both and business. at half through year. our of our In the the now sulfur reversal

normalized expect distribution, the system. its first the system, move is after more cost those through As high the now inventory get our working margins In to quarter. way through we

of none first up as back in and much prices coming were second year. come have the of the of down this in the surprise because Now, a should half moving half

So, of the year, the market. in distribution were those of we reversed we margins, higher selling made half inventory year, the second higher-priced and the the into in half as first

we business XXXX overall, at successful our it the for look and year, a production and business. was year a over year very Fertilizantes whole very did our business distribution If both record a well, and

revert past ton stripping production raw should to line distribution per our the in will margins materials. we get and historical be we normal $XX through quarter, cost Once well first our of high margins $XX margins ton, work once expectations per to the with

to Joc, how capital production volumes reliability? of think the support over should our investors year initiating what is and about types next Mosaic projects

Thank you.

let Brazil phosphate last our couple say, our in production, circumstances businesses. of and all, impacted been our of that me extraordinary First there years, have the have particularly business some

the at Gulf year, Mexico last hurt directly hit that which last of here limitations the course, First, COVID, then, and operations of has sulfur of shortages the start start in and shutdowns, coming Florida. big transportation of one year, one last our at Louisiana refinery onto out of us the other year, couple hit a of hurricanes,

lingered because damage probably, longer our saw liked, what those Now, from some we was condition the we of plants. that, than of would of have

we them fortify improve occurrence. resilient to how So our are We to doing this what we plants that? to make are of at looking more do type

replaced a overhauled. of new a boilers of some in or Brazil, phosphoric acid acid, And our our that economizers, means converters we being are In have are cetera. bunch et sulfuric we building tank, new tanks sulfur

work really So we plants. a of the are doing lot fortify reinforce these of and to resilience

do instance, supplied is, where have couple the repair of last in highest a Louisiana, over done was we go? What our quarter seen it’s the we ammonia to these which of we Faustina, for than more at have expect where from is in years. already Faustina, been So XX% work

that. think we ahead are of So of all we getting

expect we I XX% in our of that XX-K do to XX% Now value. expect? will that I if I what running forward, look be

in probably X.X the So in our to phosphates tons somewhere range tons business. X million in Brazilian of indicate million tons X.X million that and would

portion call. This our concludes prerecorded the of

to Let’s now move the live Operator? Q&A. on

Thank you. The Byrne go comes today Bank [Operator question from America. of with ahead. first Instructions] Steve Please

Yeah. Thank you.

a to in XX% and Belarus this down of an or for and global of sound really that given need down you spring a impact does think that kind year world do this your result XX% could for where panic a year. is, XXXX down consumption My potash bit Russia demand statistic farmer of on this mentality? of XXXX from following or production Just could another provided, the you up of there question purchasing crop estimates XX% and/or in you on in this Jenny, potash meet be the XX time not maybe there just tons global be as million like

what the let world Steve. start they without a going there me actually over Joc. potash. -- and requested. what’s real seen to But say need see as XX-plus is like will that We hand is Thanks, expect Africa I product million This to happen is tons here need continents believe you we happen it we does need. of and really have Jenny and

shorting So some parts they Central we it some afford Africa and and of even of actually Asia, regions, are can’t America. because

it home, if reality a would the find it is, was and is So there certainly the more would price today. sensitivity potash, as different obviously, be

will We expect bid and drives price major that will the that. be potash markets the that can afford up what

it over to going So to hand little about Jenny just I bit balance. talk that to am a

the reduction XX Sure. believe the your shipment impact Yeah. we over reflected year. the to like impact in Joc. the where for probably year, invested to the application. is yield markets significant in farmers Steve, previous and on tons with might the North that in the of last potash some a question, versus believe markets year of that what We some demand and America Brazil, be Thanks, yield have the million was

for were farmers previous to but not a it two to year, rate, really row application reducing for rate for market cut of they believe a and farmers just the a in production. Therefore, maximize the in probably the they in afford decision is good In maximize their the their have able recovery to the to are year, we there. for years the production. incentive this demand It’s potash yield demand

really secure believe are are farmers prerecorded their the There the into answer, use getting to support government as security XXXX. in food continue that supporting are to and markets, potash in we as we government certain to I are order mentioned going

clear America, North farmers in to on potash, economics what the or and those year. the the farm apply particular, affordability last for especially Steve, heard the our there’s who also spring season based on demand, year last we skipped customers from the that in a very go back a Lastly cut desire to and ground, on the growers rate

with stage cover the the then buying is from retailers the the to at are that, last retailers We need us to engage that we and of see happening. the and farmers their part

the as week, in fact, seeing the we south of increasing U.S. are started. In part inquiries this the season

So we year. with will and it feel last from believe healthy is supply demand the although, a much level, price a confident recover that significant at we potash on to for moderated constraint is stay more going still

Yeah.

of Colonsay. the Okay. And because this, well, you just let add as me Steve, question asked

will as comes One of Colonsay there’s Colonsay. we good demand restart the likely half that needed of year for back, think the we a of believe first the reasons in be case the

in So is hot is it labor standby. ready. there. Everybody The is

if expect we we it, it as we Now need will won’t it, don’t if need likely might -- it. up. that it come we be the But see the and is come case do

question next The Citi. with P.J. Please ahead. comes go Juvekar from

maybe Yes. are mentioned ton million X that the in Is the of the world. there have is do you battery and other market? and any China goes fertilizer grows the LFP think, future into product Joc, you Is talking What equivalent battery you expectations that into I of equivalent are as in Difficulty] [Technical that that DAP that about? your that, market. parts going

Thanks, P.J. Yeah.

my Just make right. this checking But, have equivalency so, your is I correct. numbers sure to yes,

be tons last seeing fertilizers X.X or we about redirected from to We phosphoric are of batteries. year million acid saw purified

to about DAP. equivalent is that ton million X Now of

year. And growth of was we last are seeing one market, at over a in year doubling what virtually least that it

to toX.X of to XXX,XXX getting So see equivalent equivalents million we heck phosphates of million equivalents out are that if of out have China. X equivalent, lot from displaced we going even X to goes million not a -- a gone and

for our So we is confident feel reasonable. that’s fairly that the reason expectation exports

this are stage. not In market we terms supplying our that of own, any at of

a We are now. of study pilot the in doing process

economic months the saying are phosphoric an purified the will about and we to be done that doing We tabletop the and and I a design our to making criteria decision work this be -- and would or for costing so now about talking plant the in get pilot after we have next own that. acid six expect more

comes Please Christopher ahead. Parkinson with The next question from go Mizuho.

Thank so much. you Great.

first so the that sulfur slide to outline helpful the potential ammonia, speak of The on a given year-on-year so DAP, well all as way You benefits have you your you as sensitivities just average in XX, trending price. see MOP, three Can half. and forth. the on from sources to the of

much. pertains Just color any DAP it to your Thank that on as so margins? you

Sorry. Chris. Thanks,

the sulfur that could a which this probably what a activity, little demand got is, are refinery making I out year input asking the are have is, think, you looser. again, better tighten I we lot, an is stripping we seeing to is price. seeing in up of supply is And sensitivity a you leading how if think margin sets to but prices, and will. sulfur we what DAP I of again, if the are for that if market increase goes what is, But right itself with sort expect

in is course, decline of the And gas of natural the and nitrogen that of the down in inputs. price here natural also gas, then seeing in Europe and ammonia, gas natural big our on price what driving we U.S. a are is price driving price of the of down

expectation have to and is $XXX really prices that now much down for I where it in production can’t while will to flatten, range and close start you seeing will down you lower it’s urea a got that or then think decrease slow will go continue that our then probably that we getting are So so continue that than flattening and again.

the happen actually we we year, over be for expect expect met, a quite margins other stripping price the and drop versa. because to drop in will So In of any to that us. be in -- materials flat going words, vice and raw that are

go ahead. Please comes Samuelson Goldman The next question with Adam from Sachs.

Good clarify last you. point margins. to stripping Joc, Yes. on morning, that Maybe, phosphate just Thank everyone.

you margin -- ship, sit and heard bit growing that margins tons in in implication just of in first distribution and EBITDA phosphate? or would in you weakness the -- here XXXX was to that, in plan How margins you if EBIT clarification fourth the of then the question had thereafter, is So X.X to on -- I to will that with more And I again, is the as a heard of X tons similar want second from million current today be then product the able would million are stripping your I the you think kind flat think, between the in the sure upstream similar quarter businesses Fertilizantes quarter a perspective both the phosphate make just in just look the just first that quarter. drivers I normalizing production, before a the right?

Yeah.

Okay.

So first I one which was, Yeah. to Oh! will here, the read. just answer got sorry, I

Yeah. volume. Our

unreasonable Our volume, -- question our I an for in think, were. is The not to was that’s expectation respect capabilities volume. production what

by qualify our necessarily So always our what will capabilities -- the for our ground what and we production is and driven not that that demand I are. are product on the say

be could our demand production and sales, for Likely, will expect but phosphate there potash what are So we this gap in be that capabilities a our good. between both depend. year, will

what most expect make. So to of we sell we

an that’s So not unreasonable assumption.

stripping and expectation In relatively case the flat balance and But terms will. is that margin, up season gets with up least kind if should lot, think but will potash move it as that, in the certainly somewhat, we in yeah, a could our at a phosphates of potash, both the of expect prices you phosphates. I move phosphates off pricing, moving, of

So where that would go. of that’s our prediction basic

the business just the the by of third-party distribution versus impacted. costs rising and timing One, material other and sales terms that, In the purchases would business been of equally of have material. I raw production Brazil, by say both

normalized in So, it quarter with of level you to more back think that after mind, as one. can returning

next comes Fargo. The Garchitorena question Please Wells ahead. from go with Richard

Thanks.

going outlook be guess on initially when Colonsay. you guess, of on when how thinking it was it back run a market further, capacity, to we I we assuming guess, are moving take restart to will when long shut. planning terms start I is it X.X more touch you intentionally that expanding forward where of ago is for And probably to recover plans to XXXX at that in recovers? that, expand year to the million to wanted were Just have about you get you the were the how demand I look up, then you rate or when hold event, and

Yeah. the That the we the look first it, the the in Thanks, third quarter let’s would so fourth half we down of slowed were, significantly to at at volumes and the I’d is, less year. way expect. was rate expected middle they of Colonsay the Richard. would quarter, than what the Look, year and when continue call which

So reasonably we shutdown Colonsay.

I shut go. the have like said have still we Now it down. everything to We employees. ready We earlier, still

in slowdown, have take what’s doesn’t and be that time much it that have But So to new two restart. add happened since the to been meantime because the miners added at is, has we to considered able of we Esterhazy.

So have very soon, tons. million X Esterhazy will an incremental capacity of

tons going to to million X.X-ish we it rate Colonsay X seem me of are Esterhazy, the mill second of at run the need doesn’t plus add million you if ton So Colonsay. that

demand of fact, Esterhazy think, be need because slack. would say a would the they down, colons So matter taking weights, that I I the the that hold. up that, generally, could be would And of on later the longer

comes Stanley. with Vincent question next go Morgan Please The from Andrews ahead.

you I of I the because whether assuming and which view mouth right season, you we it to seems Thank And you, talk like U.S. just sort everyone. the fill and is am now. you all curious that running just and Joc, get this end spring year and volumetrically after morning, the terms good whether want everybody can’t be presumably anticipate to hand summer that. tell is just seasonality of we to going you bins chain into to of maybe going they empty strong. then have inventory through and to what sort do supply of be there? back supply think phase about having the chain how so sort sort of quite year, could is we of the in the have going levels are shape mouth the or entering get your are of hand of to as restocking go a normal there’s spring as are to Do thoughts you to

Thanks, Yeah. the will. people with people, with Look, now long, right waiting of front I very in are volatility think if you concerned that, Vincent. very

and time. the need have So season. they is course, in for dealers always the that But, customers with everything product our sure to of just in the make they time to need balance get

the balance. that’s So always

or and and in like expectation at -- the My we our product we a and two Fertilizer the Institute every for to we still season. are what week I of position hearing ago, have were customer, start would -- to almost meeting the Jenny position

to until then we going we not want refill empty. are to end season need We the and it

So expectation, do. that what here the program North that’s they that will summer that’s America. in strong But means fill be should also our

Safrinha we our will at In it the lead year to being everything, third and like here, quarter throughout strongest be see least. think the are signals long market -- the I normal we the demand pattern think we will for stable Brazil, I strong the a that quarter more and season be little of have Brazil even will different the than of said and time some starting pretty see because

potash the year is, they they products the all need see we expect with be because Asia, So to that at haven’t ramp America, think have the We they just we and continue. will has Indonesia pretty and then we used to China, up got where India, think the got point, need. we a Central And to going third U.S. the to Malaysia, have expect that you will to see one consider normal fill. quarter some

buy. they are they are if to not even going So to have refilling,

next Rodriguez ahead. from comes Please Suisse. Credit The question go with Edlain

Yeah. Good Thank morning, you. guys.

a affordability. declined the several farmers as a past quite prices So months. on It quick improved fertilizer question bit over has

good But you for bring if farmers. do, moving prices is doesn’t the that back issue your for to for they start good what’s that’s higher. fertilizer But So affordability again.

So you to how question is balance my line? like do try that delicate

will. Yeah. was Edlain, stay try and in this reasonable while the that troughs last spikes global in a a what economics in and year that challenge for we what buying, you and saw is big us to see we the the sure and that panic start good, commodity make of are market year the we you sit if farmer

was buying. everybody So

farmer product. well, awfully recognize were expensive, and getting very economics about the that’s worried last weren’t They the year, And then farmer their said, bad.

a took piece psychological the So toll.

fear get farmer does hurt wait year to and product, spike [Technical -- where another are again. resistant to suddenly, the what affordability buying actually My said, you is people point to product rush to price Difficulty] somewhat they is hurt your this that which fertilizer there’s

will you are see going I for we to agricultural if to year, get yield to But see you say, year one see away commodities. start drops, the just and with yield are drops, to second the underlying start going you

this if self-correcting don’t the is is really commodities up, So I think go the they yield [Technical use which year, which to Difficulty] product will demand. it’s drive going

and get I people can’t enough affordability in through you and a Hopefully, think reasonable. stays buy farmer early control we rational So it. fairly way

Please comes question from Josh The with next go Spector UBS. ahead.

the markets an to point we for But where Yeah. are up maybe still specifically Hi. more that’s not if earlier to at Thanks region is ton Asia, I and range or my sensitive mean, for just a about talking expect ton, prices it’s terms to $XXX we still point to today you that’s a there issue a around, $XX you and that wanted Africa, are move are buying to where questionable? question that’s at a of et when Are up buy point a going to where or similar were the taking see be the with to still that going attractive price question. affordability. cetera. return you point follow an potash in said I prior on

Yeah. Thanks, Josh.

around where Look, you fertilizer the vast and if is for majority used and -- depends export big where -- you fertilizers crops crops. are as we on really buying looking. are look think, of world, the it for I

your So where and if international crop an you the fine into are the you selling are there. price, you then will international market be demand get can

of think fine. if Yeah, you America, et Europe, South America, about North cetera. So that’s all most

not they an If is the and afford feed are they it case, buying you still can’t no, international would it’s the Africa, because about selling for buying subsistence reason, think in the are themselves. into market, farming problem they in for Africa Africa say, to I

put it how where Difficulty] [Technical acute. crop high irrelevant, the to being call of hunger to or State up hunger is moving crop heard gap have the not U.S. Africa most acute, from, what we starvation now says And from are into and the almost because you they that whether it, into much are for have instance, Department, So supply that’s prices parts ends which it’s from basically.

So think, world, I get poorest the the in if Asia, you of no. afford it to yes, they will be able parts to but

those of tragic are the first Now but that’s Not most the thing. really, market? big in that probably overall not whole this the affect because place, users part does

go with The CIBC. Jacob next Bout Please question is from ahead.

Esterhazy. morning. go mine on and by to back If Esterhazy Colonsay your discussion to lowest far. Good cost am is potash I mistaken, wanted I that

there wouldn’t Just should about a from or mill be anything bringing the hoist we from next coming that perspective Is why capacity? or thinking incremental be Esterhazy. incremental ton on

and on to Yeah. back Jacob, have good Thanks, call. you the Yeah.

correct. gives comes far mine. miner at can and think capacity exactly is it you Your limit. in, operate or least And our as, approximately cheapest Esterhazy each comments by new there us are expensive that this new of no XXX,XXX-ish is to tons about

about it, see X of bringing we limit at that the the have we about hoist talked will we on we incremental plant be As on. capacity tons expect limited and million no

limited So Plaine we and use Belle at the let’s and yeah, of required. then only call use the and from then stage, we will and to end be year, Esterhazy as first that Esterhazy, it, tons plant maximize middle Colonsay this will by,

go Wong Andrew next The from Markets. ahead. comes with Capital RBC question Please

Thanks question. morning. LFP. the I back to want taking for Good just Hey. go to

they with a that of need rock plants they appreciate rock do the you early produce have costs view what acid doing here, be to for LFP of of do that is Thanks. announced would any projects to what’s your LFP a to that a need different have would kind would but today maybe a Mosaic and for type upgrades curious like, that will domestic do current and the of testing or happen kind you seen I to in I this required purified you on phos U.S. and thoughts, processing what batteries, some involve? bit recently or kind what are you little given if pilot We am of opportunity like, the couple initial were

Andrew. So, thanks,

phase Let definitively, I are grades and me say, we for the tell capable making you that we of fairly of have the can purified been testing in phosphoric acid batteries. required

is you those, those iron with being the LFP and there we talked some of And number discussions. nondisclosures of each here. are for obviously, U.S. plants of there’s discussion a phosphate And of as sets about said, in in lithium

talk So I won’t about specifics.

of stuff the supply But I those there. you, to these that a have desire stable is secondly, amongst out supply be to there subsidies one, can shorter a tell content and of U.S., and a lot i.e., the require more huge a chain battery manufacturers U.S. chain,

least and of now a be. design reasons the there’s in capital So of number will that. is this, us us the doing very interested the operating is on are why market going costs both And define what help work at tell give with conjunction us which pilot in doing we to criteria, the what

we size uses industrial in food market at But purified But could be remember, the America other and acid, studies think everything there’s market of here also the North are what in time, about particular. to phosphoric we else. final this the as doing same and understand

be quite to could extent. a for branch useful to us de-commoditize this some So

The next go from Jeff question Please is ahead. Zekauskas with JPMorgan.

a prices are you ammonia for ammonia facilities in working in of plus the the capital cost future in being that with happy And proposed the you With does XXXX. make it roughly fertilizer of Thanks Gulf coming should source cash with Coast, $XXX are more different got? much. secondly, million in, very all have buy or be to sense what

Jeff. Thanks, Yeah.

question. -- the your these hit missed -- I me first of Let two in terms

Sorry, I got...

capital. Working

Yeah. Working capital. Oh!

our we depending going system to priced that definitely the be what pricing, now. assumptions, clearly, going pretty final You working the some assume capital. some work product way coming And into you on -- depending is your are to from cash high through on for there’s right

So in down other go should words, needs with our working price capital obviously.

I price third-party at look working I been to product. our capital this all of If almost think, the has due year,

hasn’t that’s for the changed, that’s volumes value and significantly of product, for but not inventory changed So third-party of product. produced the that purchase has inventory our

as CF contract But done renegotiate this we to an have In that, I head of had us the CF which terms given that -- contract, our hit said are it. is terms have I with has if notice they of where we eight-year would well. CF. going we the with was want that, think, on ammonia, you not have exactly they in probably

plus think it type high look with forward. it’s our I different ours interest a the that hedging maybe formula. there’s be volume ways price part Now as needs cost but be we both or might in think for at ammonia our a to as worth of contract, is how won’t ammonia past it a we done contract relook in I and going at CF’s have But that and

that market. OCI into and and others obviously, come that like whatnot So have, there’s

So pretty do what a forward. position we for in bargaining ourselves good see we going

Markets. Capital question last with from ahead. Joel Please Jackson comes BMO The go

Hi, Joc. Good morning.

obviously, around more We QX. bit big your reduction will see in some color Brazil ask I about understand you to margins, next wanted to a a week. of margin

the I because, the in expect you and is there the across we historical QX higher don’t improving give What margins you synergies. the by should optimization that assets when asset, improve to in commodity some and really and you went think more But said, year. historical with margins similar a bought changed, Can you, know have of bit think, the a I Fertilizante margin. the or of anymore is expect Fertilizante? say back in you what end I work up you to color, improve you average year obviously, to Belle did prices, you margins mix margins the lot

Joel. Yeah. Thanks,

really distribution in So, the $XX look say, historically, me ton. we somewhere per distribution up to were have time, margins, ended let margins and $XX at ton if about we specifically they talking the that over per

phosphate production business, Now But a start. of look at not if much that’s the distribution price the obviously, more dependent. and bad I to business, place potash

into and at one terms product two. how the until we this play quarter today’s are sold buying that we quarter end of but won’t In out, of expect be price, to now product

our there’s we product were months. is from because Brazil the that in let’s way that higher-priced call big So of, it, that through lag the at four purchasing product are working quarter we three stage,

similar of $XX were margins of to do expect we misunderstood were expect said what when be to average build still going to same to them have the the they but quarter to in be the they four, I range year, in So particularly margins, over I that we over may $XX. year, distribution been

will. means rebound fully fairly they expect and they we quickly that So have to

session. would O’Rourke for Joc conference question-and-answer like remarks. concludes the This our back I to any closing to turn over

delivered is and everyone So, interest just your I’d conclude yield strong our we parts To Mosaic messages. and in key have to in many supply throughout and you of business your call, reiterate thank conditions results fertilizer incentives XXXX XXXX, maximize in globe the expect around our in record us. for to the world. like questions all short strong their farmers

our and customers. is strong demand expect deliver to for we Mosaic this positioned So well

of through share all also and are cash our flow for our returning delivering We repurchases. by dividends essentially shareholders free

that, with happy please So, and and have a joining thank for safe day. our you call

attending now presentation. for conference today’s Thank concluded. you has The

now may disconnect. You