uploads///Phosphate Gross Margins in Q

Key Players’ Phosphate Segment Margins in 1Q17

Adam Jones - Author

Nov. 20 2020, Updated 2:16 p.m. ET

Phosphate segment’s margins

Previously in this series, we looked at prices and shipments for phosphate segments of some of the biggest players in the agricultural fertilizer sector (MOO). With average realized prices for phosphates falling in 1Q17, the margins of these companies’ phosphate segments have also been impacted.

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Overall margins

Average phosphate margins for these companies fell in 1Q17—compared to a year ago. The median gross margin for the above companies’ phosphate segments was 10% as a percentage of segment sales in 1Q16. The median gross margin fell to 5% in 1Q17.

Breakdown by companies

Mosaic (MOS) continued to enjoy higher margins at 7%—compared to Agrium’s (AGU) margins at 5%. Mosaic’s margins were flat year-over-year, while Agrium fell from 15% in 1Q16. PotashCorp (POT) continued to have lower phosphate margins—compared to the above two companies. PotashCorp’s phosphate segment’s margins fell to 4%—compared to 10% in 1Q16.

Falling phosphate prices were the primary contributor to the above companies’ dismal gross margins.

Once again, increased availability of phosphates and weaker demand impacted prices, according to Israel Chemicals (ICL). As a result, competitive pressures had a significant impact on the companies’ margins.

To learn about analysts’ ratings and recommendations for these companies, visit Market Realist’s Agricultural Fertilizers page.


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