The Mosaic Company (NYSE: MOS) today reported net income of $1.2 billion and diluted earnings per share (EPS) of $3.50 for full year 2023.
Adjusted EBITDA(1) for the year was $2.8 billion and adjusted diluted EPS(1) was $3.57. The company reported fourth quarter net income of $365 million and diluted EPS of $1.11. Adjusted EBITDA(1) totaled $646 million for the quarter and adjusted diluted EPS(1) was $0.71.
Mosaic successfully navigated a highly dynamic market in 2023. We delivered strong free cash flow and returned significant capital to shareholders while reinvesting in the business' said Bruce Bodine, President and CEO. 'Looking into 2024, Mosaic expects to continue to benefit from a strong phosphates market, and is well positioned to deliver solid results as we optimize our low cost potash operations. In addition, we are focused on improving our phosphates production level, expanding our portfolio of value-added products, growing our leading presence in Brazil, and enhancing the overall efficiency of our operations'.
Highlights: Full year revenues declined 28 percent year-over-year to $13.7 billion, reflecting the impact of lower selling prices. The gross margin rate in 2023 was 16 percent, down from 30 percent in 2022.
Net Income in 2023 totaled $1.2 billion, declining 67 percent from 2022. Adjusted EBITDA(1) in 2023 totaled $2.8 billion, a decline of 56 percent from 2022. Cash flows from operating activities totaled $2.4 billion and Free Cash Flow(1) totaled $795 million.
Potash operating earnings were $1.2 billion in 2023, down from $2.8 billion in the prior year. Adjusted EBITDA(1) totaled $1.5 billion in 2023, down from $3.1 billion last year. We completed the development of Esterhazy K3, which is the largest and one of the most efficient and low-cost potash complexes in the world. Canpotex's port at Portland, Oregon returned to normal operation in December after being idled since April 2023. In response to current market conditions, Mosaic will be curtailing its production from its Colonsay mine.
Phosphate operating earnings were $375 million in 2023, compared to $1.3 billion in 2022. Adjusted EBITDA(1) totaled $1.2 billion in 2023, down from $2.2 billion in the prior year. Segment results reflect the impact of lower prices and production challenges due to weather-related events and repairs of our sulfuric acid facilities in Louisiana, partially offset by lower raw material prices. Phosphate prices stabilized in the second quarter of 2023 and rose in the second half of the year.
Mosaic Fertilizantes operating earnings were $75 million in 2023, down from $910 million in 2022. Adjusted EBITDA(1) totaled $327 million in 2023, down from $1.0 billion last year. In the second quarter of 2023, we finished the destocking of high-priced inventory which negatively impacted our first half 2023 results. Distribution business margin per tonne came in above the $30-$40 annual normalized range in the fourth quarter.
2024 Market Outlook
Global grain and oilseed markets are expected to remain tight in 2024. Crop production, threatened by geopolitical unrest, weather extremes and reduced fertilization, is struggling to keep up with strong demand driven by secular demographic changes and growing consumption from renewable fuels. As a result, global stocks-to-use ratios for grains and oilseeds are expected to remain under pressure for the foreseeable future. Today's healthy agriculture back drop and favorable economics will continue to incentivize growers to maximize yields and apply fertilizers.
These demand factors are especially promising for the phosphate market as they are expected to be matched by tight global supply well into 2024. China's exports are expected to remain capped as domestic agriculture and industrial demand is prioritized over fertilizer exports. Firm phosphate prices and low raw material prices suggest that stripping margins will stay elevated for the foreseeable future. In North America, after a long Fall application season and solid winter fill activities, demand strength continues into the Spring planting season. Brazil shipments are expected to remain solid in 2024 as barter ratio are favorable and growers need to replenish soil nutrients. In India, grower demand is strong and growers are waiting for higher government subsidy rates. Potash demand for North America is expected to remain robust in 2024, and demand in Southeast Asia and Brazil is expected to improve as the year progresses. Supply appears adequate to meet that demand in the near term.
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. Mosaic will conduct a conference call on Thursday, February 22, 2024, at 11:00 a.m. Eastern Time to discuss fourth quarter and full year 2023 earnings results. A simultaneous webcast of the conference call may be accessed through Mosaic's website at www.mosaicco.com/investors. This webcast will be available up to one year from the time of the earnings call.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about proposed or pending common dividends, special dividends, share repurchases, future transactions or strategic plans and other statements about future financial and operating results. 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: political and economic instability and changes in government policies in Brazil and other countries in which we have operations; 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 Wa'ad Al Shamal Phosphate Company (also known as MWSPC), the future success of current plans for MWSPC and any future changes in those plans; difficulties with realization of the benefits of our 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; 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 potash 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. The declarations and payment of future dividends and special dividends remain at the discretion of the Board of Directors.
Contact:
Joan Tong
Tel: 863-640-0826
Email: investor@mosaicco.com
Jason Tremblay
Tel: 813-775-4226
Email: investor@mosaicco.com
THE MOSAIC COMPANY 
