Mosaic Q2 2025 presentation: Net income surges to $411M amid strategic shifts

Introduction & Market Context

The Mosaic Company (NYSE:MOS) presented its second quarter 2025 results on August 5, 2025, reporting a significant financial turnaround with net income reaching $411 million, compared to a loss of $162 million in the same period last year. The fertilizer producer demonstrated strong performance across its segments, supported by favorable market conditions and strategic initiatives.

The company’s stock closed at $35.52 on the day of the presentation, showing a modest gain of 0.45%. Year-to-date, Mosaic has delivered an impressive 25.02% return, reflecting investor confidence in the company’s direction despite ongoing market challenges.

Quarterly Performance Highlights

Mosaic reported consolidated revenues of $3,006 million for Q2 2025, with adjusted EBITDA of $566 million and operating earnings of $244 million. This represents a substantial improvement from Q1 2025, when the company reported revenue of $2.62 billion and adjusted EBITDA of $544 million.

As shown in the following comprehensive financial overview:

The company’s performance was driven by strong pricing in the phosphate segment, where Q2 prices exceeded initial guidance with realized stripping margins surpassing $500 per tonne. However, idle and turnaround expenses were $66 million higher year-over-year, impacting overall profitability.

Segment Analysis

Mosaic’s phosphate segment generated net revenues of $1,173 million in Q2 2025, but reported an operating loss of $8 million. Despite the operating loss, the segment achieved adjusted EBITDA of $217 million. The company noted that larger-than-usual provisions for legal and environmental reserves, land reclamation, and other items resulted in a $34 million negative impact to Q2 results.

The detailed breakdown of the phosphate segment performance is illustrated here:

The potash segment delivered strong results with net revenues of $711 million, operating earnings of $194 million, and adjusted EBITDA of $278 million. The company raised its potash production volume guidance to the 9.3-9.5 million tonne range, supported by operational improvements including the Hydrofloat project, which produced its first potash tonnes in July and added 400,000 tonnes of annual milling capacity.

The potash segment’s performance metrics are detailed in this overview:

Mosaic Fertilizantes reported net revenues of $1,175 million, operating earnings of $109 million, and adjusted EBITDA of $159 million. The company expects Q3 adjusted EBITDA for this segment to exceed $200 million, supported by the completion of the Palmeirante blending facility in July, which will contribute to Mosaic’s long-term growth plan in Brazil.

The following chart illustrates the Mosaic Fertilizantes segment results:

Strategic Initiatives

Mosaic has made significant progress on its strategic initiatives, focusing on four key areas: normalizing production and costs, reallocating capital, leveraging market access, and redefining growth. The company achieved its $150 million cost reduction target and has expanded the target to $250 million, demonstrating its commitment to operational efficiency.

The company’s strategic framework and achievements are presented in this overview:

The cost reduction program has been particularly successful, with $161 million in cost savings achieved by the end of June 2025. The expanded target of $250 million in savings by 2026 represents an additional $90 million in projected savings, as shown in the following chart:

Mosaic’s growth strategy in Brazil is supported by the recently completed Palmeirante blending facility, which will contribute one million tonnes of blending capacity. The company expects Mosaic Fertilizantes sales volumes to grow from 9.2 million tonnes in 2024 to 13-14 million tonnes by 2027, capitalizing on the expanding Brazilian agricultural market.

Mosaic Biosciences has shown promising growth, with revenue doubling in the first half of 2025 compared to the same period last year. The company expects this segment to positively contribute to adjusted EBITDA in the fourth quarter of 2025, with long-term aspirations of generating $250-500 million in adjusted EBITDA.

The progress and milestones for Mosaic Biosciences are illustrated in this roadmap:

Forward Guidance

For Q3 2025, Mosaic provided guidance for phosphate sales volumes of 1.8-2.0 million tonnes with DAP prices (FOB Plant) of $700-720 per tonne. Potash sales volumes are expected to be 2.2-2.4 million tonnes with MOP prices (FOB Mine) of $270-290 per tonne.

The detailed Q3 2025 guidance is presented here:

For the full year 2025, Mosaic expects phosphate production volumes of 6.9-7.2 million tonnes, potash production volumes of 9.3-9.5 million tonnes, and Mosaic Fertilizantes sales volumes of 10.0-10.8 million tonnes. Total (EPA:TTEF) capital expenditures are projected to be $1.2-1.3 billion.

The company anticipates significant free cash flow generation through the balance of the year, which will be allocated to reducing debt, paying dividends, and repurchasing shares. In Q2 2025, Mosaic generated $305 million in free cash flow and reduced net debt by $213 million, demonstrating its commitment to strengthening its financial position.

CEO Bruce Bodine had previously emphasized the company’s efforts to improve phosphate asset reliability, a focus that appears to be yielding results as shown in the Q2 presentation. The company’s market access, particularly in Brazil, continues to be highlighted as a significant strategic advantage in navigating the global fertilizer market.

With rising prices and elevated stripping margins in the phosphate market, combined with strong global demand for both phosphate and potash, Mosaic is well-positioned to capitalize on favorable industry conditions while executing its strategic initiatives to drive long-term growth and shareholder value.

Full presentation:

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