Clarification on the path to 8 million tonnes of phosphate production, current operating factors, and how the $112/tonne conversion cost relates to the 7 million+ tonne guidance.

Bruce Bodine detailed operating factors for Bartow, Louisiana, and Riverview (all near 80% or above), with New Wales expected to reach 80% after its Q1 turnaround. Luciano Pires explained that the $112/tonne conversion cost is appropriate for current volumes, and every 100k tonnes/quarter increase in production could reduce costs by $7-8/tonne, implying a $20-25/tonne decline from 1.7M to 2.0M tonnes. “The $112 per tonne in phosphates is where it should be given the current production volumes. The $131 of Q3 was actually very abnormal because of lots of repairs done outside of turnarounds. And the rule of thumb is every 100,000 tonnes per quarter should represent kind of a $7 to $8 decline through cost absorption on this $112.”

What caused the unexpected CapEx increase for 2026, and why is there excess phosphate rock inventory, and how will it be reduced?

Bruce Bodine explained the CapEx increase is due to an unusual confluence of required waste disposal projects (gyp stacks, clay settling areas, tailings dam) hitting simultaneously in 2026, but expects CapEx to trend down to $1 billion by 2030. Luciano Pires clarified that excess rock inventory (approx. $170-180 million) resulted from lower fertilizer production in 2025 and will be released as production rates increase. “We had an interesting confluence this year of a number of waste disposal projects in gyp stacks and clay settling areas and tailings dam in Brazil as well that have all kind of hit from a timing standpoint at the same time. That is unusual.”

Given Brazil's credit challenges and curtailed phosphate production, how should investors think about the volume outlook for Mosaic Fertilizantes in 2026, especially compared to prior expectations of 10-10.8 million tonnes?

Bruce Bodine reiterated commitment to Brazil but acknowledged credit issues. Jenny Wang stated that the overall Brazilian fertilizer market is likely to be flat in 2026, and Mosaic will make prudent decisions on sales to avoid credit risk. Luciano Pires highlighted the resilience of the business, generating nearly $50 million EBITDA in Q4 despite significant curtailments and margin compression. “For 2026, we foresee this is going to be a challenging year as we go through this process. Therefore, if you think about the overall fertilizer shipment in the country, we may see some uncertainties which, a, related to the farm economics and affordability; b, probably also related to the supply availability, especially on phosphate with the restriction of the Chinese export.”

MOS

MOSAIC (MOS) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Materials· Feb 25, 2026

Source: earnings call transcript

Executive summary

The Mosaic Company Q4 FY25 — Phosphate Production Recovery & Cost Savings Drive 2026 Outlook

The Mosaic Company navigated a challenging Q4 FY25 marked by soft U.S. phosphate demand and rising sulfur costs, impacting cash flow and net debt. Despite these headwinds, the company is focused on operational stability, cost reduction, and strategic capital allocation, positioning for improved phosphate production and significant working capital release in FY26. Management remains optimistic about global agricultural fundamentals and the long-term potential of its Biosciences segment.

Highlights

Phosphate production expected to reach at least 7 million tonnes in 2026, with Bartow and Louisiana facilities running at 80%+ operating factor.
Achieved $150 million cost savings objective ahead of schedule in 2025, with another $100 million targeted for 2026.
Mosaic Biosciences doubled net sales to $68 million in 2025 and expects to double again in 2026 with 8-10 new product launches.
Divested noncore assets (Patos de Minas, Taquari, Carlsbad pending) expected to generate $170 million in proceeds and reduce asset retirement obligations by $60 million.
International DAP market showing price increases over 5 weeks, with netbacks at a premium to NOLA prices, allowing for strategic pivot.

Concerns

Fourth quarter demand weaker than expected due to U.S. phosphate demand, pressured by affordability challenges and government support uncertainty.
Working capital reduced cash flow by $960 million in 2025 and contributed to an $829 million increase in net debt.
Sharp increase in sulfur prices since December expected to create a $250 million headwind to Q1 FY26 EBITDA compared to prior year.
Idled Arax and Fospar operations in Brazil due to margin pressure from high sulfur prices, impacting full-year sales volume guidance for Mosaic Fertilizantes.
CapEx expected to be around $1.5 billion in 2026, higher than 2025, due to a confluence of required gyp stack and clay settling area expansions.

Guidance & targets

Category	Target	Timeline	Confidence
Phosphate production	at least 7 million tonnes high materiality	FY26	High
Potash production	around 9 million tonnes high materiality	FY26	High
Cost savings	$100 million medium materiality	FY26	High
Mosaic Biosciences net sales growth	doubling net sales medium materiality	FY26	High
Capital expenditures	around $1.5 billion high materiality	FY26	Medium
Long-term capital expenditures	approximately $1 billion high materiality	FY30	High
Long-term ARO and environmental reserve cash spending	about $200 million medium materiality	FY30	High
Free cash flow generation	above the minimum dividend high materiality	FY26	High
Working capital release	$300 million to $500 million high materiality	FY26	High
EBITDA to cash flow from operations conversion rate	meaningful improvement medium materiality	FY26	High
Q1 FY26 EBITDA headwind from sulfur prices	roughly $250 million high materiality	Q1 · FY26	High
Mosaic Fertilizantes sales volumes	not providing guidance medium materiality	FY26	Low

Segment performance

Segment	Revenue	YoY	QoQ	Margin
U.S. Phosphate Business Invested time and money across assets to set up for reliably strong production. Bartow facility had an extended turnaround and production was adjusted due to soft U.S. demand. P2O5 production improved during the yearPhosphate fertilizer production rose through the yearQ4 production: 1.7 million tonnes	—	—	—	—
Potash Expect to achieve record production at Esterhazy in 2026. International sales volume set a record last yearFull operating rates at Esterhazy since December fatalityHydroFloat project ramping up	—	—	—	—
Mosaic Fertilizantes (Brazil) Delivered cost improvements through increased mine production and elimination of high-cost imported rock. Idled Arax and Fospar due to margin pressure from sulfur prices. Rock output reached near record levels in 2025Blended rock cost per tonne: $97 (lowest since 2021)	—	—	—	almost $50 million
Mosaic Biosciences Capitalizing on R&D investments, expanding commercialization in Americas, China, and India. Future product launches expected to provide pathway to higher margins. 5 new products launched in 202560+ registrationsselling into 16 countries	$68 million	doubled	—	40s (gross margins)

MOS operating KPIs by quarter

MOS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Production volume Phosphate	1.7M tons We produced 1.7 million tonnes in the fourth quarter even with an extended turnaround at our Bartow facility as well as deliberate steps to adjust production amid soft US demand. Source: earnings call transcript	—	1.4M tons During the second quarter, we produced and sold 1.4 million tonnes of phosphate despite all the turmoil in the market. Source: earnings call transcript	—
Shipments Phosphate	—	1.9M tons In phosphate, we sold 1.9 million tonnes in the first quarter as deferred demand from the end of 2025 returned. Source: earnings call transcript	1.4M tons During the second quarter, we produced and sold 1.4 million tonnes of phosphate despite all the turmoil in the market. Source: earnings call transcript	-26.3%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
5 new products	launch	2025
8 to 10 new product launches	roadmap	2026

Deals & partnerships

null sale of noncore assets

Part of a capital allocation program to focus attention and capital where it matters. Includes Patos de Minas and Taquari.

null sale of noncore asset

Part of a capital allocation program to focus attention and capital where it matters. Refers to the Carlsbad transaction.

Capital programs

Palmeirante blending facility completed

Benefit:1 million tonne blending capacity

In 2025, we expanded our Brazil distribution capacity with the completion of a 1 million tonne blending facility in Palmeirante in the fast-growing agriculture region in northern Brazil.

Gyp stack expansions underway

We have a gypsum stack at New Wales, a gypsum stack at Bartow, a gypsum stack in Louisiana, all happening in 2026.

Clay settling area expansions underway

We have 2 clay settling areas, one winding down and another one being built at Four Corners.

Tailings dam (Tapira) underway

We have a tailings dam at Tapira.

Risks & headwinds

U.S. phosphate demand weakness Q4 FY25, impacting FY25 overall

down 14-15% in North America for FY25

Mitigation:Emerging spring inquiries, global ag fundamentals solid, ability to pivot sales to international markets.

Sulfur price spike Q4 FY25, well into H1 FY26

expected $250 million headwind to Q1 FY26 EBITDA; every $10 increase adds $10 million quarterly expense

Mitigation:Idled Arax and Fospar (lowest margin operations), focus on increasing phosphate production for better fixed cost absorption, expectation for sulfur prices to moderate.

Brazil credit constraints ongoing, expected to be challenging in 2026

Mosaic Fertilizantes Q4 EBITDA almost $50 million despite significant curtailment and margin compression

Mitigation:Prudent sales decisions to avoid credit risk, focus on business quality, long-term optimism due to expanding planted acreage and rising crop yields.

Working capital impact on cash flow FY25

reduced cash flow by $960 million for FY25; contributed to an $829 million increase in net debt

Mitigation:Expected $300-500 million working capital release in FY26 from demand recovery and higher phosphate production.

CapEx increase in 2026 FY26

$1.5 billion

Mitigation:Partially offset by $50 million decline in ARO/environmental reserve spending; CapEx expected to trend down to $1 billion by 2030.

What to watch in Q1 FY26

Phosphate production operating factor

Q2 FY26

Current Bartow & Louisiana 80%+, Riverview mid-70s, New Wales in turnaround

Target New Wales approaching 80% after turnaround

Why it matters

Achieving target operating factors at all facilities is key to reaching 8 million tonnes of phosphate production and improving cost absorption.

New Wales is in a turnaround as we speak. We expect as they come out of turnaround into quarter 2 that they will be approaching that 80%.

Find out whether MOS delivers this. Inve re-checks your case every morning.

Q&A highlights

Will Mosaic be able to pass through higher sulfur costs to farmers, and will farmers accept these prices given affordability challenges, or will they forgo DAP applications?

Bruce Bodine acknowledged farmer affordability challenges but noted that stripping margins above $300/tonne are still constructive. He expects sulfur prices to moderate after Q1. Jenny Wang highlighted that international DAP prices are rising and are at a premium to NOLA, indicating a disconnect from the U.S. market and allowing Mosaic to pivot sales.

“I don't know that we'll be able to pass-through as much as maybe historically in a tight market given the affordability issues. But we do see, at least for us, anything above a stripping margin above $300, we still see very constructive being in the middle of the cost curve.”

asked by Patrick Fischer · answered by Bruce Bodine

2 min read 6 chapters

Detailed narrative

Market Conditions & Outlook

Despite a tough Q4 FY25 driven by weak U.S. phosphate demand, global agricultural fundamentals remain solid. U.S. demand is emerging for spring planting, while global potash shipments are expected to approach record levels in FY26. China's continued restriction on phosphate exports and increasing demand for lithium iron phosphate batteries are creating supportive supply/demand dynamics for phosphate.

Operational Stability & Cost Management

Mosaic made significant progress in restoring operational stability, particularly in U.S. phosphate production, with facilities like Bartow and Louisiana achieving 80%+ operating factors. The company achieved its $150 million cost savings target in FY25 and aims for another $100 million in FY26 through technology-enabled initiatives and supply chain optimization.

Brazil Operations & Market Dynamics

Credit constraints in Brazil continue to challenge the market, leading to a more conservative approach to sales volumes and the idling of lower-margin operations (Arax and Fospar). However, management remains committed to the Brazilian market, citing expanding planted acreage and rising crop yields as long-term drivers.

The platform demonstrated resilience by generating nearly $50 million in EBITDA in Q4 FY25 despite significant curtailments and margin compression.

Mosaic Biosciences Growth

Mosaic Biosciences is highlighted as a promising growth story, doubling net sales to $68 million in FY25 and expecting to double again in FY26. The business benefits from Mosaic's global market access and customer relationships, with 5 new products launched in FY25 and 8-10 anticipated in FY26, expanding registrations to over 60 in 16 countries.

Capital Allocation & Portfolio Reshaping

The company continues to reallocate capital for stronger returns, divesting noncore assets like Patos de Minas, Taquari, and Carlsbad (pending), which are expected to generate $170 million in proceeds and reduce asset retirement obligations by $60 million. Strategic alternatives for selected Brazilian assets and monetization of Florida land holdings are also being pursued to unlock further value.

Ma'aden Equity Valuation

Mosaic's position in Ma'aden equity is currently valued at approximately $2.1 billion, demonstrating significant value generated from past capital allocation decisions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.