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Dec 31, 2023
Compass Minerals Q1 2024 Earnings Report
Compass Minerals' first quarter of fiscal year 2024 was affected by mild weather and the termination of the lithium project, while the company is refocusing on core Salt and Plant Nutrition businesses to improve cash flow and returns.
Key Takeaways
Compass Minerals reported a net loss of $75.1 million for the first quarter of fiscal year 2024, impacted by a $77.3 million expense related to the termination of its lithium project. Despite weak winter weather, the Salt business saw a 7% increase in operating earnings and an 8% increase in adjusted EBITDA. Plant Nutrition sales volumes increased by 67%, but lower average sales prices affected profitability.
Adjusted EBITDA was $59.4 million with similar margins year over year.
Salt business operating earnings increased 7% year-over-year, with adjusted EBITDA per ton improving by 33% to $23.01.
Plant Nutrition sales volumes increased 67% year over year due to normalized demand in core West Coast markets.
2024 capital expenditure guidance reduced by 6% at midpoint, reflecting a move to reduce capital intensity and improve returns.
Compass Minerals
Compass Minerals
Compass Minerals Revenue by Segment
Revenue by Segment
Salt Segment Revenue
CapyFin.comPlant Nutrition Revenue
CapyFin.comCorporate & Other Revenue
CapyFin.com Forward Guidance
Compass Minerals provided its 2024 outlook for the Salt, Plant Nutrition and Corporate segments. Salt guidance is dependent on winter weather conditions and will be revisited after the deicing season. Plant Nutrition guidance was adjusted to reflect revised market and operational conditions. Corporate guidance includes Fortress contribution and lithium-related costs.
Positive Outlook
- Management continues to expect Salt financial results will fall within the provided range.
- Total capital expenditures for the company in 2024 are expected to be within a range of $120 million to $130 million, down $7 million from prior expectations.
- The company expects the full year impact for Lithium to be approximately $5 million.
- FR-105 HV achieved fully qualified status on the USFS's Qualified Product List.
- The company will revisit guidance for the Salt business following the completion of the highway deicing season.
Challenges Ahead
- Plant Nutrition guidance is being adjusted to reflect revised market and operational conditions that could impact the business.
- Muriate of potash (MOP) prices continue to be under pressure in the market, which as a potential substitute impacts the pricing of the company's sulfate of potash (SOP).
- Continuing weakness in fertilizer pricing is resulting in buyers deferring purchases in anticipation of lower prices, which adds risk to the company's sales outlook.
- First-quarter pond-based production tracked toward the lower end of the company's initial projections.
- Changes to the calendar 2024 solicitation package by the USFS resulted in a delay in the contracting process.
Revenue & Expenses
Visualization of income flow from segment revenue to net income