MOSAIC CO
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
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FY2023 · Filed Feb 22, 2024
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Phosphates
Phosphates Net Sales and Gross Margin
The following table summarizes the Phosphates segment’s net sales, gross margin, sales volume, selling prices and raw material prices:
| Years Ended December 31, | 2023-2022 | 2022-2021 | |||||||||
| (in millions, except price per tonne or unit) | 2023 | 2022 | 2021 | Change | Percent | Change | Percent | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net sales: | |||||||||||
| North America | $3,749.8 | $4,211.2 | $3,251.4 | $(461.4) | (11)% | $959.8 | 30% | ||||
| International | 974.5 | 1,973.0 | 1,671.5 | (998.5) | (51)% | 301.5 | 18% | ||||
| Total | 4,724.3 | 6,184.2 | 4,922.9 | (1,459.9) | (24)% | 1,261.3 | 26% | ||||
| Cost of goods sold | 4,022.2 | 4,425.2 | 3,617.5 | (403.0) | (9)% | 807.7 | 22% | ||||
| Gross margin | $702.1 | $1,759.0 | $1,305.4 | $(1,056.9) | (60)% | $453.6 | 35 | ||||
| Gross margin as a percentage of net sales | 14.9% | 28.4% | 26.5% | ||||||||
| Sales volumes(a) (in thousands of metric tonnes) | |||||||||||
| DAP/MAP | 3,625 | 3,399 | 3,904 | 226 | 7% | (505) | (13)% | ||||
| Performance and Other(b) | 3,366 | 3,159 | 3,789 | 207 | 7% | (630) | (17)% | ||||
| Total finished product tonnes | 6,991 | 6,558 | 7,693 | 433 | 7% | (1,135) | (15)% | ||||
| Rock(c) | 1,622 | 1,719 | 1,772 | (97) | (6)% | (53) | (3)% | ||||
| Total Phosphates Segment Tonnes(a) | 8,613 | 8,277 | 9,465 | 336 | 4% | (1,188) | (13)% | ||||
| Realized prices ($/tonne) | |||||||||||
| Average finished product selling price (destination)(d) | $646 | $913 | $618 | $(267) | (29)% | $295 | 48% | ||||
| DAP selling price (fob mine) | $573 | $804 | $564 | $(231) | (29)% | $240 | 43% | ||||
| Average cost per unit consumed in cost of goods sold: | |||||||||||
| Ammonia (metric tonne) | $426 | $603 | $396 | $(177) | (29)% | $207 | 52% | ||||
| Sulfur (long ton) | $181 | $368 | $181 | $(187) | (51)% | $187 | 103% | ||||
| Blended rock (metric tonne) | $75 | $70 | $60 | $5 | 7% | $10 | 17% | ||||
| Production volume (in thousands of metric tonnes) - North America | 6,568 | 6,647 | 7,331 | (79) | (1)% | (684) | (9)% | ||||
(a) Includes intersegment sales volumes.
(b) Includes sales volumes of MicroEssentials® and animal feed ingredients.
(c) Sales volumes of rock are presented on a wet tonne basis based on average moisture levels of 3.5% to 4.5% as it exits the drying process and is prepared for shipping.
(d) Excludes sales revenue and tonnes associated with rock sales.
The Phosphates segment’s net sales were $4.7 billion for the year ended December 31, 2023, compared to $6.2 billion for the same period a year ago. The decrease in net sales was primarily due to lower average finished goods selling prices, which resulted in a decrease in net sales of approximately $1.7 billion. This was partially offset by higher sales volumes of finished product, which favorably impacted net sales by approximately $350 million. Net sales were also unfavorably impacted by approximately $110 million due to lower raw materials sales driven by lower sales prices and volumes of sulfur and ammonia.
Our average finished product selling price decreased 29%, to $646 per tonne for the year ended December 31, 2023, compared to $913 per tonne for the same period a year ago, due to the factors discussed in the Overview.
The Phosphates segment’s sales volumes of finished products increased to 7.0 million tonnes for the year ended December 31, 2023, compared to 6.6 million tonnes in 2022, due to the factors discussed in the Overview.
Gross margin for the Phosphates segment decreased to $702.1 million in the current year compared with $1.8 billion for the prior year. The decrease was primarily driven by significantly lower finished product selling prices, which unfavorably impacted gross margin by approximately $1.7 billion compared to the prior year. Gross margin was also negatively impacted
F- 8 by approximately $200 million, due to increased conversion costs, and $100 million due to increased rock costs, as discussed below. These decreases were partially offset by lower raw material costs of sulfur and ammonia as discussed below, which impacted gross margin by approximately $590 million and by increased sales volumes of approximately $200 million. Gross margin was also favorably impacted by approximately $110 million of lower costs related to the timing of idle plant and turnaround costs in the current year period.
Our average consumed price for ammonia in our North American operations decreased to $426 per tonne in 2023 from $603 a year ago. The average consumed price for sulfur for our North American operations decreased to $181 per long ton for the year ended December 31, 2023, from $368 in the prior-year period. The purchase price of these raw materials is driven by global supply and demand. The consumed ammonia and sulfur prices also include transportation, transformation, and storage costs.
The average consumed cost of purchased and produced rock increased to $75 per tonne in the current year, from $70 a year ago. For the year ended December 31, 2023, our North American phosphate rock production decreased to 9.1 million tonnes from 9.6 million tonnes in the prior year, due to geology of rock and operational challenges.
The Phosphates segment’s production of crop nutrient dry concentrates and animal feed ingredients were similar to the prior year at approximately 6.6 million tonnes. For the year ended December 31, 2023, our operating rate for processed phosphate production decreased to 65%, compared to 67% in the same period of the prior year.
F- 9
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