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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Potash
Potash Net Sales and Gross Margin
The following table summarizes the Potash segment’s net sales, gross margin, sales volume and selling price:
| 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 | $1,899.9 | $2,122.3 | $1,456.8 | $(222.4) | (10)% | $665.5 | 46% | ||||
| International | 1,333.7 | 3,086.2 | 1,170.0 | (1,752.5) | (57)% | 1,916.2 | 164% | ||||
| Total | 3,233.6 | 5,208.5 | 2,626.8 | (1,974.9) | (38)% | 2,581.7 | 98% | ||||
| Cost of goods sold | 2,018.6 | 2,365.5 | 1,569.3 | (346.9) | (15)% | 796.2 | 51% | ||||
| Gross margin | $1,215.0 | $2,843.0 | $1,057.5 | $(1,628.0) | (57)% | $1,785.5 | 169% | ||||
| Gross margin as a percentage of net sales | 37.6% | 54.6% | 40.3% | ||||||||
| Sales volume(a) (in thousands of metric tonnes) | |||||||||||
| MOP | 7,969 | 7,236 | 7,277 | 733 | 10% | (41) | (1)% | ||||
| Performance and Other(b) | 901 | 865 | 909 | 36 | 4% | (44) | (5)% | ||||
| Total Potash Segment Tonnes | 8,870 | 8,101 | 8,186 | 769 | 9% | (85) | (1)% | ||||
| Realized prices ($/tonne) | |||||||||||
| Average finished product selling price (destination) | $365 | $643 | $321 | $(278) | (43)% | $322 | 100% | ||||
| MOP selling price (fob mine) | $308 | $632 | $285 | $(324) | (51)% | $347 | 122% | ||||
| Production volume (in thousands of metric tonnes) | 8,246 | 9,053 | 8,204 | (807) | (9)% | 849 | 10% | ||||
(a) Includes intersegment sales volumes.
(b) Includes sales volumes of K-Mag®, Aspire® and animal feed ingredients.
The Potash segment’s net sales decreased to $3.2 billion for the year ended December 31, 2023, compared to $5.2 billion in the prior year. The decrease in net sales was driven by an unfavorable impact from lower selling prices of approximately $2.5 billion, partially offset by favorable sales volumes of approximately $550 million.
Our average finished product selling price was $365 per tonne for the year ended December 31, 2023, a decrease of $278 per tonne compared with the prior year period, due to the factors discussed in the Overview.
The Potash segment’s sales volumes increased to 8.9 million tonnes for the year ended December 31, 2023, compared to 8.1 million tonnes in the same period a year ago, due to the factors discussed in the Overview.
Gross margin for the Potash segment decreased to $1.2 billion in the current year, from $2.8 billion in the prior year period. The decrease in gross margin in the current year period is primarily due to lower selling prices, which unfavorably impacted gross margin by approximately $2.5 billion. This was partially offset by a reduction in Canadian resource taxes and royalties of $580 million, as discussed below, and by an increase of approximately $380 million, due to higher sales volumes compared to the prior year. Higher idle and turnaround costs of approximately $40 million, largely due to the idling of our Colonsay, Saskatchewan mine during the first half of the current year, also negatively impacted gross margin in the current year.
We had expense of $403.4 million from Canadian resource taxes for the year ended December 31, 2023, compared to $927.9 million in the prior year. Royalty expense also decreased to $53.6 million for the year ended December 31, 2023, from $112.6 million in the prior year. The fluctuations in Canadian resource taxes and royalties are due to lower average selling prices and margins in the current year, compared to the prior year.
For the year ended December 31, 2023, potash production decreased to 8.2 million tonnes, compared to 9.1 million tonnes in the prior year period, resulting in an operating rate of 73% for 2023, compared to 81% for 2022. Lower production in the
F- 10 current year was largely driven by increased idle time compared to the prior year period, due to the Colonsay mine being idle during the first half of the year as mentioned above and planned downtime at our Esterhazy mine.
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