Itafos Reports Q1 2019 Financial Results and Operational Highlights
ITAFOS REPORTS Q1 2019 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS
TORONTO, ON – May 16, 2019 – Itafos (TSX VENTURE: IFOS) (the “Company”) reported today its
Q1 2019 financial results and operational highlights. The Finan cial Statements and Management’s
Discussion and Analysis for the quarter ended March 31, 2019 ar e available under the Company’s
profile at www.sedar.com and under the Investors – Financ ial Statements page of the Com pany’s
website, www.itafos.com. All dollar values are in US Dollars.
Itafos Conda continues to operate well, with Q1 2019 fertilizer production volumes up more than 10%
year-over-year. This solid pr oduction, coupled with higher year -over-year fertilizer prices, helped to
offset the unusually cold and wet weather conditions across key growing areas of the US, which
caused many growers to defer fertilizer purchases into Q2 2019. Itafos Conda generated revenues of
$69.3 million and Adjusted EBITDA of $11.5 million in Q1 2019.
The Company continues to work tow ard implementing the repurpose plan at Itafos Arraias aimed at
optimizing finished fertilizer production with a multi-product portfolio of higher grade SSP, micronutrient
SSP and value added premium PK compound products. To enable the repurpose plan, the Company
is focusing on procuring higher -grade phosphate rock from third parties and, once operational, from
Itafos Farim.
Lastly, the Company c ontinues to focus on extending Itafos Cond a’s mine life by further advancing
our nearby development projects, Itafos Paris Hills and Itafos Husky 1/North Dry Ridge, and continuing
to de-risk Itafos Farim.
Q1 2019 Highlights
For the three months ended March 31, 2019 and 2018, the Compan y’s financial highlights were
as follows:
For the three months ended March 31,
(unaudited in millions of US Dollars except for per share amounts) 2019 2018
Revenues, net $ 73.2 $ 58.1
Adjusted EBITDA 0.9 9.4
Net income (13.3 ) 51.3
Maintenance capex $ 5.2 $ 1.7
Growth capex 3.0 7.1
Basic income (loss) per share $ (0.09 ) $ 0.37
Fully diluted income (loss) per share $ (0.09 ) $ 0.36
As at March 31, 2019 and Decem ber 31, 2018, the Company’s financial highlights were as
follows:
(unaudited in millions of US Dollars)
March 31,
2019
December 31,
2018
Total assets $ 575.3 $ 576.4
Total liabilities 316.9 304.6
Net debt 160.2 152.1
Total equity 258.5 271.8
For the three months ended March 31, 2019 and 2018, Itafos Con da’s sales volumes and prices
were as follows:
For the three months ended March 31,
2019 2018
Sales volumes (t)
MAP 76,877 86,174
SPA 33,444 26,155
MGA 30 —
APP 2,448 —
Realized price ($/t)
MAP 448 405
SPA 1,006 887
MGA 950 —
APP 472 —
For the three months ended Ma rch 31, 2019 and 2018, Itafos Arr aias’ sales volumes and prices
were as follows:
For the three months ended March 31,
2019 2018
Sales volumes (t)
SSP 7,133 –
SSP+ 5,903 –
Sulfuric acid 8,794 –
Realized price ($/t)
SSP 165 –
SSP+ 229 –
Sulfuric acid 153 –
On December 12, 2018, the Com pany received conditional accepta nce from the TSXV to
commence a Normal Course Issuer Bid (“NCIB”). As at March 31, 2 019, the Company
repurchased 1,478,500 shares through the NCIB.
Subsequent events
Subsequent to March 31, 2019 and as at May 16, 2019, the Compa ny repurchased an additional
39,000 shares through the NCIB.
Subsequent to March 31, 2019, the Company cancelled 1,517,500 shares repurchased through
the NCIB.
On April 15, 2019, the Compan y announced the appointment of Dr . Wynand van Dyk as Vice
President of Operations, effective May 1, 2019.
On May 8, 2019, the Company anno unced the retirement of Marten Walters, Vice President of
Engineering, effective May 1, 2019. Dr. Wynand van Dyk will assume Mr. Walters’ responsibilities.
Q1 2019 Segment Summary
Itafos Conda
The Company acquired Itafos Conda on January 12, 2018. Lower year-over-year MAP sales volumes
were more than offset by higher year-over-year SPA sales volume s and fertilizer prices, driving Q1
2019 revenues of $69.3 million versus Q1 2018 revenues of $58.1 million. Higher ore, natural gas and
sulfuric acid input costs reduc ed Adjusted EBITDA to $11.5 mill ion in Q1 2019 from $13.4 million in
Q1 2018.
Itafos Arraias
Itafos Arraias achieved commercial production on July 3, 2018. Despite having achieved commercial
production, Itafos Arraias experienced operational challenges p ost declaration of commercial
production resulting in lower tha n optimal levels of capacity u tilization. Constrained production
volumes due to the transition to a repurpose plan at Itafos Arr aias drove Q1 2019 revenues of $3.9
million compared to $0 in Q1 2018, and Adjusted EBITDA of $(7.6 ) million in Q1 2019 compared to
$(2.0) million in Q1 2018.
Other
The Company’s development and exploration Adjusted EBITDA was $(0.4) million in Q1 2019 versus
$(0.6) million in Q1 2018, while corporate Adjusted EBITDA was $(2.5) million in Q1 2019 and $(1.4)
million in Q1 2018. The decline in c orporate Adjusted EBITDA ye ar-over-year was primarily due to
increased payroll expense.
Liquidity
The Company’s net debt at Mar ch 31, 2019 was $160.2 million as compared to $152.1 million at
December 31, 2018. The increase in net debt was primarily due t o additional equipment financing at
Itafos Conda and capitalization of in-kind interest expense.
Outlook
Currently, the Company is executing its strategy by focusing on the following:
extending Itafos Conda’s current mine life through advancing p ermitting of Itafos Paris Hills and
Itafos Husky 1/North Dry Ridge and pursuing other alternatives;
implementing the repurpose plan to optimize Itafos Arraias’ fi nished fertilizer production with a
multi-product portfolio of higher grade SSP, micronutrient SSP and value added premium PK
compound products and procuring higher-grade phosphate rock fro m third parties and, once
operational, from Itafos Farim for Itafos Arraias; and
finalizing permitting, negotiati ng offtake agreements, selecti ng contractors and securing project
financing for Itafos Farim.
Additional details are available under the Company’s profile at www.sedar.com and on the Company’s
website, www.itafos.com.
About Itafos
Itafos is a vertically integrated phosphate fertilizers and specialty products company with an attractive
portfolio of long-term strategic businesses and projects locate d in key fertilizer markets worldwide.
Itafos is managed by an experienc ed and diverse team with exten sive operations, commercial and
financial expertise. Itafos owns and operates Itafos Conda, a vertically integrated phosphate fertilizer
business with production and sale s capacity of approximately 55 0kt per year of monoammonium
phosphate (“MAP”), superphos phoric acid (“SPA”), merchant grade phosphoric acid (“MGA”) and
specialty products including a mmonium polyphosphate (“APP”) loc ated in Idaho, US and Itafos
Arraias, a vertically integrat ed phosphate fertilizer business with production and sales capacity of
approximately 500kt per year of single superphosphate (“SSP”), SSP with micronutrients (“SSP+”)
and other products and approximately 40kt per year of excess sulfuric acid located in Tocantins, Brazil.
Itafos owns and is developing Itafos Paris Hills, a high-grade phosphate mine project located in Idaho,
US, Itafos Farim, a high-grade phosphate mine project located i n Farim, Guinea-Bissau, Itafos
Santana, a vertically integrated high-grade phosphate mine and fertilizer plant project located in Pará,
Brazil, Itafos Mantaro, a large phosphate mine project located in Junin, Peru, and Itafos Araxá, a
vertically integrated rare earth elements and niobium mine and extraction plant project located in Minas
Gerais, Brazil.
For more information or to join our mailing list to receive not ification of future press releases, please
visit the Company’s website, www.itafos.com.
Non-IFRS Financial Measures
The Company considers both IFRS and certain non-IFRS measures t o assess performance. Non-
IFRS measures are a numerical measure of a company’s performance, that either include or exclude
amounts that are not normally included or excluded from the most directly comparable IFRS measures.
In evaluating non-IFRS measures, investors, analysts, lenders and others should consider that non-
IFRS measures do not have any standardized meaning under IFRS and that the methodology applied
by the Company in calculating such non-IFRS measures may differ among companies and analysts.
The Company believes the non-IFRS measures provide useful supplemental information to investors,
analysts, lenders and others in or der to evaluate the Company’s operational and financial
performance. These non-IFRS fi nancial measures should not be co nsidered as a substitute for, nor
superior to, measures of financial performance prepared in accordance with IFRS.
The Company defines:
“Adjusted EBITDA” as earnings before interest, taxes, deprecia tion, depletion and amortization
adjusted for non-cash, extraordinary, non-recurring and other i tems unrelated to the
Company’s core operating activities;
“Total capex” as additions to property, plant and equipment an d mineral properties adjusted
for additions to asset retirement obligations, additions to rig ht of use assets and capitalized
interest;
“Maintenance capex” as that por tion of total capex relating to maintenance of ongoing
operations of the Company;
“Growth capex” as that portion of total capex relating to deve lopment of growth opportunities
of the Company;
“Realized price” as revenues, net divided by sales volumes; and
“Net debt” as debt and debentures less cash and cash equivalen ts and short-term investments.
Forward Looking Information
Certain information contained in this news release constitutes forward looking information. All
information other than informati on of historical fact is forwar d looking information. The use of any of
the words “intend”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”,
“would”, “believe”, “predict” and “potential” and similar expre ssions are intended to identify forward
looking information. This info rmation involves known and unknow n risks, uncertainties and other
factors that may cause actual res ults or events to differ mater ially from those anticipated in such
forward looking information. No assurance can be given that thi s information will prove to be correct
and such forward looking information included in this news release should not be unduly relied upon.
Forward looking information is subject to a number of risks and other factors that could cause actual
results and events to vary materi ally from that anticipated by such forward looking information.
Although the Company has attempt ed to identify important factor s that could cause actual results to
differ materially from those c ontained in forward-looking state ments, there may be other factors that
cause results not to be as anticipated, estimated or intended. Factors that may cause actual results to
differ materially from expected results described in forward-lo oking statements include, but are not
limited to, those risk factors set out in the Company’s Management Discussion and Analysis and other
disclosure documents available under the Company’s profile at www.sedar.com. Readers are
cautioned that the foregoing list of risks, uncertainties and a ssumptions are not exhaustive. The
forward looking information in cluded in this news release is ex pressly qualified by this cautionary
statement and is made as of the date of this news release. Itafos undertakes no obligation to publicly
update or revise any forward looking information except as required by applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PR OVIDER (AS
THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANG E) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Itafos
Robert Winslow
www.itafos.com