04 January 2013 13:02 [Source: ICIS news]
LONDON (ICIS)--Mosaic’s fiscal second-quarter profits were steady year on year, with the US-based fertilizer producer posting $629m (€484.3m) in net earnings for the period, the company said on Friday.
Mosaic’s net earnings for the same period in 2011 were $624m.
The company benefited from a $179m tax benefit during the quarter, helping to offset a $500m year-on-year fall in sales during the quarter, to $2.5bn. Mosaic attributed the fall to lower phosphate and potash sales volumes and depressed phosphate prices.
“In North and South America, we have been experiencing strong demand and sales underpinned by excellent application seasons. International shipments, however, were impacted by prolonged contract negotiations in India and China,” said Mosaic CEO Jim Prokopanko.
“With the settled China contract driving improved sentiment, we believe strong agricultural fundamentals will lead to strengthening crop nutrient markets,” he added.
Mosaic’s gross margin for the quarter was $676m, or 27% of net sales, compared to $881 - 29% of net sales - in the same period last year. The company said that the shortfall was a result of lower phosphate volumes and prices, although this was mitigated by lower raw material costs.
Prokopanko predicted that the company’s performance in 2013 would be driven by the current favourable environment for the farming sector.
He said: “Farmers around the world are enjoying outstanding economics, with high commodity prices and relatively low costs for crop nutrients and other inputs. Over the long term, economic and demographic trends are extremely promising for Mosaic.”
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