The Mosaic Companys CEO Discusses Record Setting Safety Results
The Mosaic Company reported first quarter 2014 net earnings on Tuesday of $218 million, compared to $380 million a year ago.
In its quarterly statement, the company also reported earnings per diluted share were $0.54 in the quarter compared to $0.89 last year. Mosaic's net sales in the first quarter of 2014 were $2.0 billion, down from $2.3 billion during the same period in 2013.
Operating earnings during the quarter were $267 million, down from $491 million a year ago, as higher phosphate and potash sales volumes were more than offset by lower realized prices. On a combined basis, notable items, including a discrete tax benefit and a mark-to-market loss in value of the forward share repurchase agreement, had a negligible effect on the quarter.
“Mosaic delivered another quarter of solid results amid improving global demand for both phosphate and potash,” said Jim Prokopanko, President and Chief Executive Officer. “While weather continued to create challenges in the operating environment, strong global demand for phosphates pushed prices and margins higher during the first three months of the year, and our early positioning of potash in North America allowed for significant volume growth.
“Our long list of strategic accomplishments continued to grow in early 2014. We reached agreements to repurchase an additional 8.2 million of Mosaic's shares, bringing our total repurchase commitments to 12 percent of our 2013 year-end shares. In addition, we completed the acquisition of CF Industries' phosphate business in Central Florida and announced an agreement to acquire ADM's fertilizer distribution business in Brazil. We are also implementing plans to generate cost savings of one-half billion dollars over the next five years, ensuring Mosaic remains a low-cost producer.”
Cash flow provided by operating activities in the first quarter of 2014 was $627 million compared to $579 million in the prior year. First quarter 2014 cash flows reflect strong sales volumes and declining inventory levels. Capital expenditures totaled $275 million in the quarter. Net cash used in investing activities was $1.6 billion, leaving Mosaic's total cash and cash equivalents at $2.5 billion and long-term debt at $3.0 billion as of March 31, 2014.
An Unwavering Commitment to Health and Safety
As well as reporting “solid” financial results, Prokopanko also discussed the company’s resolute commitment to sustainability and employee safety. “Mosaic’s enduring and unwavering commitment to sustainability begins with the health and safety of our people—and I am pleased to report that fiscal 2013 was Mosaic’s best year ever for safety performance,” he said.
“In particular, I’d like to highlight the performance of our Canadian potash expansion program, where we are employing many short-term contractors to expand our Esterhazy, Saskatchewan mining operations. Mine expansions are high-risk environments, and contractors must be thoroughly trained in Mosaic’s safety standards before they begin work.
“To date, we’ve performed 20,000 contractor orientations, and we have recorded more than 10 million hours worked on expansion projects. Even with so many new people, we’ve reduced our recordable injury frequency rate from 2.68 in fiscal 2011 to 1.0 in fiscal 2013. Our safety training efforts have also led to increased risk awareness among contractors and employees, and a corresponding, fourteen-fold increase in near-miss reporting in fiscal 2013 versus fiscal 2011.”
Growing global demand for potash and phosphate, alongside the company’s commitment to sustainability and social responsibility set’s The Mosaic Company in good stead for the rest of 2014.
