Mosaic is one of the world’s largest fertilizer makers, but the crop nutrient business has been plagued by low prices for several quarters. Indeed, Mosaic reported Tuesday that its first-quarter earnings were down 40 percent over a year ago.
The company also fleshed out an expense-reduction program that it telegraphed in 2013. The company will cut $500 million in costs over the next five years, including laying off 6 percent of its global workforce of about 8,200.
The cuts will be spread across the entire company, and will occur over the next year, Mosaic said. Mosaic’s Plymouth headquarters had employed 300 before the 50 jobs cuts were recently announced there, making for a reduction of about 17 percent.
The bulk of the company’s workforce is in its potash and phosphate mines, which produce minerals for fertilizer. Mosaic’s main mining hubs are Saskatchewan (potash) and Florida (phosphate).
The potash market has been hit particularly hard, and Mosaic is not alone in cutting employment in response. Potash Corp. of Saskatchewan, a potash giant, announced in December that it would lay off 18 percent of its workforce and close several mines.
Mosaic reported a first-quarter profit of $218 million, or 54 cents per share, for the January-to-March period, compared with $380 million, or 89 cents, a year ago. Analysts surveyed by Bloomberg were forecasting earnings per share of 59 cents.
Mosaic’s stock closed at $48.66, down $1.05, or 2.1 percent.
Mosaic’s sales of $2 billion were down from $2.3 billion a year ago, and roughly in line with expectations. Sales volumes of potash and phosphate were up during the quarter; the problem was pricing.
The average selling price for Mosaic’s potash fertilizer was $267 per ton, down from $376 per ton a year ago. The potash market was stung last summer by the collapse of an Eastern European potash cartel. Supply loosened up and prices fell,
The phosphate market, meanwhile, has been hurt at least partly by a slowdown in demand from India, a huge consumer of phosphate fertilizer.
But phosphate prices during Mosaic’s first quarter, while down from a year ago, did rally from the lows seen during the fourth quarter. “In phosphates, we experienced strong demand and good price momentum,” Mosaic CEO Jim Prokopanko told stock analysts.
Overall, Prokopanko said, “our outlook is positive. In the near term, we expect modest margin expansion in phosphates and stable operating rates in potash.”
Mike Hughlett • 612-673-7003