Itafos Reports Q2 2018 Financial Results and Operational Highlights
ITAFOS REPORTS Q2 2018 FINANCIAL RESULTS AND OPERATIONAL HIGHLIGHTS
TORONTO, ON – August 15, 2018 – Itafos (TSX VENTURE: IFOS) (the “ Company”) reported
today its Q2 2018 financial results and operati onal highlights. The Financial Statements and
Management Discussion and Analysis for the quart er ended June 30, 2018 are available under the
Company’s profile at www.sedar.com and at its website, www.itafos.com. All dollar values are in US
Dollars.
“Q2 was our first full quarter of ownership of Itafos Conda and on July 3 Itafos Arraias achieved
commercial production. Q2 performance was support ed by improving phosphate fertilizer prices and
this trend has continued thus far in Q3. Itafos Conda outperformed its Q1 results despite being down
for several weeks in June for its planned plant turnaround that was completed on schedule and
within budget. During Q3 we expect to realize fu rther improvements in efficiencies and product
quality at Itafos Arraias and we remain focuse d on advancing our key development initiatives,
including extending the life of Itafos Conda and dev eloping our near-term pipeline, which includes
Itafos Paris Hills and Itafos Farim. With the closing of our long-term $165 million credit facility in June
we are well positioned to advance these initiatives.” said Brian Zatarain, CEO of Itafos.
The Company generated revenue of $67.2 million in Q2 2018, compared to $58.1 million in Q1 2018
and $0.0 in Q2 2017. Q2 2018 net income was $1.4 m illion ($0.01 per fully-diluted share), compared
to $62.0 million in Q1 2018 ($0.46 per fully-dilu ted share) and a loss of $6.9 million in Q2 2017
($0.09 loss per fully-diluted share).
Q2 2018 Highlights
Itafos Conda sales included: (i) 75,690 t MAP at $427/t average price, (ii) 32,342 t SPA at
$918/t average price and (iii) 11,938 t APP at $432/t average price
Itafos Arraias sales included: (i) 23,530 t SSP at $137/t average pr ice and (ii) 15,214 t
Sulfuric Acid at $150/t average price
On April 4, 2018, the Company announced the appointment of George Burdette to serve as
Chief Financial Officer
On June 6, 2018, the Com pany closed a $165.0 million secured term credit facility
Itafos Conda completed its planned plant turnaround on schedule and within budget
Subsequent Events
On July 3, 2018, Itafos Arraias achiev ed commercial production as it completed 30
consecutive days of sustainable production at 75% capacity utilization
Q2 2018 Segment Summary
Itafos Conda
Revenues reached $67. 2 million, up 15.6% from $58.1 millio n in Q1 2018 and compared to $0.0
million in Q2 2017. The quarter-over-quarter revenue increase was driven by higher realized fertilizer
prices and increased SPA shipments, which more than offset the effe cts of the June turnaround that
caused reduced MAP shipments rela tive to Q1 2018. Operating income was $14.7 million in Q2
2018, up 9.6% from $13.4 million in Q1 2018 and compared to $0.0 million in Q2 2017 as higher
revenues were partially offset by slightly lower gross margins that were negatively impacted by the
plant turnaround.
Itafos Arraias
SSP volumes rose to 23,530 t in Q2 2018 from 3,501 t in Q1 2018. However, as the facility was still
in development stage during the quarter, re venues were netted against property, plant, and
equipment. Although Itafos Arraias has achieved commerc ial production it will continue to focus on
improving operational efficiencies during the second half of 2018 with particular focus on mass yield,
P2O5 recovery and overall product quality.
Corporate
Corporate SG&A was $5.9 million in Q2 2018, up from $3.0 million in the prior quarter and $2.9
million in the year-ago quarter, primarily driven by non-recurring transaction related expenses.
Liquidity
Cash as at June 30, 2018 was $62.9 million compar ed to $63.7 million as at December 31, 2017.
Short-term debt fell to $0.3 million from $25.5 milli on, and long-term debt rose to $154.8 million from
$0.0 million at December 31, 2017. The increased debt is due to the closi ng of the $165.0 million
secured term credit facility in June 2018. Of the $165.0 million, $90.0 milli on was used to refinance
higher-interest, short-term promissory notes and re lated accrued interest. The net proceeds of the
Facility will be used to fund working capital and other cash requirements of Itafos Conda and Itafos
Arraias, continued implementation of the Company’s business development initiatives.
Outlook
Currently, the Company is executing its strategy by focusing on the following:
integrating and optimizing Itafos Conda
improving Itafos Arraias’ operational efficienc ies during H2 2018 with particular focus on
mass yield, P2O5 recovery and overall product quality
finalizing permitting for Itafos Paris Hills and adv ancing integration efforts with Itafos Conda
finalizing permitting, pursuing off-take alternat ives, selecting contractors and securing project
financing for Itafos Farim
Additional details of the above tr ansactions are publicly available at the Company’s website and at
www.sedar.com under the Company’s profile, including in the Company’s financial statements and
management discussion and analysis.
About Itafos
Itafos is a vertically integrated phosphate based fe rtilizers and specialty products company with an
attractive portfolio of long-term strategic businesses located in key fertilizer markets worldwide.
Itafos is managed by an experienced and diverse team with extensive operations, commercial and
financial expertise. Itafos owns and operates Itafos Conda, a vertically integrated phosphate fertilizer
business which produces approxim ately 540,000 tons per year of mono-ammonium phosphate,
super phosphoric acid, me rchant grade phosphoric acid and specialty produc ts located in Idaho,
U.S. and Itafos Arraias, a vertic ally integrated phosphate fertilize r business with production capacity
of approximately 500,000 tons per year of single super phosphate located in Tocantins, Brazil. Itafos
is developing Itafos Paris Hills, a high-grade phosphate mine project located in Idaho, U.S., Itafos
Farim, a high-grade phosphate mine project locat ed in Farim, Guinea Bissau, Itafos Santana, a
vertically integrated high-grade phosphate fertilizer project located in Pará, Brazil, Itafos Araxá, a
high-grade rare earth oxide and other elements mine project located in Minas Gerais, Brazil and
Itafos Mantaro, a high-grade phosphate mine project located in Junin, Peru.
For more information, please visit http://itafos.com.
Forward-Looking Statements
Certain information contained in this news releas e constitutes forward l ooking information. All
information other than inform ation of historical fact is forward looking informat ion. The use of any of
the words “intend”, “anticipate”, “p lan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”,
“should”, “would”, “believe”, “predict” and “potential” and similar expressions are intended to identify
forward looking information. This information involves known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ mate rially from thos e anticipated in
such forward looking information. No assurance c an be given that this info rmation 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 materia lly from that anticipated by such forward looking information.
Although Itafos has attempted to ident ify important factors that could cause actual results to differ
materially from those contained in forward-looking statements, 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 forw ard-looking statements include, but are not limited
to those risk factors set out in Itafos’ M anagement Discussion and Analysis and other disclosure
documents available under its pr ofile at www.sedar.com. Readers are cautioned that the foregoing
list of risks, uncertainties and assumptions are not exhaustive. The forward looking information
included in this news release is expressly qualified by this cautionary stat ement 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 IT S REGULATION SERVICES PROVIDER (AS
THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, please contact:
Itafos
Robert Winslow
www.Itafos.com
The Blueshirt Group
Gary Dvorchak, CFA
Managing Director
+1 (323) 240-5796