Itafos Q3 revenue profit drops on higher sulfur, sulfuric acid costs

Overview

• Phosphate fertilizer producer's Q3 revenue rose 5% yr/yr, driven by higher realized prices

• Adjusted EBITDA and net income fell sharply due to higher sulfur and sulfuric acid costs

• Company amended and extended credit facilities to enhance financial flexibility

Outlook

• Itafos revised FY 2026 maintenance capex guidance to $25-28 mln, up from $23-28 mln

• Company lowered FY 2026 growth capex guidance to $63-73 mln from $63-83 mln

• Itafos expects phosphate prices to remain elevated through 2026 and 1H 2027 due to supply constraints

Result Drivers

• HIGHER RAW MATERIAL COSTS - Co said elevated sulfur and sulfuric acid costs, driven by global supply chain disruptions from the war in Iran, weighed on margins and earnings

• PRODUCTION OUTAGE - Temporary sulfuric acid plant outage at Conda reduced production volumes in Q3

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the agricultural chemicals peer group is "buy"

• Wall Street's median 12-month price target for Itafos Inc is C$3.75, about 75.2% above its November 4 closing price of C$2.14

• The stock recently traded at 26 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• Nov 4 - Nutrien misses Q3 profit estimates on high sulfur costs, to close Florida plant

• Nov 4 - Canada's Nutrien Q3 profit misses estimates on higher costs, lower crop nutrient sales

• Nov 3 - Mosaic Q3 adjusted loss misses estimates as lower volumes, raw material costs cut EBITDA

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)