MADISON — Phosphate Holdings Inc. reported a third quarter 2010 profit of $2.5 million, or $0.30 per diluted share of common stock, compared to earnings of $0.7 million, or $0.09 per diluted share of common stock for the same period in 2009.
Total net sales for the third quarter of 2010 were $70.4 million, a 67 percent increase from total net sales of $42.1 million for the third quarter of 2009. During the third quarter, the Company sold 152,500 tons of DAP, all into the domestic market.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2010 was $7.3 million, compared to EBITDA of $3.8 million for the third quarter of 2009. In the third quarter of 2010 and 2009, EBITDA was favorably impacted by litigation settlements, net of related costs, of $0.8 million and $3.0 million, respectively.
During its third fiscal quarter of 2010, production problems impaired the company’s ability to fully participate in a rapidly improving phosphate market. A waste heat boiler in one of the company’s sulfuric acid plants, which failed during June 2010, was repaired by the end of the second quarter; however, collateral damage to other parts of the plant caused by the boiler failure could not be addressed until the scheduled maintenance turnaround currently underway.
For the third quarter, the company’s sulfuric acid production was approximately 187,000 tons, or 77 percent of originally planned levels. Reduced sulfuric acid production had a corresponding unfavorable impact on DAP production, which was approximately 156,000 short tons.
Robert E. Jones, CEO of Phosphate Holdings, said, “In the face of steadily deteriorating instantaneous production rates, our operating and maintenance personnel at Pascagoula did an admirable job of keeping our sulfuric acid plants online. We also did a good job of controlling overall spending for the quarter.
“On Nov. 1, 2010, we commenced a major maintenance turnaround during which we plan to address all known issues constraining sulfuric acid, phosphoric acid and DAP production. During the course of the turnaround, work will be performed on both sulfuric acid plants as well as on the phosphoric acid and DAP plants. The downtime associated with these maintenance activities will adversely impact fourth quarter
operations. For the quarter, we are projecting DAP production of approximately 140,000 to 150,000 tons.”
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