Since the Company announced its calendar third quarter guidance on July
16, 2013, domestic and international crop nutrient markets have softened
in part as a result of the distributors' cautiousness caused by the
Belarusian Potash Company (BPC) break-up.
"The long-term positive outlook for crop nutrient demand has not
changed; high commodity prices are driving record farm returns and
making our products more affordable than ever before. These strong
fundamentals are expected to drive near record global phosphate and
potash shipments in calendar 2013," said Jim Prokopanko, President and
Chief Executive Officer. "In the short term, however, dealers are
cautious and are deferring purchases. As a result, we have lowered our
price and volume guidance for both the Potash and Phosphates segments
for the third calendar quarter of 2013."
In Potash, the revised quarterly guidance range of 1.45 to 1.65 million
tonnes reflects lower near-term demand. The Company's realized price
expectations are now in the range of $330 to $340 per tonne, net of
transportation and other distribution costs. The Potash gross margin
rate is now expected to be in the low to mid 30 percent range.
In Phosphates, distributors' cautious sentiment with respect to potash
is spilling over as buyers are in a wait-and-see mode. The Company has
lowered third calendar quarter 2013 volume guidance to 2.6 to 2.8
million tonnes. Also, third quarter realized prices are now expected to
be in the range of $430 to $440 per tonne, net of transportation and
other distribution costs. The Phosphates gross margin percentage rate is
expected to be in the mid-teens.
Additionally, the Company now expects its effective tax rate for the
seven month transition period to be in the low 20 percent range.
All other guidance is unchanged.
Jim Prokopanko will discuss the updated guidance and the Company's cost
position in more detail when he presents at the Credit Suisse 26th
Annual Chemical and Ag Science Conference at 9:00 a.m. Eastern Daylight
Time on Tuesday, September 17, 2013. The presentation will also be
webcast on the Company's website at www.mosaicco.com/investors.
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 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 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 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; changes in foreign currency and exchange rates;
international trade risks; changes in government policy; changes in
environmental and other governmental regulation, including greenhouse
gas regulation, implementation of the numeric water quality standards
for the discharge of nutrients into Florida waterways or possible
efforts to reduce the flow of excess nutrients into the Mississippi
River basin or the Gulf of Mexico; 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 the Company's processes for managing its strategic
priorities; the ability of the Northern Promise joint venture among
Mosaic, Ma'aden and SABIC to obtain project financing in acceptable
amounts and upon acceptable terms, the future success of current plans
for the joint venture and any future changes in those plans; adverse
weather conditions affecting operations in Central Florida or the
Mississippi River basin or the Gulf Coast of the United States, and
including potential hurricanes, excess 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, or Canadian resources
taxes and royalties; 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, 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.
source: marketwatch
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