TAMPA, Fla.--(BUSINESS WIRE)--The Mosaic Company (NYSE: MOS) announced today that it will temporarily curtail production at its Esterhazy mine, which when combined with a previously announced potash curtailment, brings total curtailments to up to 600,000 tonnes. The curtailment is not expected to impact the pace of development at the Esterhazy mine K3 project. The increased curtailment is based on increasing inventories as a result of a short-term slowdown in global potash markets and increased risks of a delay in Chinese contract settlement. If the full amount of the curtailment is realized in lower fourth quarter 2019 sales, it would result in a negative impact of approximately $150 million in adjusted EBITDA.
“While near-term fertilizer markets remain challenging, we continue to expect a very strong application season in Brazil and North America, and a better supply and demand balance in 2020,” said President and CEO Joc O’Rourke.
The company plans to provide updated market commentary when it reports earnings, after close November 4, 2019. On August 6, the company provided sensitivity of 2019 adjusted EBITDA for both phosphates and potash price changes.
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.
Mosaic will conduct a conference call on Tuesday, November 5, 2019, at 9:00 a.m. Eastern Time to discuss third quarter 2019 earnings results as well as global markets and trends. Presentation slides and a simultaneous webcast of the conference call may be accessed through Mosaic’s website at www.mosaicco.com/investors. This webcast will be available up to one year from the time of the earnings call.
This press release 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 anticipated benefits of the curtailment of potash production. 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: 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, the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting global operations including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management’s current estimates, reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund 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, sinkholes or releases of hazardous or volatile chemicals; 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.
This press release includes discussion of a Non-GAAP financial measure. Non-GAAP financial measures should not be considered as substitutes for, or superior to, measures of financial performance prepared in accordance with GAAP. In addition, because non-GAAP measures are not determined in accordance with GAAP, they are thus susceptible to varying interpretations and calculations and may not be comparable to other similarly titled measures of other companies. We are not providing U.S. GAAP reconciliation for adjusted EBITDA because we are unable to predict with reasonable certainty our notable items without unreasonable effort.