Mosaic: record 4Q08 result, strong FY2009 outlook
(30 July, Bloomberg) Phosphate and potash producer Mosaic (MOS) reported a 4Q net profit of US$863m, up 327% on the pcp. Quarterly sales rose 95% to US$3.8bn driven by higher fertiliser prices (phosphate and potash) and operational efficiencies. MOS is expanding phosphate capacity by 5% or 500kt over the next 12 mths by reactivating idled phosphoric and sulphuric acid plants and by utilising excess granulation capacity at existing facilities.
ML view: MOS’s recent decision to increase capacity is a sign that the company expects demand for DAP to remain strong in the mid-term. We share the same view and expect demand to continue to outpace supply for at least another 3 years. Note that in the past 4 years phosphate demand
has grown at ~5%pa. Even if demand growth slows to, say 3%pa, there is not enough new supply coming on stream in the next 36 months to meet this growth rate.
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- merrill bullish on phosphate for 3 yrs
merrill bullish on phosphate for 3 yrs
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