Mosaic Company (The)

good morning and welcome to the mosaic company's second quarter 2025 earnings conference call at this time all participants have been placed in a listen only mode after the company completes their prepared remarks the lines will be open to take your questions and now i'll turn the call over to mr jason trembley please go ahead thank you and welcome to our second quarter 2025 earnings call opening comments will be provided by bruce bodine president and chief executive officer

Jenny Wong, Executive Vice President Commercial, will then cover the market update, and Luciano Ciani-Perez, Executive Vice President and Chief Financial Officer, will review the financial results and capital allocation progress. We will then open the floor for questions. We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date, and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published yesterday and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now, I'd like to turn the call over to Bruce.

Good morning. Thank you for joining our call. I'll start with an overview of our performance and outlook, then Jenny will provide insight into the markets, and Luciano will discuss details of our earnings. Our key messages for today are, first, our hard work to improve operating performance is paying off. It's apparent in our Brazil results, and we expect to see improvements in our U.S. phosphate production business now that the vast majority of our work to enhance reliability is complete. Second, the market environment remains strong with tight supply leading to very strong phosphate margins and rising potash prices. In fact, we raised our full year potash production to capture strong demand. Third, the cost reduction efforts we've been pursuing in Brazil have led to a strong first half of the year, and we expect earnings growth to accelerate in the remainder of 2025. And fourth, Our extensive market access continues to be a key competitive advantage for Mosaic. The current market situation demonstrates this point. With some unevenness in the Americas, there is still more than enough demand around the world for all the tons we can produce. We have the agility to send tons to markets where demand is strongest. To cover our second quarter results, we generated net income of $411 million and adjusted EBITDA of $566 million, compared with a net loss of $162 million and adjusted EBITDA of $584 million in the same quarter of 2024. The factors that drove earnings lower are behind us, and across the business, we are poised for a strong second half of 2025. Potash and phosphate markets are tight, and we are maximizing production to benefit fully. we see no signs of a second-half price reset that has occurred in the past few years. The global phosphate market has been tight for two years now, and we do not expect that to change in the near to medium term, even with the additional supply we expect to provide to the market. All of the supply and demand dynamics we've been discussing remain in effect. While China recently resumed exports at a low level, Chinese exports remain restricted as producers there meet domestic demand for agriculture and growing demand for industrial uses. Global farmer demand for phosphate fertilizers remains robust. As an example, Indian importers have come back to the market with increased government support and are now working to meet two years' worth of pent-up demand. Remember, there is not much additional capacity that is expected to come to the market over the next few years, and announced projects take quite some time to come online. Put simply, there is not enough phosphate fertilizer available to meet demand, and we expect this dynamic to continue well into 2026, even if there is some demand deferral in the Americas. In our business, our work to fortify our US phosphate assets to maximize future production took longer than we expected, but there is no more planned maintenance that would impede us from reaching our target run rate of 8 million tons per year. To provide more detail, our extraordinary level of work is complete at Riverview in Louisiana. Our Bartow plant has been operating at target rates for a couple months, and in New Wales, where installation of our final new gypsum pumping station was delayed, all three new stations are complete. we are now returning to our normal cycle for turnarounds. Our third quarter sales volume guidance of 1.8 to 2 million tons reflects our confidence in our strengthened assets. Our annual guidance for phosphate production is now 6.9 to 7.2 million tons, reflecting the more extensive maintenance downtime we experienced in June and July. It's also important to note that as our volumes improve, so do our unit costs. we expect to reach our analyst day per ton cost targets later this year. In potash, the market has evolved from balanced to tight. Maintenance activities at multiple producers around the world have reduced near-term supply and demand remains strong, underpinned in part by continuing high palm oil prices in Southeast Asia. We are running hard to meet demand and benefit from the market conditions. The second quarter turnaround at Esterhazy is complete, and we plan to run our Calance mine at least through the end of this year. As a result, and to meet very strong global demand, we have increased our annual potash production guidance to 9.3 to 9.5 million tons. We're feeling very good about our business in Brazil too. While credit issues are persisting, we expect fertilizer demand to remain strong and supply limited. As a result, We anticipate EBITDA from the Mosaic for Lausanne segment to push higher from the strong levels we've seen the past two quarters. Before Jenny provides more details on the markets, I'd like to highlight the important competitive advantage our market access brings to Mosaic. The new Pomerantse facility, which was inaugurated last month, adds a million tons of distribution capacity in the fast-growing northern region and reinforces our market-leading presence in the country. We also continue to leverage our market access to grow the Mosaic Biosciences business. First half revenues for Biosciences more than doubled compared with a year ago. We expect Mosaic Biosciences to contribute positively to adjusted EBITDA beginning in the fourth quarter. Finally, a note on capital allocation. We're continuing to make progress on our work to reclaim capital so that we can deploy it in pursuit of better returns. The Hydroflow project and the new Pomerantse facility are good examples of this. We hope to have news on the processes we've announced, including Carlsbad and Tokori, in the near future. At the same time, we're expecting stronger free cash flow in the second half of the year, which would allow us to pay down debt and return capital to shareholders. All in all, we have made important and substantial progress this year, And we are in excellent position for a very strong second half of 2025. Now I'll pass the call to Jenny.