August 11, 2022 07:44 ET | Source: Itafos Itafos
“We are pleased to report record performance during the second quarter and first half of 2022 in terms of safety and financial results along with continued strong operational performance. Our trailing 12 months adjusted EBITDA of $213 million represents a new Company record and has allowed us to make significant progress toward deleveraging our balance sheet, resulting in a net leverage ratio of 0.7x at the end of the period,” said G. David Delaney, CEO of Itafos.
“For the quarter, we recorded $155.0 million of revenues and $63.6 million of adjusted EBITDA on the back of continued strong production out of our Conda facility and positive contributions from running our sulfuric acid plant at Arraias.”
“We have also updated our full-year guidance for 2022 to reflect the continued strength of the business and market fundamentals. Finally, we remain focused on our key objectives, including extending Conda’s current mine life through permitting and development of H1/NDR and evaluating strategic alternatives for our non-North American assets.”
HOUSTON, Aug. 11, 2022 (GLOBE NEWSWIRE) -- Itafos Inc. (TSX-V: IFOS) (the “Company”) reported today its Q2 and H1 2022 financial and operational highlights. The Company’s financial statements and management’s discussion and analysis and annual information form for the three and six months ended June 30, 2022 are available under the Company’s profile at www.sedar.com and on the Company’s website at www.itafos.com. All figures are in thousands of US Dollars except as otherwise noted.
Q2 and H1 Market Highlights
DAP NOLA prices averaged $860/short ton (“st”) in Q2 2022 compared to $571/st in Q2 2021, up 51% year-over-year driven by strong agriculture and phosphate fertilizer market supply and demand dynamics. Similarly, DAP NOLA prices averaged $827/st in H1 2022 compared to $536/st in H1 2021, up 54% year-over-year. Specific factors driving the year-over-year improvements in DAP NOLA were as follows:
Specific factors driving the year-over-year improvements in DAP NOLA were as follows:
The Company’s revenues, adjusted EBITDA, net income, basic earnings per share and free cash flow were all up in Q2 2022 compared to Q2 2021 as follows:
The increase in the Company’s Q2 2022 financial performance compared to Q2 2021 was primarily due to higher realized prices at Conda, which were partially offset by higher input costs, and the restart of the sulfuric acid plant at Arraias.
The Company’s total capex spend in Q2 2022 was $16.0 million compared to $18.2 million in Q2 2021 with the decrease primarily due to a shorter turnaround at Conda in 2022 compared to 2021, which was partially offset by activities related to the initiative to produce and sell HFSA at Conda and maintenance activities at Arraias related to the restart of the sulfuric acid plant.
The Company’s revenues, adjusted EBITDA, net income, basic earnings per share and free cash flow were all up in H1 2022 compared to H1 2021 as follows:
The increase in the Company’s H1 2022 financial performance compared to H1 2021 was primarily due to higher realized prices at Conda, which were partially offset by higher input costs, and the restart of the sulfuric acid plant at Arraias.
The Company’s total capex spend in H1 2022 was $21.3 million compared to $21.0 million in H1 2021 with the increase primarily due to activities related to the initiative to produce and sell HFSA at Conda and maintenance activities at Arraias related to the restart of the sulfuric acid plant, which were partially offset by a shorter turnaround at Conda in 2022 compared to 2021.
As at June 30, 2022, the Company had trailing 12 months adjusted EBITDA of $213.1 million compared to $143.4 million at the end of 2021 with the increase primarily due to the same factors that resulted in higher adjusted EBITDA in H1 2022.
Also as at June 30, 2022, the Company had net debt of $146.2 million compared to $217.7 million at the end of 2021 with the decrease primarily due to principal payments under the Company’s secured term loan (the “Term Loan”) and Conda’s secured working capital facility (the “Conda ABL”) higher cash and cash equivalents. The Company’s net debt as at June 30, 2022 was comprised of $61.5 million in cash and $207.7 million in debt (gross of deferred financing costs). For the six months ended June 30, 2022, the Company repaid $47.6 million of debt, including $42.3 million of principal under the Term Loan and $5.0 million cash drawn under the Conda ABL. As at June 30, 2022, the Company’s net leverage ratio was 0.7x compared to 1.5x at the end of 2021.
As at June 30, 2022, the Company had liquidity of $68.7 million comprised of $61.5 million in cash and $7.2 million in Conda ABL undrawn borrowing capacity.
Subsequent to June 30, 2022, the Company:
The Company expects the current strength in the global agriculture and phosphate fertilizer fundamentals to continue. Accordingly, the Company expects continued strength in pricing and volume fundamentals in the phosphate fertilizer markets with a moderate softening of prices during H2 2022 relative to H1 2022.
Specific factors the Company expects to support the continued strength in the global phosphate fertilizer markets during H2 2022 are as follows:
Specific factors the Company expects to influence the moderate softening of the global phosphate fertilizer markets during H2 2022 relative to H1 2022 are as follows:
The Company expects sulfur and sulfuric acid prices to decrease globally due to increased refinery activity and softer demand from phosphates and metals consumers.
The Company’s revised guidance for 2022 is as follows:
The Company revised its guidance for 2022 as follows:
In preparing its revised guidance for 2022, the Company maintained is prior assumption for expected average DAP NOLA during H2 2022 of $690-750/st.
The Company continues to focus on the following key objectives to drive long-term value and shareholder returns:
The Company is a phosphate and specialty fertilizer company. The Company’s businesses and projects are as follows:
In addition to the businesses and projects described above, the Company also owns Paris Hills (Idaho, US) and Mantaro (Junin, Peru), which are phosphate mine projects that are in process of being wound down.
The Company is a Delaware corporation that is headquartered in Houston, TX. The Company’s shares trade on the TSX Venture Exchange (“TSX-V”) under the ticker symbol “IFOS”. The Company’s principal shareholder is CL Fertilizers Holding LLC (“CLF”). CLF is an affiliate of Castlelake, L.P., a global private investment firm.
For more information, or to join the Company’s mailing list to receive notification of future news releases, please visit the Company’s website at www.itafos.com.
The Company considers both IFRS and certain non-IFRS measures to assess performance. Non-IFRS measures are a numerical measure of a company’s performance, that either include or exclude amounts that are not normally included or excluded from the most directly comparable IFRS measures. In evaluating non-IFRS measures, investors, analysts, lenders and others should consider that non-IFRS measures do not have any standardized meaning under IFRS and that the methodology applied by the Company in calculating such non-IFRS measures may differ among companies and analysts. The Company believes the non-IFRS measures provide useful supplemental information to investors, analysts, lenders and others in order to evaluate the Company’s operational and financial performance. These non-IFRS financial measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared in accordance with IFRS.
Non-IFRS measures included in this news release are defined as follows:
Reconciliations of non-IFRS measures to the most directly comparable IFRS measures are included in the Company’s management’s discussion and analysis available under the Company’s profile at www.sedar.com and on the Company’s website at www.itafos.com.
Other defined terms included in this news release are as follows:
Certain information contained in this news release constitutes forward-looking information. All information other than information of historical fact is forward-looking information. Statements that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future include, but are not limited to, statements regarding estimates and/or assumptions in respect of the Company’s financial and business outlook are forward-looking information. The use of any of the words “intend”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “would”, “believe”, “predict” and “potential” and similar expressions are intended to identify forward-looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. No assurance can be given that this information will prove to be correct and such forward-looking information included in this news release should not be unduly relied upon.
Forward-looking information is subject to a number of risks and other factors that could cause actual results and events to vary materially from that anticipated by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to differ materially from expected results described in forward-looking statements include, but are not limited to, uncertainties of estimates of capital and operating costs and production estimates; the ability of the Company to meet its financial obligations and minimum commitments, fund capital expenditures and comply with covenants contained in the agreements that govern indebtedness; fluctuations in foreign exchange or interest rates and stock market volatility; the continued supply of sulfuric acid to Conda from its primary supplier and those risk factors set out in the Company’s annual information form and other disclosure documents available under the Company’s profile on SEDAR at www.sedar.com and on the Company’s website at www.itafos.com. Readers are cautioned that the foregoing list of risks, uncertainties and assumptions are not exhaustive. The forward-looking information included in this news release is expressly qualified by this cautionary statement and is made as of the date of this news release. The Company undertakes no obligation to publicly update or revise any forward-looking information except as required by applicable securities laws.
This news release contains future oriented financial information and financial outlook information (together, “FOFI”) about the Company’s prospective results of operations, including statements regarding expected adjusted EBITDA, net income, basic earnings per share, maintenance capex, growth capex and free cash flow. FOFI is subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The Company has included the FOFI to provide an outlook of management’s expectations regarding anticipated activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s reasonable estimates and judgements; however, actual results of operations and the resulting financial results may vary from the amounts set forth herein. Any financial outlook information speaks only as of the date on which it is made and the Company undertakes no obligation to publicly update or revise any financial outlook information except as required by applicable securities laws.
NEITHER THE TSX-V NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX-V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
For further information, please contact:
Matthew O’Neill Itafos Investor Relations investor@itafos.com 713-242-8446