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MOSAIC CO (MOS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered net sales of $2.82B, diluted EPS of $0.53, adjusted EPS of $0.45, and adjusted EBITDA of $594M; gross margin rate compressed to 11% vs 18% a year ago, with a notable FX loss partially offset by a $522M gain on the Ma’aden transaction .
  • Phosphates outperformed on price and stripping margins (DAP $593/t), while Potash volumes recovered but pricing remained lower (MOP $199/t); Brazil’s Fertilizantes showed healthy underlying performance despite FX headwinds and structured payables impacts .
  • 2025 guidance calls for Phosphate production of 7.2–7.6Mt, Potash 8.7–9.1Mt, CapEx $1.2–$1.3B, SG&A $470–$500M, and adjusted effective tax rate in the high-20s% (Q1 guidance: DAP $595–$615/t; MOP $200–$220/t) .
  • Management flagged strong 2025 ag fundamentals, tightening phosphate supply, improving potash markets (price momentum since year-end), and accelerated asset reliability investments; capital redeployment continues (Ma’aden shares received; Patos sale pending; Carlsbad review) .

What Went Well and What Went Wrong

What Went Well

  • Phosphate adjusted EBITDA rose to $341M in Q4 (vs $259M prior year) on elevated stripping margins and higher DAP pricing; segment adjusted EBITDA per tonne improved to $210/t (vs $164/t) .
  • Brazil Fertilizantes underlying operating performance was strong; adjusted EBITDA of $82M in Q4 (after ~$35M FX-payables drag) implies ~$120M run-rate as FX effects roll off and cost initiatives scale .
  • Strategic portfolio actions: closed Ma’aden transaction (recorded $522M gain), signed agreement to sell the idled Patos de Minas mine for $125M; ongoing review of Carlsbad potash .
  • Quote: “We delivered our highest quarterly EBITDA of the year with great prospects for all three segments for 2025…” — Bruce Bodine (CEO) .

What Went Wrong

  • FX-driven headwinds: consolidated foreign currency transaction loss of $418.5M in Q4 and $685.8M for 2024; Q4 notable FX/payables reduced Brazil EBITDA (~$35M) .
  • Weather-related disruptions: hurricanes (Helene/Milton) reduced 2024 phosphate production (~700kt) and increased idle/turnaround costs; potash production also impacted earlier in the year .
  • Gross margin rate compressed to 11% in Q4 (from 18% prior year), while net income dropped YoY ($169M vs $365M), reflecting lower prices in potash/Fertilizantes and notable items .
  • Analyst concern: operating cash flow in Q4 (~$219M) did not cover CapEx/dividends due to volume shortfalls and storm-related costs; management expects coverage in 2025 .

Financial Results

MetricQ4 2023 (oldest)Q3 2024Q4 2024 (newest)
Net Sales ($USD Billions)$3.15 $2.81 $2.82
Diluted EPS ($)$1.11 $0.38 $0.53
Adjusted EPS ($)$0.71 $0.34 $0.45
Gross Margin ($USD Millions)$559.5 $416.8 $301.9
Gross Margin Rate (%)18% 15% 11%
Operating Earnings ($USD Millions)$278.5 $115.4 $99.9
Adjusted EBITDA ($USD Millions)$646 $448 $594

Segment performance and key KPIs (Q4 2024 vs Q4 2023):

SegmentNet Sales ($USD Billions)Operating Earnings ($USD Millions)Adjusted EBITDA ($USD Millions)Volume (Mt)Benchmark PriceGM per tonne ($)
Phosphates$1.2 vs $1.1 $44 vs $21 $341 vs $259 1.6 vs 1.6 DAP $593/t vs $552/t $85 vs $88
Potash$0.6 vs $0.8 $123 vs $222 $212 vs $322 2.2 vs 2.6 MOP $199/t vs $243/t $55 vs $99
Fertilizantes$1.1 vs $1.2 $79 vs $50 $82 vs $111 2.2 vs 2.2 Finished $486/t vs $552/t $46 vs $44

Additional quarterly comparatives:

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Billions)$2.82 $2.81 $2.82
Adjusted EBITDA ($USD Millions)$584 $448 $594
Diluted EPS ($)$(0.50) $0.38 $0.53

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Phosphate Sales Volumes (Mt)Q1 2025 vs Q4 2024Q4: 1.6–1.8Mt Q1: 1.5–1.7Mt Lower
DAP FOB Plant Prices ($/t)Q1 2025 vs Q4 2024Q4: $570–$590 Q1: $595–$615 Raised
Potash Sales Volumes (Mt)Q1 2025 vs Q4 2024Q4: 2.2–2.4Mt Q1: 2.0–2.2Mt Lower
MOP FOB Mine Prices ($/t)Q1 2025 vs Q4 2024Q4: $200–$220 Q1: $200–$220 Maintained
Phosphate Production Volumes (Mt)FY 2025 vs FY 2024n/a7.2–7.6Mt New
Potash Production Volumes (Mt)FY 2025 vs FY 2024n/a8.7–9.1Mt New
Total CapEx ($B)FY 2025 vs FY 2024$1.1–$1.2B (FY24) $1.2–$1.3B (FY25) Raised
Depreciation, Depletion & Amortization ($B)FY 2025 vs FY 2024~$1.0B (FY24) $1.1–$1.2B (FY25) Raised
SG&A ($M)FY 2025 vs FY 2024$500–$530M (FY24) $470–$500M (FY25) Lower
Net Interest Expense ($M)FY 2025 vs FY 2024$160–$180M (FY24) $180–$200M (FY25) Raised
Adjusted Effective Tax Rate (%)FY 2025 vs FY 2024Low 30s% (FY24) High 20s% (FY25) Lower

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Asset reliability & weather impactsPhosphate volumes up; cost reductions; projects completed (Riverview; Esterhazy compaction); hurricanes noted Electrical issues at Esterhazy/Colonsay; hurricane recovery; assets returning to full capacity Accelerated reliability investments in FL/LA; production improving through 2025 Improving reliability; ongoing investment
FX/currency impacts (Brazil)FX headwinds in Fertilizantes; distribution margins normalized Bad debt reserve $32M; legal reserves; FX impacts ~$35M EBITDA headwind from FX payables; ~$20M expected in Q1; underlying performance strong Near-term FX drag; run-rate recovery
Cost savings program ($150M)>1/3 run-rate captured; capex reductions On-track; continued reductions ~Half realized; $42M SG&A intrinsic savings; additional digital/mining plans underway Expanding beyond $150M
Potash market/tariffsBalanced market; affordable prices; guidance on volumes/prices Demand recovery; operations at full capacity; Q4 guidance Price momentum since Dec; tariffs likely passed downstream; demand intact Improving pricing; demand resilient
Phosphate markets/stripping marginsTight supply; Chinese exports down; elevated margins Tight through 2025; elevated margins; hurricane impact Tight supply continuing; elevated margins; DAP $595–$615/t guide Sustained strength
Portfolio optimizationProjects complete; biosciences acreage growth CFO transition; Carlsbad review; biosciences expansion Ma’aden closed; Patos sale; Carlsbad strategic alternatives; monetize Ma’aden options Active capital redeployment
Mosaic Biosciences5M acres coverage 9M acres coverage; growth trajectory Doubling revenue/acres; Analyst Day preview Scaling growth engine

Management Commentary

  • “We delivered our highest quarterly EBITDA of the year with great prospects for all three segments for 2025… we see encouraging signs that we will deliver significant volume recovery in phosphates and potash in 2025…” — Bruce Bodine, CEO .
  • “Net income was also impacted by this large… $390M foreign exchange loss in the fourth quarter… reduced the adjusted EBITDA for Brazil by $35M in this quarter…” — Luciano Siani Pires, CFO .
  • “Phosphate markets are expected to remain tight… Stripping margins are expected to remain elevated.” — Mosaic Q4 release .
  • “Sales volumes in Q1 2025 are expected to be… Potash 2.0–2.2Mt… MOP $200–$220/t; Phosphate 1.5–1.7Mt… DAP $595–$615/t.” — Mosaic modeling assumptions .

Q&A Highlights

  • Potash tariffs: Management expects tariffs would be borne by downstream customers; affordability remains intact, minimal demand destruction; price momentum already visible ($40+/t since Dec) with more realized in Q2 due to selling cycle .
  • Brazil FX/payables: Q4 adjusted EBITDA of $82M includes ~$35M FX-payables drag; underlying ~$120M run-rate expected from Q2 onward as cost initiatives and FX effects normalize .
  • CapEx and working capital: 2025 CapEx flat vs 2024 to fix reliability; plan to reduce sustaining CapEx by $200–$300M over next years; working capital build in 2025 with growth (Palmeirante ramp), stronger cash flows expected in H2 and into 2026 .
  • Cash flow coverage: 2024 shortfall driven by volume shortfalls and storm costs; 2025 expected to cover dividends and CapEx with excess cash .
  • Production upside: Potash at full rates (Esterhazy/Belle Plaine); logistics (rail/ports) are primary constraints on major upside beyond top-end of guidance .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, and EBITDA was unavailable due to API request-limit constraints at the time of analysis. Values would generally be compared against S&P Global consensus; please note the unavailability today.
  • Given reported Q4 metrics ($2.82B net sales, $0.45 adjusted EPS, $594M adjusted EBITDA) and management’s 2025 outlook (pricing strength in phosphates, improving potash pricing, cost savings), Street estimates may need to reflect: higher DAP/MOP realized prices, elevated stripping margins, improved phosphate volumes in H2 2025, and SG&A trending to the low end of the $470–$500M range .

Key Takeaways for Investors

  • Phosphate strength persists: tight supply and elevated stripping margins underpin pricing; DAP guided higher in Q1 2025 ($595–$615/t), with volumes recovering through 2025 on reliability work — positive for EBITDA trajectory .
  • Potash bottoming with price momentum: Q1 MOP $200–$220/t guidance; tariffs likely pushed downstream to farmers with limited demand impact; expect better realized pricing in Q2 as cycles catch up — supportive for margins .
  • Brazil’s underlying profitability improving: FX/payables headwinds are transitory; cost initiatives and mine-plan optimization should lift run-rate EBITDA above Q4 levels from Q2 onward .
  • Cost and CapEx discipline: ~50% of $150M savings realized; additional digital/mining plan benefits targeted; near-term CapEx flat to fix reliability, with medium-term sustaining CapEx reductions planned — enhancing FCF visibility .
  • Capital redeployment: Ma’aden shares provide strategic flexibility; Patos sale monetizes non-core; Carlsbad review ongoing — potential catalysts on portfolio optimization .
  • Near-term trading: Expect positive sentiment from pricing momentum and phosphate recovery; watch FX impacts in Q1 (Brazil payables) and H1 turnaround timing; stronger H2 setup as reliability projects complete .
  • Medium-term thesis: Mosaic levered to constructive ag fundamentals, phosphate supply tightness, and potash pricing normalization, with self-help via cost reductions and asset optimization supporting margin expansion and cash generation .