Itafos Inc. press release

Itafos Reports Q3 2026 Financial Results and Operational Highlights

2026-11-04

TSXV - TSX Venture Exchange · Phosphate · Sulfur · United States · Corporate Finance

HOUSTON, Nov. 04, 2026 (GLOBE NEWSWIRE) -- Itafos Inc. (TSX-V: IFOS) (OTCQX: ITFS) (the “Company”) today reported its Q3 2026 financial results and provided a corporate update. The Company’s financial statements and management’s discussion and analysis for the three and nine months ended September 30, 2026 are available under the Company’s profile atwww.sedarplus.caand on the Company’s website at www.itafos.com. All figures are in thousands of US Dollars except as otherwise noted. A recorded webcast of management’s commentary reviewing the Q3 2026 financial results and an update on the business will be available on the Company’s website on Thursday, November 5, 2026 (see details below).

CEO Commentary

Chief Executive Officer David Delaney commented, “Itafos recorded consolidated revenues for the quarter of $161.0 million, an increase of 5% compared to the same period last year, driven by higher realized prices. Our safety performance, a core value of our company, continues to outperform industry benchmarks and our Total Recordable Incident Frequency Rate remained steady at 0.53 as of the end of the quarter. I applaud the ability and efforts of our team to accomplish these results in the face of the market headwinds outside of their control.

Operating margins continue to be negatively impacted by high raw material costs resulting from global supply chain disruptions stemming from the war in Iran. Our long-term relationships and strong contracts with suppliers have enabled the Company to continue to operate near nameplate capacity at Conda and there were signs at the end of the quarter that global sulfur prices have started to decline, which should support financial results into the end of the year.

I am pleased to announce that Itafos closed on an amendment and extension of our existing credit facilities at the end of the quarter that will provide financial flexibility and liquidity for the Company to perform its day-to-day operations in the current, challenging market. We remain focused on executing our longer-term, strategic initiatives that will allow us to continue to supply farmers with the critical nutrients they need to feed the planet. I remain optimistic about the long-term prospects for our Company and industry.”

Q3 2026 Financial Highlights

For Q3 2026, the Company’s financial highlights were as follows:

Revenues of $161.0 million in Q3 2026 compared to $152.8 million in Q3 2025; Adjusted EBITDA1of $14.4 million in Q3 2026 compared to $48.9 million in Q3 2025; Net income of $2.2 million in Q3 2026 compared to $36.2 million in Q3 2025; Basic earnings1of C$0.02/share in Q3 2026 compared to C$0.26/share in Q3 2025; and Free cash flow1of $(54.5) million in Q3 2026 compared to $(4.8) million in Q3 2025.

The decrease in the Company’s Q3 2026 Adjusted EBITDA compared to Q3 2025 was primarily due to materially higher sulfur and sulfuric acid costs at Conda and Arraias, which were partially offset by higher revenues.

The decrease in the Company’s Q3 2026 net income compared to Q3 2025 was primarily due to the same factors that resulted in lower gross margin in Q3 2026, coupled with the fair value gain on investments recorded in Q3 2025, which were partially offset by lower finance expense due to gain on debt modification as a result of the refinancing in Q3 2026 and lower income tax expense.

The Company’s total capex2spend in Q3 2026 was $27.9 million compared to $21.6 million in Q3 2025 with the increase due to a planned sulfuric acid plant turnaround and preventive maintenance activities related to the acidulation and granulation plants at Arraias and MgO reduction development activities at Conda.

On September 29, 2026 the Company refinanced its existing $100.0 million term loan (with $82.5 million outstanding) and its $30.0 million letter of credit facility (together, the “Existing Term Loan Agreement”) with a new $140.0 million commitment and a $30.0 million letter of credit facility and extended the maturity date under the Existing Term Loan (together, the “Amended Term Loan Agreement”); the Company also entered into an amendment to its existing $80.0 million revolving asset-based credit facility (the “Existing ABL Facility”) to extend the maturity date of such facility (the “Amended ABL Agreement”).

9M 2026 Financial Highlights

For 9M 2026, the Company’s financial highlights were as follows:

Revenues of $447.2 million in 9M 2026 compared to $415.4 million in 9M 2025; Adjusted EBITDA2of $50.6 million in 9M 2026 compared to $120.0 million in 9M 2025; Net income (loss) of $(1.7) million in 9M 2026 compared to $96.9 million in 9M 2025; Basic earnings (loss)2of C$(0.01)/share in 9M 2026 compared to C$0.70/share in 9M 2025; and Free cash flow2of $(60.5) million in 9M 2026 compared to $37.3 million in 9M 2025.

The decrease in the Company’s 9M 2026 Adjusted EBITDA compared to 9M 2025 was primarily due to higher sulfur and sulfuric acid costs at Conda and Arraias and higher selling, general, and administrative expenses.

The decrease in the Company’s 9M 2026 net income compared to 9M 2025 was primarily due to lower gross margin, the gain on the sale of the Araxá project recorded in 9M 2025, and the fair value gain on investments recorded in 9M 2025, which were partially offset by lower finance expense due to gain on debt modification as a result of the refinancing in Q3 2026 and lower income tax expense.

The Company’s total capex spend in 9M 2026 was $71.2 million compared to $60.3 million in 9M 2025 with the increase due to the planned sulfuric acid plant turnaround and preventive maintenance activities related to the acidulation and granulation plants at Arraias and MgO reduction development activities at Conda.

As of September 30, 2026, the Company’s financial highlights were as follows:

Trailing 12 months Adjusted EBITDA2of $89.3 million; Net debt2of $97 million; and Net leverage ratio2of 1.1x.

FY 2026 and 1H 2027 Market and Financial Outlook

Market Outlook

Phosphate fertilizer prices increased slightly on average during Q3 2026 compared to the prior quarter on continued supply constraints stemming from the ongoing hostilities in Iran and the broader Middle East, further bolstered by improving farm economics. MAP NOLA prices exited the quarter at $810 per short ton, representing the highest weekly price during the year and have held near these levels into the current quarter.

Raw material prices, especially sulfur, remained at elevated levels during the quarter, negatively impacting operating margins across the industry. Spot sulfur prices in Vancouver, Canada averaged over $1,000 per ton during Q3 2026, increasing on average by about 9 percent versus the prior quarter. Spot prices decreased at the end of the quarter and have continued to decline moderately during Q4 2026 but remain well above historical levels and ratios to phosphate fertilizer prices. The Tampa sulfur contract increased to $705 per ton in Q3 2026, representing an increase of 127 percent compared to the same quarter in the prior year. During October the Q4 2026 Tampa sulfur contract decreased and closed at $615 per ton which remains well in excess of historical norms.

The Tampa, Florida ammonia contract exited Q2 2026 at $775 per ton and decreased each month of Q3 2026, exiting the quarter at $555 per ton. The first new contract of Q4 2026 was priced at $545 per ton, representing another small step down in raw material prices and a small incremental improvement in potential gross margins for phosphate producers in the U.S.

Phosphate production curtailments due to elevated raw material costs persisted through Q3 2026 and are likely to continue for the remainder of the year.

China’s ban on phosphate fertilizer exports officially expired on September 1, 2026. Total phosphate exports were down approximately 79% through August 2026 on a year-over-year basis, with SSP representing over half of the total product exports year-to-date. Despite the change in official policy, it is unlikely that there will be a meaningful increase in Chinese phosphate exports through the end of the year. Chinese phosphate production remains constrained due to elevated raw material prices that have resulted in low, often negative, operating margins.

A resolution to the conflict in Iran and a subsequent return to normalized trade flows through the Strait of Hormuz and the Red Sea remains elusive. Indications are that some oil tankers have had success navigating these trade routes and there are reports of a handful of sulfur tankers departed the Strait in both September and October, however ongoing conflicts and attacks continue to result in significant volatility. Despite these positive developments, trade flows remain well below historical levels and the level of damaged infrastructure in the Middle East and Russia remains uncertain.

The Company expects that supply chains will be disrupted, global supplies of fertilizers and associated raw material inputs will be limited, and commodity prices will be elevated in 2026 and potentially beyond.

Fertilizer affordability improved meaningfully in the U.S during Q3 2026 as corn, soybean, and wheat prices rallied into the fall harvest season. U.S. government payments to farmers are expected to exceed $47 billion during 2026, surpassing 2020 levels and the U.S. Department of Agriculture announced an $8 billion Harvest Fuel Relief Program, representing a one-time payment to farmers to offset higher diesel prices.

Looking ahead, the Company anticipates phosphate prices to remain at elevated levels throughout the remainder of 2026 and 1H 2027 primarily due to:

continued supply chain and production issues related to the hostilities in Iran and other parts of the Middle East; ongoing phosphate fertilizer export restrictions from China; and phosphate supply curtailments from major global suppliers due to elevated cost and lack of supply of raw materials.

Financial Outlook

The Company revised its guidance for 2026 as follows:

| (in millions of US Dollars | | | | Projected | | except as otherwise noted) | | | | FY 2026 | | Sales Volumes (thousands of tonnes P2O5) 3 | | | | 340-355 | | Corporate selling, general and administrative expenses4 | | | | $16-20 | | Maintenance capex4 | | | | $25-28 | | Growth capex4 | | | | $63-73 | | Environmental and asset retirement obligations payments | | | | $25-30 |

The Company’s revised guidance for FY 2026 is explained as follows:

increased the low end of maintenance capex from $23,000 to $25,000 based on actual spend through 9M 2026; and lowered the high end of growth capex from $83,000 to $73,000 as we prudently review capital expenditures given the current market dynamics.

Future guidance for 2027 will be provided in Q1 2027, as is customary. Decisions regarding capital spend continue to be evaluated in the context of the current market conditions, the company’s liquidity requirements and the increase in our leverage ratio.

Q3 and 9M 2026 Market Highlights

MAP New Orleans (“NOLA”) prices averaged $784/st in Q3 2026 compared to $779/st in Q3 2025, up 1% year-over-year, and averaged $742/st in 9M 2026 compared to $688/st in 9M 2025, up 8% year-over-year.

Specific factors driving the year-over-year increase in MAP NOLA prices were as follows:

global supply chain disruptions affecting fertilizers and associated raw materials resulting from the conflict in Iran; significantly reduced Chinese exports of Diammonium Phosphate (“DAP”), MAP and Nitrogen, Phosphorus, Potassium (“NPK”) fertilizers due to expanded government-induced export restrictions; and global phosphate production curtailments, particularly notable in Morocco, the US and Russia, due to high priced or scarce raw sulfur inputs and the ongoing conflicts in Iran and Ukraine.

September 30, 2026 Highlights

As of September 30, 2026, the Company had trailing 12 months Adjusted EBITDA5of $89.3 million compared to $158.7 million as of December 31, 2025 with the decrease primarily due to the same factors that resulted in lower Adjusted EBITDA4during 9M 2026 as compared to 9M 2025 described above.

As of September 30, 2026, the Company had net debt4of $97.0 million compared to $19.5 million as of December 31, 2025, with the increased primarily due to lower cash and cash equivalents and higher debt due to the refinancing in Q3 2026. The Company’s net debt5as of September 30, 2026 was comprised of $48.1 million in cash and $145.1 million in debt (gross of deferred financing costs and amortized cost adjustment). As of September 30, 2026 and December 31, 2025, the Company’s net leverage ratio5was 1.1x and 0.1x, respectively.

As of September 30, 2026, the Company had liquidity5of $128.1 million comprised of $48.1 million in cash and $80.0 million in undrawn borrowing capacity under its Amended ABL Agreement.

Operations Highlights and Mine Development

Environmental, Health, and Safety (“EHS”)

For Q3 2026, the Company sustained EHS performance, including no reportable environmental releases and three recordable incidents, which resulted in a consolidated TRIFR of 0.53. For 9M 2026, the Company sustained EHS performance, including no reportable environmental releases and five recordable incidents, which resulted in a consolidated TRIFR of 0.53.

Conda

In Q3 2026, Conda:

Produced 84,267 tonnes P2O5compared to 91,219 tonnes P2O5in Q3 2025 with the decrease primarily due to a temporary sulfuric acid plant mechanical outage at Conda in September 2026; Generated revenues of $135.5 million compared to $134.0 million in Q3 2025 with the increase primarily due to higher MAP and Superphosphoric acid (“SPA”) realized prices; and Generated Adjusted EBITDA5of $15.7 million compared to $46.3 million in Q3 2025 with the decrease primarily due to lower cash margin per tonne P2O55driven by higher cash costs due to sulfur market dynamics.

In 9M 2026, Conda:

Produced 251,149 tonnes P2O5compared to 262,025 tonnes P2O5in 9M 2025 with the decrease primarily due to a shift in production mix to MAP from SPA coupled with a temporary sulfuric acid plant mechanical outage in September 2026; Generated revenues of $392.9 million compared to $379.0 million in 9M 2025 with the increase primarily due to higher realized prices for MAP and SPA products, partially offset by the impact of sales volumes mix; and Generated Adjusted EBITDA5of $55.4 million compared to $120.1 million in 9M 2025 with the decrease primarily due to lower cash margin per tonne P2O55, driven by higher cash costs due to sulfur market dynamics.

Mine Life Extension

For the three and nine months ended September 30, 2026, the Company advanced activities related to the extension of Conda’s mine life as follows:

successfully commenced and continued regular loading of ore trains from the H1/NDR tipple to the plant, which ensures ore continuity for the 2026 shipping and production season and beyond; and advanced engineering and construction activities for the new processing facility designed to lower the magnesium content of the ore from the H1/NDR mines to maintain P2O5 production capacity at the plant (the “MgO Reduction Project”).

MgO Reduction Project

Management completed a review of the expected timing for completion and cost of the Company’s MgO Reduction Project and expects that the MgO Reduction Project will be completed and operational during Conda’s 2028 turnaround activities. As a result of the change in timing of the MgO Reduction Project, management has decided to defer the long turnaround scheduled at Conda from 2027 to 2028. Management believes that the deferral of the MgO Reduction Project completion will further de-risk the project execution providing additional time for construction and commissioning activities.

The Company forecasts that the total project cost from Q3 2025 to project completion to be between $95 and $110 million. Exploration and Appraisal Program at Conda

As H1/NDR mining activities continue, the Company is focused on identifying and pursuing opportunities to add resources and reserves to Conda to extend mine life beyond the current Conda Technical Report estimate of mid-2037. To pursue this objective, the Company has commenced a multi-year, multi-lease exploration, resource evaluation and permitting program at Conda.

Activities in the first nine months of the year focused on planning, preparation, and initial drilling activities, which peaked in Q3 2026. Drilling activities included in-fill drilling to further define reserves at Husky 1, initial resource delineation drilling on the Dry Ridge lease to generate initial resource models, and core drilling of the Husky 3 and Husky 4 leases to identify site geology and characterize the resource. Geologic evaluation and permitting activities also advanced during the quarter.

Arraias

In Q3 2026, Arraias:

Produced 20,396 tonnes of excess sulfuric acid compared to 25,864 tonnes in Q3 2025 with the decrease due to higher internal sulfuric acid consumption in the acidulation process, which reduced excess volumes available for sale compared to prior year; Produced 31,777 tonnes P2O5, compared to 29,564 tonnes P2O5in Q3 2025, with the increase due to a shift in production mix from DAPR to higher P2O5 content products (PAPR and G-PAPR); and Generated Adjusted EBITDA6of $3.0 million compared to $7.0 million in Q3 2025 with the decrease primarily due to higher sulfur costs, which were partially offset by higher realized prices.

In 9M 2026, Arraias:

Produced 71,559 tonnes of excess sulfuric acid compared to 92,812 tonnes in 9M 2025 with the decrease due to a 45-day planned sulfuric acid plant turnaround and higher internal sulfuric acid consumption by the acidulation process, which reduced excess volumes available for sale compared to 9M 2025; Produced 48,630 tonnes P2O5 compared to 40,291 tonnes P2O5 in 9M 2025, with the increase due to a higher demand for acidulated fertilizer products. The restart of the granulation plant to produce G-PAPR was completed in Q2 2025; and Generated Adjusted EBITDA6of $9.2 million compared to $12.5 million in 9M 2025 with the decrease primarily due to higher sulfur costs, which were partially offset by higher overall fertilizer sales volume and higher realized sales prices.

Q3 2026 Financial Results and Business Update Webcast

An on-demand recorded webcast of management commentary that reviews the Q3 2026 financial results, provides an update on the business and addresses analysts’ and investors’ recent frequently asked questions will be available on Thursday, November 5, 2026 at 9:30 a.m. ET. The webcast will be available on the Presentations & Events page of the Company’s website www.itafos.com/investors/presentations-fact-sheets/and will be available for 90 days. About Itafos

The Company is a phosphate and specialty fertilizer company with businesses and projects spanning three continents:

Conda – a vertically integrated phosphate fertilizer business located in Idaho, US with production capacity as follows:

– approximately 550kt per year of MAP, MAP with micronutrients (“MAP+”), superphosphoric acid (“SPA”), and merchant grade phosphoric acid (“MGA”); and – approximately 27kt per year of hydrofluorosilicic acid (“HFSA”);

Arraias – a vertically integrated phosphate fertilizer business located in Tocantins, Brazil with the following production targets (following the proposed restart of the beneficiation circuit):

– approximately 275kt per year of SSP, PAPR and DAPR; – approximately 170kt per year of SSP, 60kt per year of PAPR and 45kt per year of DAPR;

– approximately 40kt per year of excess sulfuric acid (220kt per year gross sulfuric acid production capacity);

Farim – a high-grade phosphate mine project located in Farim, Guinea-Bissau; and Santana – a vertically integrated high-grade phosphate mine and fertilizer plant project located in Pará, Brazil.

The Company is a Delaware corporation with operations in the United States, Brazil and Guinea-Bissau. The Company’s shares trade on the TSX-V under the ticker “IFOS”. The Company’s shares also trade in the US on the OTCQX® Best Market (“OTCQX”) under the ticker symbol “ITFS”. The Company’s principal shareholder is CL Fertilizer Holding LLC (“CLF”) which is an affiliate of global private investment firm Castlelake, L.P.