Itafos (OTCMKTS:MBCF) reported third-quarter revenue of $161 million, up 5% from a year earlier, as higher realized prices for products from its Conda and Arraias operations offset challenges from elevated raw material costs.
Adjusted EBITDA was $14.4 million, with an adjusted margin of 8.9%. The margin fell 350 basis points from the preceding quarter as costs remained historically high in both the U.S. and Brazil, CEO David Delaney said on the company’s Nov. 5 update call.
Delaney said phosphate fertilizer markets remain tight because high sulfur costs have prompted production cuts around the world. While sulfur prices have eased from their recent peak, he cautioned that they remain well above year-earlier levels and farmer affordability continues to be a concern.
Conda Production Recovers After Downtime
Conda produced just over 134,000 tons in the quarter, about 6% more than in the preceding quarter, when the facility underwent a June turnaround. Output was approximately 8% below the year-earlier period and short of the company’s forecast.
Delaney attributed the shortfall to about a week of unplanned downtime at Conda’s sulfuric acid plant near the end of the quarter. He said the issues had been resolved and production returned to historical rates in October. Conda operated at approximately 97% of nameplate capacity during the quarter, he added.
At Arraias in Brazil, production and sales of the company’s granulated partially acidulated phosphate rock product rose 28% and 39%, respectively, from a year earlier. Delaney said high sulfur prices weighed on adjusted EBITDA margins, while the company operated its sulfuric acid plant opportunistically.
He also noted pressure on Brazilian fertilizer demand, saying total nitrogen, phosphorus and potassium usage could fall to as low as 40 million tons in 2026 from about 49 million tons in 2025, with phosphate accounting for most of the difference.
Refinancing Adds Liquidity
Itafos refinanced its credit facilities at the end of the quarter, maintaining an $80 million revolving credit facility and increasing its term loan facility to $140 million from $100 million. Both facilities now mature at the end of the third quarter of 2029.
Delaney said the transaction reduced the term loan’s margin by 75 basis points while leaving the structure and covenants consistent. The additional liquidity comes as the company expects another year of high capital spending in 2027.
Sulfur Costs and Fertilizer Demand in Focus
The fourth-quarter Tampa sulfur index settled in mid-October at $615 per ton, down from a record $705 per ton in the third quarter, Delaney said. The price remains almost twice the $310 per ton level recorded in the fourth quarter of 2025.
Itafos’ sulfuric acid contract with Rio Tinto, renegotiated in the second quarter, provides some protection from extreme prices and supplies about 60% of the company’s sulfuric acid needs, Delaney said. He added that Conda priced most of its remaining third-quarter sulfur needs against the Tampa index, which was about $400 below the Vancouver market.
Delaney said the NOLA monoammonium phosphate, or MAP, price was $823 per ton and had remained above $800 since mid-September. He cited a sampling of third-party analysts expecting prices to remain firm through year-end and average around $800 per ton in 2027.
High sulfur costs have made production uneconomic for some manufacturers, Delaney said. He cited curtailments in China and the U.S. and lower output at OCP. He also pointed to an Argus estimate that global imports of DAP, MAP and TSP fertilizers would total about 25 million tons in 2026, nearly 7 million tons below the firm’s estimate at the beginning of the year.
Farmer affordability remains a risk, Delaney said, noting that a late-quarter rally in corn, soybean and wheat prices had largely reversed. He also cited an $8 billion U.S. fuel-relief package announced in October as support for farmers facing higher costs.
Major Projects Target 2027 and 2028
At Conda, Itafos is aiming to mechanically complete its MgO Reduction Project by the end of 2027. The company previously moved the project’s planned tie-in and a long plant turnaround to 2028; Delaney said the change provides more scheduling flexibility amid supply-chain disruptions. The company is planning integration and startup after the second-quarter 2028 turnaround.
At Arraias, the company is refurbishing its beneficiation circuit to support a return to single superphosphate production. Delaney said the project remains positioned for production in 2027, although Itafos will evaluate capital spending against liquidity requirements and the impact on its leverage ratio.
About Itafos (OTCMKTS:MBCF)
Itafos is a phosphate-focused fertilizer and specialty products company. Its operations include the Conda production site in Idaho, which processes phosphate rock into products for agricultural and industrial markets.
The company’s product portfolio includes phosphate fertilizers such as monoammonium phosphate and ammonium polyphosphate, as well as merchant-grade phosphoric acid and other phosphate-based products. It serves customers in North America and other markets.
Itafos was previously known as MBAC Fertilizer Corp.
