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IW Business Bulletin – August 5, 2022

Mosaic and Nutrien release Q2 2022 results

The Mosaic Company (Mosaic) reported its Q2 2022 results on Aug .5, seeing $1.0 billion in net income for the quarter. Revenues in Q2 rose by 92 per cent from the same time a year earlier, reaching $5.4 billion. Mosaic’s adjusted EBITDA hit $2.0 billion, up from the prior year period total of $829 million.

“Mosaic’s second quarter results demonstrate the strength of the business,” said Joc O’Rourke, Mosaic’s president and CEO. “We are expanding production to help meet global demand and returning significant capital to shareholders. We expect strong fundamentals will continue for the rest of the year and into 2023.”

Mosaic also reported that the company expects tight grain and oilseed markets to continue this year and into 2023 due to the ongoing conflict in Ukraine, hot weather in North America and Europe and developing drought conditions in South America. As well, supply issues remain for potash and phosphates because of ongoing export issues in Belarus and China.

Aug. 3 saw Nutrien delivers its Q2 2022 results, with net earnings of $3.6 billion and adjusted EBITDA of $5.0 billion.

“Nutrien delivered record earnings in the first half of 2022 due to the strength of market fundamentals, strong operating performance, the advantaged position of our global production assets and the excellent results of Retail. We generated strong results across our integrated business and demonstrated our unmatched capability to efficiently supply our customers with the products they need to help sustainably feed a growing world,” said Ken Seitz, Nutrien’s interim president and CEO.

Like Mosaic, Seitz said that Nutrien expects supply challenges to persist in 2022 and beyond, and noted that company intends to complete its 10 per cent share repurchase program this year, increasing the total amount of capital returned to shareholders to approximately $6 billion in 2022. In June, Mosaic also announced it would its increase potash production capability to 18 million tonnes by 2025 due to the ongoing potash supply issues in Eastern Europe.

ISC reports Q2 results

Information Services Corp. (ISC) released the company’s Q2 results on Aug. 3, reporting revenue of $50.9 million for the quarter – up 14 per cent from the same time last year. Net income was $11.7 million in Q2, with EBITDA (earnings before interest, taxes, depreciation and amortization expense) hitting $20.5 million, an increase of $7.0 million from Q2 2021.

“Our results for the second quarter and first half of the year are a testament to the strength of our company. Our Services segment continues to grow through new customer acquisitions as well as challenge Registry Operations for the top spot in our revenue profile for the second quarter running. Most importantly, we continue to deliver a healthy bottom line with EBITDA up year-over-year for both the quarter and the first six months of the year. While our Technology Solutions segment is still recovering from the impact of the pandemic, the appointment of our new Head of ERS, subsequent to the end of the period, along with signs of a renewed focus by governments on their technology solutions procurement, suggest that it will not be long before we start to see this part of our company return to growth mode.” said Shawn Peters, ISC’s president and CEO. “In conjunction with our earnings today, we updated our annual guidance to include our expectations for Reamined and new growth in our Services segment. We now expect revenue to be between $188.0 million and $193.0 million, net income between $29.0 million and $33.0 million and EBITDA between $59.0 million and $64.0 million. As much as we recognize the potential economic challenges that may arise in the coming months, ISC is well positioned to deliver excellent, growing results with an increasing appetite to grow into our balance sheet thoughtfully through additional accretive acquisitions.”

Helium Evolution updates on first exploration wells

Calgary-based Helium Evolution (HEVI) reported Aug. 2 that its first two exploration wells at its McCord property in southern Saskatchewan did not yield “sufficient quantities of helium to warrant production testing.” As such, the company has stopped field operations to further analyze the results and their planned operations.

“Although these initial results are disappointing, they do not change our positive long-term outlook for our asset base given the strong indications of helium in the area based on adjacent operators’ success,” said Greg Robb, president and CEO at HEVI. “We are analyzing all of the data we have collected to assist us in planning our operations program as we move forward, and will pursue the acquisition of additional seismic to support our efforts. The HEVI team maintains confidence in the prospectivity of our large land package and will regroup to determine the optimal path forward to generate maximum value for our shareholders.”

Karnalyte Resources raises funds for flagship potash project

Saskatoon’s Karnalyte Resources announced on Aug. 3 that it has closed its previously announced rights offering, raising $3.9 million to develop its flagship potash project near Wynyard, Sask. As well, its partner and major shareholder, India-based Gujarat State Fertilizers and Chemicals Limited (GSFC), participated in the round.

“We are very pleased with the outcome of the Rights Offering and would like to thank all shareholders who participated and gave their vote of confidence in unlocking the high potential of the Wynyard Potash Project,” said Danielle Favreau, interim CEO at Karnalyte. “This is great progress for our Company as we continue taking the necessary steps to maximize value for all stakeholders through construction of what will become Karnalyte’s flagship project.”

A day later, GSFC announced it has acquired from Karnalyte “5,444,852 common shares under the basic subscription privilege and 3,655,148 common shares under the additional subscription privilege for a total of 9,100,000 common shares of the Issuer at a price of $0.35 per common share pursuant to the closing of the Issuer’s rights offering (“Rights Offering”) following the expiry of the rights on August 3, 2022.”

Upon completion, GSFC now owns approximately 47.73 per cent of the outstanding common shares for Karnalyte.

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