Biz ‘Bite:’ Itafos had a good FY2021

Itafos, one of Idaho’s big-3 phosphate firms, issued its 2021 financial results on March 24. The multi-national phosphate miner and fertilizer manufacturer owns the Itafos Condo phosphate plant north of Soda Springs and mines the Phosphoria Formation on Dry Ridge and Dry Valley in the Caribou Mountains.

Itafos reported that 2021 was a good year. It also offered guidance that it expected the first half of 2022 to be very good and the second half to good, though not as good as the first half. The company’s revenues, adjusted EBITDA, net income, basic earnings per share and free cash flow were all up in FY 2021 compared to FY 2020 as follows:

• revenues of $413.2 million in FY 2021 compared to $260.2 million in FY 2020
• adjusted EBITDA of $143.4 million in FY 2021 compared to $15.0 million in FY 2020
• net income (loss) of $51.4 million in FY 2021 compared to $(62.3) million in FY 2020
• basic earnings (loss) of C$0.35/share in FY 2021 compared to C$(0.46)/share in FY 2020
• free cash flow of $71.3 million in FY 2021 compared to $(10.3) million in FY 2020.

The firm also reported that it closed a three-year $205 million secured term loan. The proceeds of the loan were used to repay the firm’s existing term credit facility and to pay related transaction costs and fees. As of Dec. 31, 2021, the company had net debt of $217.7 million compared to $233.9 million at the end of 2020 with the decrease primarily due to higher cash and cash equivalents.

The financial results were influenced by the global phosphate market, with significant price increases in 2021 compared to 2020 as reflected by di-ammonium phosphate FOB from New Orleans (DAP NOLA). DAP NOLA prices averaged $602 per short ton in FY 2021 compared to $312 in FY 2020, up 93% year-over-year. Specific factors driving the year-over-year improvements in DAP NOLA were as follows:

• there were no significant phosphate fertilizer supply additions in 2021
• existing producers produced less than the year before
• existing inventory was drawn down, decreasing supply
• strong phosphate fertilizer demand for coarse grains and oilseeds
• increased restrictions and controls on exports of phosphate fertilizers from China and Russia.

Itafos stated in its 2022 guidance that it expected prices to drop some if the situation in the situation in the Ukraine improved in the second half of the year.