Itafos Inc.

Good day and welcome to the ETFOS 2026 Second Quarter Update Call. All participants will be in a listen-only mode. I would now like to turn the conference over to Mr. John Donnell, Director of Investor Relations. Please go ahead, sir.

Thank you, Chuck. Welcome to the ETFOS Second Quarter 2026 Update Call. The commentary in this recorded call is being made available as of Friday, August 7, 2026. This call includes forward-looking statements and may include certain non-IFRS financial measures. In discussing the company's future projections, any predictions and future expectations are based on the opinions, assumptions, and estimates of management which management believes to be reasonable. These opinions, assumptions and estimates are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those expressed in the forward looking information that we provide. You should not place undue reliance on any forward looking statements mentioned on this call. We use non-IFRS financial measures to help investors better understand our operating performance. These non-IFRS measures do not have any standardized meaning under IFRS and may not be comparable to similar financial measures used by other companies. Non-IFRS measures should not be considered as a substitute for nor superior to the measures of financial performance prepared in accordance with IFRS. Further details regarding the non-IFRS financial measures discussed on this call, including reconciliations to the most directly comparable IFRS measures, can be found in the earnings release dated August 5, 2026. With that, I'd like to turn the call over to eDefense's CEO, David Delaney, for his opening comments.

Thank you, John, and welcome, everyone, to our quarterly update on the company's results and outlook for the future. IDAFOS recorded consolidated revenues for the quarter of $144 million, an increase of 14% compared to the same period last year, driven by higher product prices and higher fertilizer and sulfuric acid prices and volumes in Brazil. We generated adjusted EBITDA of just under $18 million, representing an adjusted EBITDA margin of 12.4% on a consolidated basis. This margin decreased by about 50 basis points on a sequential basis, but was very resilient given continuing increases in raw material cost, namely for sulfur. At Conda, we successfully executed our annual turnaround that was completed on time and on budget. Conda has a long history of operating at peak utilization levels, and this quarter was no different. We produced comparable volumes of fertilizer at the plant this quarter as the same quarter last year, despite the industry-wide supply chain and logistics issues that caused some of the largest competitors to shut in production. At Arias, our team continues to improve operations, increase EBITDA generation, and exceed internal expectations. During the second quarter, we increased fertilizer production by 62%, on a year-over-year basis. Sulfuric acid sales were limited by the availability of sulfur purchases due to the ongoing market dislocations, but we were able to opportunistically step into an undersupplied market to generate higher revenues in EBITDA compared to the same quarter last year. This is all accomplished while the sulfuric acid plant was down for about 45 days for a turnaround. We pride ourselves on our ability to operate our plants efficiently and maximize fertilizer production. This quarter clearly demonstrated our team's ability to deliver on those metrics in what may have been the most challenging environment for the industry that I can remember. Furthermore, we met our high internal safety standards as our total TFIFR decreased to 0.53 as of June 30. As we look forward, global supply chains for phosphate, sulfur, ammonia, and other commodities continue to be disrupted by the ongoing conflict in Iran. We expect this to negatively affect operating margins most likely through the end of the year. It is unclear when the Middle East may stabilize, or what the new normal will look like, or how long it may take for that to be achieved. That said, EDFOS continues focused on controlling the things that we can control. The company is fortunate to have well-established relationships with key customers and suppliers that allow for us to efficiently run our business and deliver vital products to the domestic and global agriculture industry. I remain confident of the long-term opportunities in our industry and in the ability of Eat to Foss to continue to prosper as we move forward.