Re: MAK - Minemakers
Mississippi Phosphates produces record earnings
Wednesday, August 27, 2008
By APRIL M. HAVENS
Phosphate Holdings Inc. this week announced $35 million in record second quarter earnings, a 349 percent jump from $7.8 million in earnings during the same period last year.
Phosphate Holdings Inc. is the sole stockholder of Mississippi Phosphates Corp., which owns and manages a diammonium phosphate production facility that employs about 220 people in Pascagoula.
Diammonium phosphate is a water-soluble ammonium phosphate salt that is commonly used as a fertilizer, among other uses.
During Tuesday's earnings conference call, CEO Robert Jones said the company "just had a great quarter."
The company sold 162,427 tons of diammonium phosphate in the second quarter of 2008 as compared to 103,917 tons in 2007, the financial data showed.
Net sales in the second quarter were $171.5 million, up 192 percent of second quarter 2007's $58.8 million, which was due in part to a 183 percent increase in the average sales price of diammonium phosphate over the last year.
Currently, the average price is $1,049 per short ton. In 2007, diammonium phosphate cost about $371 per ton, Jones said.
This price increase of diammonium phosphate is historical, Jones said, but the prices have not yet responded to the sharp rise in the cost of ammonia, sulfur and phosphate rock.
For example, the cost of ammonia, Jones said, has gone from about the high $500s last year to about $750 per ton currently.
Diammonium phosphate is manufactured from phosphate, sulfuric acid and ammonia. The company makes its own sulfuric acid, but it purchases the other ingredients.
Earnings for the first half of this year were $42 million, or $5.19 per fully-diluted share of common stock. During that same time period last year, Phosphate Holdings posted $33.7 million in earnings, or $4.40 per share, the company's second quarter report said.
Net sales from January to June this year were $238.7 million, a 117 percent increase over 2007's $109.9 million in the same time period.
Despite hikes in ammonia and phosphate rock, the company is optimistic that increased international demand for diammonium phosphate will keep it healthy during the summer, a historically slower season.
Stephen Wehmann, vice president of sales and marketing, said during the conference call areas such as India, Russia, China and South America, in particular Brazil, will demand more product in the coming quarter.
India alone is expected to import 400,000 to 600,000 tons of diammonium phosphate between now and November, he said.
Reporter April Havens can be reached at
ahavens@themississippipress.com or 228-934-1478