Mosaic Co (MOS) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 4, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Good morning, and welcome to the Mosaic Company's First Quarter 2023 Earnings Conference Call. [Operator Instructions]. Your host for today's call is Paul Massoud, Vice President of Investor Relations and FP&A of the Mosaic Company. Mr. Massoud, you may begin.

Paul Massoud

Thank you, and welcome to our first quarter 2023 earnings call. Opening comments will be provided by Joc O'Rourke, President and Chief Executive Officer; followed by Q&A. Clint Freeland, Senior Vice President and Chief Financial Officer; and Jenny Wang, Senior Vice President, Global Strategic Marketing, will also be available to answer your questions.

We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published yesterday and in our reports filed with the Securities and Exchange Commission.

We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now I'd like to turn the call over to Joc.

James O’Rourke

Good morning. Thank you for joining our first quarter 2023 earnings call. Mosaic delivered revenues of $3.6 billion, adjusted EBITDA of $777 million and adjusted earnings of $1.14 per share. The fundamentals of the agriculture market remain quite attractive. Global stock-to-use ratios for grain and oilseeds are at 25-year lows. To put that in context, it would take 2 to 3 years of perfect weather and adequate fertilizer applications in every major growing region around the world just to get back to normal levels.

With weather patterns shifting to an El Niño environment, the likelihood of that happening is low and would be exacerbated by under fertilization. We are beginning to see the negative impacts on crop production. Yields in the European Union turned lower in 2022 because of poor weather and under fertilization and will remain under pressure this year if fertilizer applications remain down.

We're seeing a similar story in rice. The combination of El Niño and under fertilization could further threaten yields in key growing regions. With reduced supply of sunflower seed oil because of the ongoing war in Ukraine, the global market needs alternative edible oils and is looking to palm oil as an important substitute. Lack of fertilization, particularly potash, will impact Southeast Asian production. All of these factors are expected to support global crop prices for the foreseeable future.