PLANS $250 MILLION SHARE REPURCHASE UNDER EXISTING AUTHORIZATION
APPROXIMATELY 500,000 TONNE PHOSPHATES CURTAILMENT
MOSAIC FERTILIZANTES TO ACHIEVE 2019 SYNERGIES OF $275 MILLION; NEW ADDITIONAL VALUE TARGET OF $200 MILLION BY 2022
PLYMOUTH, Minn.--(BUSINESS WIRE)--Sep. 9, 2019--
In advance of upcoming investor meetings, The Mosaic Company (NYSE: MOS) today announced that it will execute several strategic actions:
The company plans to initiate $250 million in stock repurchases under its existing share repurchase authorization, which has $850 million of remaining capacity.
“Mosaic’s stock currently presents an exceptional opportunity to deploy capital. We believe that these repurchases are the best use of our capital in today’s environment, and we will continue to evaluate the amount we repurchase based on expected cash flow,” said President and CEO Joc O’Rourke.
Effective October 1, Mosaic will idle its Louisiana phosphates operations to reduce production by approximately 500,000 tonnes in 2019. The move is expected to accelerate the reduction of high phosphate fertilizer inventories. Mosaic continues to expect strong fall fertilizer application in North America, and expects a more balanced global supply-and-demand picture to emerge by 2020.
“Phosphate prices have declined further through the summer, with excess imports continuing to enter the U.S. on top of high channel inventories,” Mr. O’Rourke said. “We expect our move to idle production to tighten supply and rebalance the market. Mosaic will prioritize shipments to meet key customer needs through the idling period.”
Mosaic Fertilizantes, the company’s Brazil-based business unit, has implemented actions necessary to meet or exceed its previously announced synergy target of $275 million in 2019. In addition, Mosaic Fertilizantes announced that it intends to drive an additional $200 million in annual value through ongoing business transformation efforts by the end of 2022.
“We believe taking these steps now will further enhance Mosaic’s ability to benefit from expected strong business conditions in 2020,” Mr. O’Rourke said.
About The Mosaic Company
The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single-source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the anticipated benefits and synergies of our acquisition of the global phosphate and potash operations of Vale S.A. conducted through Vale Fertilizantes S.A. (now known as Mosaic Fertilizantes P&K Ltda) (the “Transaction”), the curtailment of phosphate production and our ability to repurchase shares. Such statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. These risks and uncertainties include, but are not limited to: difficulties with realization of the benefits and synergies of the Transaction, including the risks that the acquired business may not be integrated successfully or that the anticipated synergies or cost or capital expenditure savings from the Transaction may not be fully realized or may take longer to realize than expected, including because of political and economic instability in Brazil or changes in government policy in Brazil such as higher costs associated with the new freight tables and new mining regulations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency and exchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates, including the performance of the Ma’aden Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the ability of MWSPC to obtain additional planned funding in acceptable amounts and upon acceptable terms, the timely development and commencement of operations of production facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; the risk that protests against natural resource companies in Peru extend to or impact the Miski Mayo mine, which is operated by an entity in which we are the majority owner; difficulties with realization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initially anticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing is disadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes in environmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or other greenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow of excess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints that Mosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges to necessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’s processes for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of the United States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing from management’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadian resources taxes and royalties, or the costs of the MWSPC, its existing or future funding and Mosaic’s commitments in support of such funding; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/or available debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s Esterhazy, Saskatchewan, potash mine or other potash shaft mines; other accidents and disruptions involving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risks associated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
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Source: The Mosaic Company
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