The Mosaic Company Earnings: 5 Things You Need to Know презентация

Margins continue to expand Margins continue to expand

Potash lower production costs as company operated plants at 90% capacity in anticipation of planned turnarounds and higher demand in coming months improved selling prices as potash markets recovered

Phosphates Low input costs boosted phosphates gross margin by a percentage point to 21% despite flat revenue. Phosphates contributed 50% to Mosaic’s operating earnings in Q2.

Costs in control Costs in control

Restructuring efforts paying off Mosaic’s selling, general, and administrative expenses were flat despite 4% higher revenue and greater business footprint (backed by acquisitions) compared to last year. 2015 target: SG&A expenses of $360-$380 million. Company incurred $382 million in 2014.

Integration of acquired business on track Integration of acquired business on track

International distribution segment growing Integration of Archer Daniels Midland’s fertilizer distribution business in Brazil and Paraguay acquired last year is complete. The acquisition pushed segment sales up by 17.5% in Q2. Mosaic’s distribution capacity in the region is projected to jump 50%.

Ma’aden joint venture to cost more Ma’aden joint venture to cost more

Wa'ad Al Shamal Phosphate Company Capital cost of JV project in Saudi Arabia -- in which Mosaic holds 25% stake --to be $8 billion, or 7% higher than initial estimates. At the time of agreement, Mosaic outlined $1 billion cash investment.

Sales volumes guidance revised Sales volumes guidance revised

Weak expected Q3 to blame Mosaic upgraded full-year phosphates sales volumes slightly, but downgraded potash volumes.

Foolish takeaway While Mosaic doesn’t give out full-year sales and profit guidance, it appears to be on track to a solid year. The fertilizer markets may be under pressure, but the company’s cost-reduction efforts and growth initiatives should push its margins higher in 2015 and beyond.