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Mosaic swings to US$431.1M loss in Q4'17 on US tax charge

Mosaic Co. swung to a net loss of US$431.1 million, or US$1.23 per share, in the fourth quarter of 2017 despite higher sales and operating earnings on a yearly basis, after recording a US$458 million noncash charge associated with changes in U.S. tax legislation.

By contrast, the potash and phosphate producer recorded net earnings of US$12.0 million, or 3 U.S. cents per share, in the year-ago period.

The company said Feb. 19 that net sales rose to US$2.09 billion from US$1.86 billion in the comparable 2016 quarter, mainly driven by higher realized prices throughout the business. Operating earnings, meanwhile, totaled US$127.1 million, compared to US$73.6 million the year before, helped by higher gross margins.

Phosphate and potash sales volumes totaled 2.5 million tonnes and 2.2 million tonnes, respectively, both hitting the company's forecasts.

Mosaic's North American finished phosphate production totaled 2.3 million tonnes, or 79% of operational capacity, down from 2.5 million tonnes, or 84% of operational capacity, in the fourth quarter of 2016. On the other hand, potash output came in at 2.1 million tonnes, or 87% of operational capacity, up from 82% a year earlier when the company's Colonsay mine in Saskatchewan was temporarily idled.

CapEx for the quarter totaled US$230.2 million, compared to US$209.4 million in the year-ago period. Mosaic had total cash of US$2.2 billion and long-term debt of US$5.2 billion as of Dec. 31, 2017. The company also used US$1.08 billion in cash to complete the purchase of Vale SA's Vale Fertilizantes business and pre-paid US$200 million on an outstanding term loan.

For the full year, Mosaic likewise swung to a net loss of US$107.2 million, compared to net earnings of US$297.8 million in 2016. Sales, meanwhile, totaled US$7.41 billion, up from US$7.16 billion in the prior year.

For 2018, the group expects to book adjusted earnings of US$1.00 to US$1.50 per share, while CapEx is expected to range from US$900 million to US$1.1 billion. Potash and phosphate sales are both expected to come in at between 8.2 million and 9.0 million tonnes, while sales from the Fertilizantes asset are estimated to range from 9.5 million to 10.3 million tonnes.