Itafos reported its Q4 2020 and full year 2020 financial results and operational highlights. The Company’s financial statements and management’s discussion and analysis for the three months and year ended December 31, 2020 are available under the Company’s profile at www.sedar.com and on the Company’s website at www.itafos.com. All dollar values are in thousands of US Dollars except as otherwise noted.
“Despite many challenges throughout 2020, we delivered financial results in line with our expectations,” said G. David Delaney, CEO of Itafos. “During the fourth quarter we began to see improvements in both the agricultural and phosphate fundamentals, which we expect to benefit our 2021 performance.”
“In addition to the improved phosphate fundamentals, we put plans in place during the fourth quarter to optimize the cash returns of the business by looking at capital-lite alternatives to capital spending and our continuation of the company wide cost savings plans,” added Mr. Delaney.
For the year ended December 31, 2020:
- Revenue of $260,185 in 2020 compared to $339,430 in 2019; the decrease in 2020 was attributed to lost revenue resulting from product shortages due a sulfuric acid supply disruption and the idling of Arraias;
- Adjusted EBITDA of $15,047 in 2020 compared to 2019 adjusted EBITDA of $(3,203); the increase in 2020 was primarily due to cost savings following the idling of Arraias and implementation of corporate wide cost savings initiatives;
- Net loss of $(62,306) in 2020 compared to a net loss of $(144,171) in 2019, primarily related to lower impairments of non-current assets, lower depreciation and depletion and the same factors that resulted in improved adjusted EBITDA, which were partially offset by a write-off of mineral properties at Paris Hills;
- Sustained environmental, health and safety excellence at Conda and Arraias, including implementation of corporate-wide risk mitigation measures to address potential impacts to employees, contractors and operations as a result of the COVID-19 pandemic resulting in no significant impacts to operations;
- Completed a reduced scope plant turnaround at Conda during July 2020 as part of its risk mitigation measures during the COVID-19 pandemic with no environmental releases or recordable incidents;
- Significant disruption in sulfuric acid supply at Conda from its primary supplier through October 30, 2020;
- Total 2020 production volumes at Conda were 516,480t, representing a 10% decrease year-over-year primarily due to the disruption in sulfuric acid supply;
- Adjusted 2020 EBITDA at Conda of $34,336, a 2% decrease year-over-year primarily due to lower production volumes related to the disruption in sulfuric acid supply and lower realized prices, partially offset by lower cash costs;
- Significant progress in extending the Conda’s mine life through permitting and development of H1/NDR, including:
- achieved a key permitting milestone following the submittal of the Mine and Reclamation Plan to the BLM,
- achieved a key permitting milestone following the submittal of the IAN by the BLM,
- achieved a key permitting milestone following the publication of the NOI to prepare an EIS, which formally commences the NEPA EIS preparation and public engagement process by the BLM and the U.S. Department of Agriculture Forest Service, and
- secured support from the Idaho legislature via House Joint Memorial #11, which passed unanimously as well as numerous letters of support from local and state officials.
For the three months ended December 31, 2020:
- Revenue of $75,075 in 2020 compared to $81,431 in 2019; the decrease in 2020 was attributed to lost revenue resulting from product shortages due to the disruption in sulfuric acid supply and the idling of Arraias;
- Adjusted EBITDA of $4,803 in 2020 compared to 2019 adjusted EBITDA of $(1,622), primarily a result of cost savings following the idling of Arraias;
- Net loss of $(2,489) in 2020 compared to a net loss in 2019 of $(88,465), primarily due to lower impairments of non-current assets, lower costs resulting from idling of Arraias and lower corporate-wide selling, general and administrative expenses due to implementation of corporate wide cost savings initiatives;
- Total 2020 production volumes at Conda of 145,665t, representing a 4% increase year-over-year primarily due to timing of the MAP+ production and higher APP production; and
- Adjusted EBITDA at Conda of $7,323 in 2020 compared to $8,213 in 2019, representing a 11% decrease year-over-year primarily due lower cash margin per tonne P2O5 due to higher input costs, which was partially offset by higher realized prices.
The Company is closely monitoring potential risks to its operations as a result of the COVID-19 pandemic, including factors that could impact production or demand for its products. Despite near-term uncertainties, the Company is not currently projecting any material impact on its operations or financial outlook as a result of the COVID-19 pandemic. The Company provides guidance on certain non-IFRS measures that management considers to evaluate the Company’s operational and financial performance. Management believes that the non-IFRS measures provide useful supplemental information to investors, analysts, lenders and others. Definitions and reconciliations of non-IFRS measures to the most directly comparable IFRS measures are included in Section 8 of the Company’s management’s discussion and analysis available under the Company’s profile at www.sedar.com and on the Company’s website at www.itafos.com.