Mosaic Co. slashed its annual dividend for the second time this year and will stop production in a Florida plant as the fertilizer maker works to jumpstart stalled sales.
The company cut its annual dividend target to 10 cents a share from 60 cents a share. The target had already been cut in February from $1.10 a share.
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Mosaic said Tuesday it will idle its Plant City, Fla., concentrates plant for at least a year. The company's Saudi Arabian phosphate-production joint venture is expected to help ensure there isn't market disruption from the move, the company said.
"Mosaic is taking proactive steps to accelerate business performance," said Chief Executive Joc O'Rourke in prepared remarks. "While these decisions are difficult and have impacts on our employees, today's actions put Mosaic in a strong position to benefit as market dynamics improve."
The Plymouth, Minn., company's net sales in the third quarter of $2 billion were unchanged from a year ago, as lower phosphate sales volumes were offset by higher international distribution volumes and higher potash prices. Hurricane Irma prompted the company to declare a force majeure that hurt sales of phosphates by $26 million.
The company said it now expects the pending acquisition of Vale Fertilizantes to yield $275 million in annualized improved cash flow by the end of 2020, more than the $75 million previously announced. The figure is a combination of pre-tax cost savings and anticipated changes to Mosaic's business in Brazil.
Mosaic shares, down 29% this year, gained 4.3% in premarket trading on low volume.
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(END) Dow Jones Newswires
October 31, 2017 08:50 ET (12:50 GMT)