MADISON — Phosphate Holdings Inc. reported first quarter 2010 net income of $2.6 million, or $0.31 per share of common stock, compared to net loss of $11.6 million, or $1.51 per share of common stock for the same period in 2009.
Net sales for the first quarter of 2010 were $60.1 million, an 11 percent increase over net sales of $54.3 million for the first quarter of 2009. The average sales price per short ton of DAP for the first quarter of 2010 was $415, which represented a 50 percent increase over the fourth quarter of 2009 average sales price per short ton of DAP, which was $276. Due to the accounting treatment afforded certain transactions during the first quarter of 2009, a comparison of first quarter 2009 and first quarter 2010 per-ton prices is not meaningful.
During the first quarter of 2010, the company sold 142,928 short tons of DAP, with 102,868 short tons moving into export markets. The company achieved operating income of $4.2 million for the first quarter of 2010, compared to operating losses of $18.3 million for the prior-year period.
Earnings before interest, taxes, depreciation and amortization and other non-cash charges (EBITDA) for the first quarter of 2010 were $7.2 million, compared to negative EBITDA of $15.9 million for the first quarter of 2009. Of the $15.9-million negative EBITDA for the first quarter of 2009, $15.3 million was attributable to the write-down of inventory values and the recognition of unrealized losses on firm raw material purchase commitments.
Robert E. Jones, CEO, said, “The first quarter of 2009 saw substantial improvements in phosphate demand and prices. After the unprecedented contraction in phosphate demand that occurred during 2009, U.S. farmers returned to the market and fertilizer application rates increased. Offshore phosphate demand has also firmed, based largely on very large purchase commitments by India. During the course of the quarter, DAP prices ranged from $334 per short ton (FOB, NOLA) at the beginning of the quarter, to a high of $428 per short ton (FOB, NOLA) during mid-March of 2010.
“With the improvements in DAP demand and price, we experienced raw material input cost increases and, in the case of sulfur, availability issues. Changes in oil refinery feedstock and product mix and the resurgence of phosphate demand led to shortages of sulfur at various locations around the world. With supplies tight, sulfur prices (CFR, Tampa) rose from $30 per long ton in the fourth quarter of 2009 to $90 per long ton in the first quarter of 2010. For the second quarter of 2010, sulfur prices settled at $145 per long ton. While ammonia availability has not been an issue, prices delivered to the U.S. Gulf increased from $300 per metric ton (CFR, Tampa) at Jan.1, 2010, to $450 per metric ton, (CFR, Tampa) in March 2010. During the second quarter ammonia prices (CFR, Tampa) have declined to $405 per metric ton.”