With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are diversified and specialty chemical manufacturers.

Fortune Sector Leaders: Chemicals

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Industrials came out on top this year, with 22 companies featured on the list.

100 Fastest-Growing Companies

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-346-Mosaic

The Tampa-based mining company plays a major role in the agriculture sector as one of the world's largest producers of phosphate and potash, which are used in fertilizers and animal feed.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-356-Mosaic

This producer of phosphate and potash nutrients for the agriculture industry is based in Plymouth, Minn.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

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The Mosaic Company produces concentrated phosphate and potash crop nutrients used in agriculture and industry to increase crop yields and soil health. Operating through its phosphates, potash, and Mosaic Fertilizantes segments, the company manufactures fertilizers such as diammonium phosphate, monoammonium phosphate, potash, and specialty blends like MicroEssentials and K-Mag. Mosaic also supplies phosphate-based animal feed ingredients under the Biofos and Nexfos brands, and distributes nitrogen-based fertilizers and biological complements. Its operations include mining, chemical manufacturing, blending, bagging, and logistics infrastructure across the Americas and international markets. Mosaic serves a wide range of customers, from agricultural retailers, cooperatives, and wholesalers to farmers and industry.

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Q3 2024

Mosaic (MOS): Company Profile, Stock Price, News, Rankings

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Mosaic

mosaic

Company's Fourth Quarter twenty twenty four Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Jason Tremblay.

Thank you. Welcome to our fourth quarter twenty twenty four earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer Jenny Wong, Executive Vice President, Commercial will then cover the market update Luciano Ciani Perez, Executive Vice President and Chief Financial Officer will review financial results and capital allocation progress. We will then open the floor for 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 today 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 Bruce.

Good morning, and thanks for joining our call. I'd like to start by welcoming Luciano to his first call as Mosaic's CFO. We've known him for a long time through his service on Mosaic's Board, and we're thrilled to have him on our team. We're taking a different approach this quarter. During this first part of our call, I'll cover our high level business performance and strategic progress, then Jenny Wong will give you an update on the markets, followed by Luciano providing more context on our financial performance and capital allocation strategy.

After that, we'll take your questions. I'll start with our key messages for today. First, agriculture markets have improved, and we expect constructive ag and fertilizer fundamentals in 2025. Second, at Mosaic, we are making operational and strategic progress, and the business is positioned well to benefit from good markets this year. And finally, our work to shed non core assets and reallocate capital is taking shape.

To cover the numbers, fourth quarter net income was $169,000,000 and adjusted EBITDA came in at $594,000,000 We saw strong phosphate prices and stripping margins, solid potash performance despite low prices and excellent underlying business performance in Brazil. Let's talk about the segments first. In potash, the Esterhazy complex, which is the world's largest potash mine and among the most efficient, continues to generate strong cash flow across the commodity cycle, and we are continuing to optimize it. Our Belle Plain potash mine delivered a 100% operating rate and record production in 2024. We resolved the electrical issues we experienced in the third quarter and we are operating at full milling and hoisting capacity now, which will let us continue to drive costs down.

It clearly benefits us to produce every ton we can at Esterhazy and we're investing to do just that. Last year, we finished a project to increase our compaction capacity by 500,000 tons. And this year, we expect to complete hydroflow project to provide an additional 400,000 tons of capacity per year. We expect potash demand to remain strong given affordability and the trends in crop prices combined with supply reductions caused by recent news coming out of Laos, China, Belarus and Russia. There's a lot going on in geopolitics that could impact potash markets.

There is quite a bit of uncertainty around Canadian tariffs and we're watching that situation closely. Even accounting for the impact of tariffs, potash prices will remain affordable. Therefore, we expect no major demand destruction. The potential resolution of the war in Ukraine would have very little impact to the global potash supply. The same goes for Belarus sanctions, very little impact on supply.

Jenny will give you more detail about these dynamics in a few minutes. In phosphate, supply remains tight and demand remains very strong, which has led to prices and stripping margins remaining significantly above historic levels for the past several years with no end in sight. I should note that we have secured our long term ammonia supply. We signed the last of three supply contracts late last year, so we have locked up reliable supply at competitive rates. Restoring our U.

S. Phosphate production to historical levels remains a top priority. Fourth quarter production was lower than expected because of a challenging recovery from hurricanes Helene and Milton. Most of our storm related downtime was in the fourth quarter. We've often said the pathway to higher levels is not straight up.

Early this year, we have turnarounds at Bartow and New Wales and we have more work to do to improve asset reliability in Florida and Louisiana. To this end, we are accelerating capital spending to address these issues and expect that work to be finished by the middle of the year. Overall, we expect our production volumes to improve throughout the year and reach 7,200,000 to 7,600,000 tons for the year. Our business in Brazil is performing very well even with the market and credit headwinds. Our fourth quarter adjusted EBITDA for the Mosaic for Lesante segment of $82,000,000 shows strong underlying business performance.

Our margins in Brazil are healthy. Our distribution margin was at the high end of the annual normalized range and our production cost per tonne trended down in the fourth quarter. With the constructive market dynamics we see ahead in 2025, we feel good about Mosaic's business in Brazil. Our solid operating performance is supported by good cost discipline. We're making good progress toward our cost reduction targets, but I'll leave the details to Luciana.

Now, I'll talk about our strategic progress. We've told you before that we're analyzing our facilities on the basis of their returns on capital. The outcomes of that work are allowing us to find better owners of underperforming assets and redeploy capital for better returns. We've already announced several deals, including the pending sale of our Patos De Minas site in Brazil and the conclusion of the Modin transaction. That deal gave us a transparent value for our investment, which is about $1,500,000,000 as of today, as well as a $522,000,000 gain in a long term capital redeployment possibility.

We have other moves in the works including our pursuit of strategic alternatives for our potash mine in Carlsbad, New Mexico. We're not just focused on making our portfolio stronger, we're also investing in our strengths and growing in our core business in new areas. In addition to the compaction and hydroflow project I mentioned earlier, our new 1,000,000 tonne blending plant in Pomeranci, Brazil is almost finished. Our newest growth engine Mosaic Biosciences is accelerating. We doubled revenues and acreage on which our products were applied in 2024 and we expect a similar growth rate in 2025.

We'll have a lot more to say on Mosaic Biosciences at our Analyst Day in New York on March 18. I hope you'll join us whether in person or online.

give you her thoughts on agriculture and fertilizer markets. Jenny?

Thank you, Bruce. We expect 2025 to be a good year for agriculture commodities. Let's start with crops. Fundamentals are strong for most crops around the world. Strong global corn demand in 2024 is leading to expectations of a much lower stocks to use ratio, which in turn has led to rising corn prices since last September.

Soybean prices have also moved off their lows that last year. Animal protein market remain very strong and are expected to continue to drive robust demand for grain and oil seeds product in feed regions. In addition, palm oil prices have stayed in a high range for some time now. All in all, the world's farmers have strong financial incentive to maximize yield in 2025. Of course, that bodes well for phosphate and potash demand.

First, for phosphate, higher crop prices mean phosphate will be more affordable. We believe demand will remain very strong. And remember, phosphate fertilizer demand is driven by a combination of factors, including rising oilseeds production with the increase in global biofuel demand. At the same time, rising use of phosphate for battery production has created another pool on phosphate. With limited new phosphate production coming into the market over the next few years and with ongoing Chinese export restrictions, we expect supply to remain tight and prices and stripping margins to remain elevated by historical standards.

Regarding stripping margins in the near term, we anticipate that they will remain attractive even with sulfur prices increasing as ammonia prices are expected to come to ease. And as a matter of fact, March spot ammonia price was concluded at $40 below from the last month. In potash, as Bruce mentioned, global demand has been strong and we expect that to continue. Palm oil prices are supporting another strong year for potash application in Malaysia and Indonesia, while Chinese demand is expected to remain solid after two consecutive record shipment years in 2023 and 2024 with volume topping 37,000,000 tons respectively. Bear in mind that shipment averaged just 15,000,000 tons in the preceding five years in China.

In addition, Brazil has walked through much of its inventories through the second corn crop and we have seen very strong demand for potash in the soybean season. As a result, we expect twenty twenty five shipments to set another record for potash. Supply is likely to be more constrained this year than last due to the two largest producers in China guiding to lower output in 2025 and the both Belarus Cali and the Uralkali announced that they would produce fewer tons. Additionally, there is significant uncertainty as to how much additional production will be available from Laos given continued issues with mine inflows and sinkholes. As a result, we believe potash market are improving are very constructive.

Now I will pass the call over to Luciano for insight into our financial performance.

Well, thank you, Jenny. And thanks to you, Bruce, for your warm welcome. So I've been CFO of Mosaic now for two months responsible for finance strategy IT. Coming in I think Mosaic is mature has a clear strategic direction, strong financial foundation. I can give you several examples.

The balance sheet is a good place, BBB where it's most efficient to be. We have lots of funding options in place. Share count has been reduced by almost 20 over the past years, something that maybe the market doesn't fully appreciate. And yes, after a few years of cost inflation, I believe there's good momentum in the cost control initiatives. And the $150,000,000 target you know, I'm confident we will reach it and we'll discuss this in a moment.

Capital expenditures are also in the control. Mosaic delivered on its commitment to reduce CapEx by about $200,000,000 last year. This year we're flat CapEx to address some reliability challenges, but we will continue to reduce CapEx in future years. I'm privileged to step in with so much already accomplished. I'll give you some detailed comments and color on some of the most meaningful numbers on our financial statements and performance.

This is a little new, but my goal is for you to be able to understand the drivers of our performance and to model it going forward. So I'll stop my comments with net income. Obviously, it's complicated. Lots of non recurring events. First one, we exchanged our stake in the MWSPC joint venture or the shares of Maadin and you see a $522,000,000 gain on this one.

And this is a difference between the market value of the shares on the date of the closing to the book value of our former stake on the joint venture. But then you have another gain of $28,000,000 and this is now the increase in the market price of the stock between the closing date and December 31. And going forward, you will see the mark to market of the value of those shares reflected in our financials. So this is going to be recurring. Net income was also impacted by this large balance sheet $390,000,000 for exchange loss in the fourth quarter, which is in the notables table in our press release.

That comes from the intercompany loans from The U. S. To Brazil and from The U. S. To Canada.

They're both denominated in U. S. Dollars. And the issue is that the Brazilian real weakened a lot during the fourth quarter by 14%, worst performing currency in the world. And so the local Brazilian balance sheet debt also increased by a similar amount.

And the Canadian dollar also weakened by 6%, so the Canadian balance sheet also faced a loss. So these negative effects were huge in the quarter and they go up into the consolidated financial statements of Mosaic as a whole. Well, but this foreign exchange story also goes into the adjusted EBITDA performance of our businesses and again and most importantly into Mosaic Fertilizantes in Brazil. The Brazilian distribution business buys and sells finished product and at any given time we have open payables in dollars. The payables now in Brazilian reals are more expensive.

And as we pay the obligations, we recognize a loss in EBITDA in the local income statement. The difference between the payables in U. S. Dollar, the current exchange rate which is more expensive and the older one, this goes into EBITDA. There are other smaller losses in FX hedging and all in all that reduced the adjusted EBITDA for Brazil by $35,000,000 in this quarter.

And may continue to have around $20,000,000 impact in the first quarter of twenty twenty five million dollars just because we still have been working through the old payables. And why am I saying all of this? Because I want to call you the attention to the fact that our adjusted EBITDA for Brazil in the fourth quarter was $82,000,000 but that was after all these charges. So to see our underlying performance, you need to add back this $35,000,000 loss. So instead of $82,000,000 of adjusted EBITDA, we are in the $120,000,000 territory.

And once these payable things is gone, that's the number you're going to see printed from the second quarter of twenty twenty five onwards. So it's actually going to be even higher given the cost improvements ongoing. So why we're now into this $120,000,000 plus territory for EBITDA? For two factors. First, cost performance is really now strong.

As part of the $150,000,000 cost reduction program, we already captured $35,000,000 recurring savings only in Brazil. Just to give us some color, one initiative for example, we changed our mine plan to increase rock production and we seized importing fossil to rock, which is much more expensive. That only change reduces our operating costs in Brazil by $35,000,000 to $40,000,000 annually and about $15,000,000 was already captured in 2024. The other factor is now that the FX rate provides a tailwind in costs. So altogether, if you compare fourth quarter of twenty twenty four with fourth quarter of twenty twenty three, you can see this in our performance data sheet, which is in the website.

Faucet rock costs are down 15% and phosphate conversion costs are down 23% in that period. So very confident about purchases going forward. So one other highlight is SG and A. Four ninety seven million dollars in 2024 is largely flat when you compare to $5.00 $1,000,000 in 2023. But 2024 includes a $30,000,000 loss on receivables.

You remember a significant Brazilian retailer got defaulted. But without this loss, SG and A would have been like instead of BRL4 million, would have been BRL34 million or a 6% year over year reduction. And considering other non recurring noncash factors, we can say that $42,000,000 have already been saved on intrinsic SG and A as part of the $150,000,000 in cost savings. And by the way, we've got insurance on these $30,000,000 debt. So at some point, we expect to revert the majority of this loss in bad debt.

How about potash and phosphates? In potash, MOP costs have been largely flat, $65 to $75 a tonne in the past four quarters. But it should edge down as we produce more tons from Esterhazy, which is our most efficient mine, and with the hydroflog project coming online later this year. The margins will also improve as we make more granular products, which in average earn about $20 to $30 more than standard products. In phosphates, the costs actually increased in Q4 due to the plants being idled following the hurricanes we discussed, But the recovering volumes will in 2025 will dilute the cost per tonne.

And we're already looking for more than $150,000,000 in cost reductions. So we have this digital acceleration program that should bring about $70,000,000 in benefit. Another $50,000,000 is coming from a better mine plan and mass recovery at our Patrocino and Arashar complex in Brazil. And we will discuss all of this in detail and we'll have additional news for you on our Analyst Day upcoming on March 18, which I invite all of you to attend. I'm sure we're going to be also discussing capital allocation in the Q and A.

And I was very lucky to come in right in the middle of the conclusion of the $1,500,000,000 deal with modern shares. And I actually got my hands and worked in the $125,000,000 PATOS deal. I'm fully committed with the program to reallocate capital to the benefits of shareholders. And one final note, we've decided to discontinue our monthly price and volume releases. We've received some feedback from you that these releases were not particularly helpful, more noise than signal, so we're discontinuing it.

So with that, I want to turn the call back to you, Bruce.

Thank you, Luciano. To summarize, Mosaic delivered a solid year despite considerable market weather and operational challenges. Our outlook for 2025 is positive with our improving operational performance, lower cost profiles and excellent financial foundation, Mosaic is well positioned to benefit from the strong market conditions we see ahead. Now, operator, we'd like to take questions from the audience.

We'll now begin the question and answer session. And your first question today will come from Chris Parkinson with Wolfe Research. Please go ahead.

Great. Thank you so much. In your press release, you mentioned it's your belief that 700,000 tonnes were sacrificed in 24,000 tonnes for your processed phosphate and you mentioned some of this in your prepared remarks. So that would leave you about 7.1 at the midpoint for '25. So at the midpoint for '25 guidance, it's about 300,000 tonnes.

Wouldn't just the FOSS acid turnarounds get you set number anyway? Or what's the best way to think about that? And if you could throw in some half on half comments that would be very helpful. Thank you so much.

Thanks, Chris. Yes, about 700,000 tons due to kind of those extraordinary events due to weather and some other things that we had to deal with in 2024 get you to that kind of seven, seven point one as you said. It's the fossil acid turnarounds it really is a sulfuric turnarounds that we've been focused on for the last several years coming out of the pandemic that really got upside down on a sequencing. And we've been talking about that and the catch up work. And I think that might be where you're going Chris if I understand right.

So yes So if you're is back as we've said kind of on those three year turnaround cycles. But what we found as we went into December and actually if you were to add in kind of the hurricane impacts toward December production we would add one of the best production years or quarters in maybe the last two years. So we had a chance to kind of put the accelerator down given that some of our sulfuric issues are largely behind us. And we did find a couple bottlenecks in phos acid particularly at new wells that we need to address. And part of the reason that our CapEx is staying flat this year is we're putting a little more money in the first half of the year to deal with some of these lingering effects on downstream of sulfuric in some of our facilities here in Central Florida and Louisiana.

So that is maybe the half over half difference that you're talking about Chris and what to look for. So as we announced quarter one was always going to be kind of a challenge quarter given the Bartow turnaround which should be wrapping up next week. And then we've got some other turnaround work that was in our normal schedule. But now we're accelerating forward some additional reliability work and funds forecasted at new wells that's going to suck up a little bit more capital this year in order so that the second half of the year is at that max capacity run rate. So you will see a difference between first half second half given that pull forward of some work that we're doing to really address those lingering reliability issues in phosphoric acid.

And your next question today will come from Andrew Wong with RBC Capital Markets. Please go ahead.

Hey, good morning and thanks for taking my questions. So Mosaix, I'll just have some very interesting monetization of assets with Moden and Pontos and Munas. Just wondering what other assets might be considered? You mentioned Carlsbad. Is there anything else that might be notable that we should be thinking about?

And then just regarding the modern transaction, are there ways to monetize that investment before the lockup period?

Yes, Andrew. No, thanks. I think we've been pretty consistent. And I'm going to turn over to Luciano in a minute to talk about some of the details because he kind of highlighted that on the prerecorded section. As we're looking at every asset within our portfolio to see if it generates returns that are acceptable, Some examples as you mentioned the modern transaction was the kind of tip of the iceberg, that this as we close 2024.

But even if you go back to Streamsong in 2023, that was another example of looking at our portfolio. The Pathos Diminas, mine which was an idled mine, had an opportunity to sell that for something that contributes very positively. And as you said, Andrew, we do have a process ongoing and are optimistic that we may have some news in the upcoming weeks to announce at Carlsbad. So every asset is being looked at. And if we've got opportunities to think differently about that, opportunities to maybe even consider divesting of that, those are things that we're going to continue to look at.

And we'll be talking a lot more about that in detail in our Analyst Day on March 18. But Luciano, I'll turn it over to you.

No, Bruce, we said it all. We ask for patients from you on the street because there's a lot of studies ongoing. No stone is going to be left unturned. There will be specifics being given at the analyst Investor Day. And as Bruce pointed out, we're very optimistic with the cars bad the way things are going.

So we should expect some news important news for you maybe as early as Q2. And as regards to modern shares, yes, there are ways to monetize it beforehand. We are looking into it, but you shouldn't expect something I would say on the size of the entire shareholding because simply because there are constraints, liquidity constraints to do it, like third parties to do it, but lots of ideas. Is that something that we're looking upon very, very carefully? But again as news comes out we're going to let you know as soon as we have decisions made.

Your next question today will come from Steve Byrne with Bank of America. Please go ahead. Steve, your line may be muted.

Yes, sorry about that. I'm struggling to understand your outlook for global phosphate shipments. It's the chart you have in Slide 20. You look at that and you look at the ten year period before 2022 and you would project something much greater than the low end of your forecast for 2025. So what has happened in these last few years?

It's not like these growers use of phosphate is discretionary if it's being removed with the crops. Is this a case where there has just been excess material in most soil? Has there been greater application rates than needed? Why isn't there a yield drag from this? And one more by extension, is there potential for this curve to really flatten longer term from your Bio Paths and PowerCoat products which can release the immobilized phosphate in soil?

Hey, Steve, thanks for the question. And I'm going to end up I'll kick it off and say a couple of opening remarks and then give it over to Jenny to kind of get into the specifics on the yield and application in phosphate and then the complement of your question on biosciences. But I think what we see is that it's actually a supply side limitation on demand growth for phosphates. There just is limited supply in the marketplace, which is why stripping margins have stayed so constructive for so long. And we're seeing that kind of $630 to $650 price point and north of $400 stripping margins, realized stripping margins for Mosaic, even above that by $20 to $40 a ton given our advantages.

So it really is the constructiveness and the tightness of the market largely driven by the export constraints and the discipline on exports coming out of China. So we don't see that changing much Steve and actually competition for phosphate molecules outside of just pure play agriculture are going to continue with our LFP. And this is probably where bioscience is actually a complementary to that supply constraint to actually allow farmers to continue to get good yield improvements even with the supply constraint on phosphates until such time that there is significant new greenfield capacity announced which just isn't the case. So a one to 1.5 pound compound annual growth rate and phosphates I think is what we would expect going forward through the decade. But Jenny, I'll turn it over to you.

Sure. Thanks Bruce. Steve, I think you raised a very good question. We actually projected the demand growth for phosphate globally should stay at a trend line between 1% to 2%, but you're exactly right. It didn't happen over the last couple of years.

As Bruce mentioned, it's really constrained by supply. As a result of it is quite supportive to the stripping margin and prices. I would like to also to mention to answer your questions related to the phosphate application rate and how that might impact the yield. As many people know or probably don't know, phosphorus is one of the least efficient applied nutrients, meaning in general only 50 of the phosphorus applied on the ground are uptaken or used by plant or crops. So meaning there is a big amount of phosphate being applied and stayed in the soil.

With reduced application rate over the last couple of years, we may see some of the underlying impacts to the yield. Some of the biological products like you mentioned and thank you for calling out the two flagship brands that we have, PowerCoat and Biopass. These are two good examples that microbial, the materials actually could help to generate organic asset, which help to make the phosphorus tied to the soil to be more available for the crops to use, which in turn to make the phosphate use efficiency a much higher, which helped the yield increases. So more to come apart from these two flagship brands that we have and we actually have even more advanced product in the pipeline. And stay tuned, we're going to talk more on our Analyst Day on March 18.

Thanks. Your next question today will come from Joel Jackson with BMO Capital Markets. Please go ahead.

Good morning. This is Anthony on for Joel. Maybe just a question on potash. What could maximum potash production look like compared to the guidance range you provided as global demand surprises to the upside this year?

Thanks, Anthony. I think there's probably limited upside on maximum production at least from us. And I think even on the Canadian producers I mean

Nutrien about what they think and I think that probably happened on prior call last week. But we're running at kind of full rate at Esterhazy full rate at Bell Plain. We use Calance as our swing facility. It will be running it is running right now. We always continue to analyze that.

But if there was upside I think it gets down to can the supply chain getting out of Canada actually take significant more tons. For sure there's more incremental on the fringes and that's probably on the high side. Well, not probably it is on the high side of our range. But there is a limit just given rail fluidity capacity at the ports to get significantly more capacity out of Canada. So I think that becomes the limiting constraint.

And that would as I said, the high side of our guidance really assumes that supply chain works very well and demand is on the higher end of the trend. Jenny, anything to add to that?

I think you covered, Bruce. I guess, apart from Canadian producers, we do not really see any major spare capacities in the rest of the world. As we mentioned on our earlier commentary, the major producers the two largest producers in China announced their production cut this year due to very low inventories that they had last year in their pond. And then we also see have seen the announcement out of FSU on their reduction of the production due to this long needed turnaround. And lastly, the addition of the supply out of Laos, it's very uncertain how much more they can push out of the country due to the issues around the sinkhole and water inflow.

So all in all, we do not see really any meaningful extra capacity really for potash to be able to get out for this year.

And your next question today will come from Vincent Andrews with Morgan Stanley. Please go ahead.

Thank you and good morning everyone. I can just ask on CapEx and working capital. Luciano, you've been in the seat for a couple of months. Can you talk about sort of how you view the CapEx level now? Obviously, it's down versus the last few years.

But do you think this is the right level? Are you comfortable for a maintenance CapEx is? And do you think CapEx will stay flat at these levels over the next few years? And then if I could just ask on working capital whether you think there are any opportunities there? And in particular maybe you could talk about how much working capital the fertilizer business consumes?

Ovis and thank you. Starting by CapEx, we're not happy with the level of CapEx where it is and we do have a target to reduce specialty sustaining CapEx throughout the years. We can shave probably over the next few years maybe $200,000,000 to $300,000,000 of the level that we are today. As Bruce said, we are spending perhaps $100,000,000 more this year to fix the reliability issues. And that reduction will mostly come over the next few years on maintenance CapEx.

That's what we are targeting. We would like to continue to have about maybe 100,000,000 one hundred and 50 million dollars every year put forward into very creative opportunity projects like the ones which were already discussed like the hydro floats compaction microcentials but maintenance CapEx is where we need to do some work. As for working capital there will be a buildup in working capital this year especially in the second half just because the business is resuming its growth. So the larger volumes in phosphates and in potash will point in that direction. And same thing in Brazil with Palmedente coming in and the second half, we have our target for sales this year is much greater than last year.

Brazil will continue to grow. So all in all, it will be a consumer of working capital. So and actually this plays out in our outlook for cash flow this year. We should expect, I would say, given the same levels of production, stronger cash flows in 2026, even more strong than the second half of twenty twenty five just because of this working capital buildup. That's an intrinsic, I would say part of the business.

It is well financed, so we have access to a lot of short term options to fund it. So that's the way it is. Like we build up in the first half, we generate cash in the second half. But this year despite the cash flow generation in the second half, there's still a little bit more of buildup because of the growth, which is a good thing.

Your next question today will come from Richard Garchatorena with Wells Fargo.

All right. Thanks. Good morning. Solid progress on the cost savings and the structure that for Lazantas, obviously, you've seen $35,000,000 or the $150,000,000 come from that in 'twenty four. Just wondering for 2025, the remaining cost savings from the $150,000,000 how much of that is going to be coming from for the Levanteis?

Is the rest going to be from SG and A? And then just on the Brazil market in general, maybe if you give some color in terms of what you've been doing to ensure that credit issues that you saw in 2024 won't continue anything that you've done that maybe protects you from potential further downsize that'd be great. Thank you.

Hey Richard, thanks. Just on the appreciate the recognition on the cost reduction. As we said half of that's already been delivered from a run rate standpoint. And the remainder of that is going to come from a number of different areas. As you said SG and A still got some cost savings to capture.

We're going to see some fixed cost absorption benefits as that we get that extra million tons of production and then growing to 1,500,000 tons of production in phosphates in North America. The improvements in production volume and reliability in South America are going to start to bring fixed cost absorption benefits as well. And then there's the hard savings that Luciano has talked about. But I think Luciano is going to I'll turn it over to him to talk more. But we're really looking at doubling down on even more cost reductions and turning more stones over in all corners of the business.

So more that we'll talk about there and I'll turn it over to him. But and then maybe over to Jenny, if Luciano doesn't answer it first on the credit issues in Brazil. Luciano? Well, thank you, Bruce.

The $150,000,000 it's going to be pretty much in the bag just by cost dilution in phosphates and in potash. And in fact, anything else in the fertilizer side will probably be on top of that. And so we are already crafting, what can we achieve in addition to the 150 and you will put some aggressive numbers coming soon. We also appreciate this I think the performance of Fertilizantes was a little clouded because of these FX effects. So pardon me if I spend too much time discussing it initially.

But I've got to reemphasize that we are really, really confident in the performance of this business going forward precisely because of the cost performance. And I'm going to go back to one of the things which I mentioned in the briefing. For example, we have this mine Arashar in Patro Sinho. The mine life is up to

So by changing the mine plan for example and yes, shortening mine life by maybe ten years from '62 to '52, we're accessing much better high grade areas. The improvement in mass recovery is substantial. So only at this particular site, we're going to get another US50 million dollars run rate starting in January 24. So there's a lot to extract from the Fortuna Zantas business. I encourage you to watch out for the performance of this line of business going forward.

And your next question today will come from Lucas Beymont with UBS. Please go ahead.

Hi, good morning, everyone. It's Chris Perrell on for Lucas. Following up on the potash commentary, prices were up in the first quarter as a pop ahead of potential tariffs. Could you just expand a bit on what you think potential tariffs on Canadian potash would have on pricing and demand and trade flows? And with the price up in the first quarter, do you realize that benefit in 1Q or 2Q?

Lucas, I'm going to I got your question down. I'm going to answer because we had a mic issue here. Didn't get to answer the second half of Richard's question on credit in Brazil. So let's do that first and then we'll hit your tariffs demand and trade flows issue. Jenny, you want to talk about credit in Brazil?

Yes. Thank you, Bruce. Richard, to your question on the credit risk issues in Brazil, we've been very diligent in managing our business in Brazil or made some tough choices between volume and margin and the credit risk. As a result of it, we have we've been really focusing on our margin, focusing on lower risk customers. And we have shifted our business away from traditional retailers in Brazil and more towards to A, end users, mega farmers B, traders, the green traders who have very good butter businesses with the farmers, lastly on the co ops.

So this is a very solid the customers with solid credit have give us a lot of insurance on the business quality and we will continue to do so in this year.

So Lucas on the tariff question obviously that's topic du jour in many corners of the globe. It's a dynamic situation one that we're watching very closely. I know even as of yesterday reconfirm these March '20 '5 percent tariffs. But we have numerous teams across our organization and all functions and facets working on this and paying attention to it. But listen at the end of the day if tariffs are imposed or when we see that it's going to be borne by downstream customers of Mosaic.

So that's unfortunate, but it is the reality of that situation. With 80% to 85% of the potash demand in The U. S. Coming from Canada, it's just hard to replace that. And so again, the downstream customers are going to bear the brunt of that cost.

The good news if you want to look at good news or silver lining is that given the affordability of potash today and the increase in corn prices and wheat prices and the general affordability of commodity on the ag side in general, Affordability is not that significant of an issue for potash even with a 20%, twenty five % tariff on top of it. The other advantage is that spring tons spring season demand is pretty much already baked and in place in space in North America in The U. S. So don't see any immediate impacts for spring on the downstream side. And just to reinforce that Jenny and I were with one of our large customers out of Ohio, a cooperative and we asked and had a lot of discussion around the tariff impact and sentiment of farmers.

Mosaic (MOS) Q4 2024 Earnings Call Transcript

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