HOUSTON, April 29, 2026 (GLOBE NEWSWIRE) -- Itafos Inc. (TSX-V: IFOS) (OTCQX: ITFS) (the "Company" or "Itafos") today reported its Q1 2026 financial results and provided a corporate update. The Company's financial statements and management's discussion and analysis for the three months ended March 31, 2026 are available under the Company's profile at www.sedarplus.ca and 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 Q1 2026 financial results and an update on the business will be available on the Company's website on Monday, May 4, 2026 (see details below).
CEO Commentary
Chief Executive Officer David Delaney commented, "we are pleased to report continued excellent operating results for the Company. Conda achieved its highest quarterly monoammonium phosphate ("MAP") production volumes since the Company's acquisition of the facility in 2018 and Arraias continues to execute on its operating plan.
Total revenues for the quarter were $142.2 million, an increase of 5% compared to the same period last year, driven by higher product prices. Significantly higher input costs (primarily sulfur and sulfuric acid) resulted in higher variable costs, resulting in lower adjusted EBITDA margins and adjusted EBITDA versus Q1 2025.
The ongoing conflict in Iran has created significant volatility in the markets for our end products as well as our raw material inputs. While the conflict has reduced availability of key inputs for phosphate production globally, domestically in the US raw materials remain available for the Company to run at its US industry leading operating rates. Although key inputs remain available domestically, the conflict has significantly increased the price of raw materials both globally and domestically. In an effort to mitigate these increases the Company is actively identifying opportunities to reduce costs.
Since the beginning of the conflict, fertilizer product prices have increased globally due to reduced global supply and the impact of higher raw material costs. This pattern is consistent in the domestic market where phosphate prices have increased, however they remain significantly below global benchmarks. Furthermore, due to the pricing mechanism of our long-term MAP offtake contract (three-month historical average prices), the full benefit of higher product prices were not fully reflected in our Q1 sales revenues. We therefore expect our revenues to increase on a per unit basis in the coming quarter.
In relation to our capital projects, Itafos continues to execute on our magnesium oxide reduction project at Conda and continue our progress to produce Single Superphosphate ("SSP") at Arraias. Over the coming quarters, we also expect to continue with our appraisal drilling program at Conda to further delineate future resources available for future mine development at Conda.
Despite the near-term market headwinds, we continue to believe the fundamental supply and demand fundamentals of the phosphate market are compelling and the Company is well positioned to create long-term value for its shareholders."
Q1 2026 Financial Highlights
For Q1 2026, the Company's financial highlights were as follows:
-- Revenues of $142.2 million in Q1 2026 compared to $135.7 million in Q1
2025;
-- Adjusted EBITDA1 of $18.4 million in Q1 2026 compared to $39.3 million in
Q1 2025;
-- Net income of $1.7 million in Q1 2026 compared to $35.9 million in Q1
2025;
-- Basic earnings1 of C$0.01/share in Q1 2026 compared to C$0.27/share in Q1
2025; and
-- Free cash flow1 of $(16.7) million in Q1 2026 compared to $31.3 million
in Q1 2025.
The decrease in the Company's Q1 2026 adjusted EBITDA compared to Q1 2025 was primarily due to higher sulfur and sulfuric acid costs.
The decrease in the Company's Q1 2026 net income compared to Q1 2025 was primarily due to the gain on the sale of the Araxá project recorded in Q1 2025 and higher sulfur and sulfuric acid costs incurred during Q1 2026.
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(1) Adjusted EBITDA, basic earnings (C$/share), and free cash flow are each a non-IFRS financial measure. For additional information on non-IFRS and other financial measures, see "Non-IFRS financial measures" below. International Financial Reporting Standards ("IFRS").
The Company's total capex(2) spend in Q1 2026 was $12.6 million compared to $9.9 million in Q1 2025 with the increase due to development activities at Conda related primarily to the magnesium oxide reduction initiatives, which were partially offset by prior year Husky 1 / North Dry Ridge ("H1/NDR") activities that are now complete, and Arraias related primarily to the pre-stripping activities at Domingos mine pit, which were partially offset by activities related to the Fertilizer Restart Program in Q1 2025.
As of March 31, 2026, the Company's financial highlights were as follows:
-- Trailing 12 months Adjusted EBITDA2 of $137.8 million; -- Net debt2 of $39.0 million; and -- Net leverage ratio2 of 0.3x.
Q1 2026 Market and Financial Outlook
Market Outlook
In late February 2026, US and Israeli forces attacked Iran, which responded with counter strikes in the region and by closing the Strait of Hormuz to vessel traffic. The resulting supply chain interruptions resulted in rapid increases in commodity prices, including phosphate fertilizer and raw materials used to manufacture phosphate fertilizer products such as sulfur, sulfuric acid and ammonia. MAP prices in the US have increased to levels near the highs of last summer but are generally below current prices in most other countries.
Higher raw material prices, mainly stemming from the conflict in Iran, have negatively impacted phosphate producer operating margins. Global and domestic sulfur prices increased to near $1,000 per tonne in late April 2026, and the ratio of sulfur price to phosphate fertilizer price has risen to all-time high levels. The increase in sulfur prices has resulted in marginal phosphate production being taken offline in China, Brazil, Jordan, South Africa, India and Russia.
Beyond the raw material price challenges that have reduced near-term phosphate fertilizer supplies globally, OCP S.A. ("OCP") announced that it will pull forward maintenance activities at its production facilities during Q2 2026, potentially reducing the company's production by 30%. Industry reports indicate that Saudi Arabian phosphate production rates may have fallen to approximately 70% of capacity and that additional declines could materialize in the coming months given the supply chain constraints imposed by the closure of the Strait of Hormuz.
Multiple attacks on phosphate production facilities by Ukraine have reduced Russia's ability to produce phosphate. China has announced that it will restrict phosphate fertilizer exports through August and the latest analyst expectations are that the country could export as little as 1 million tonnes of DAP and MAP in 2026, down from about 5.4 million tonnes in 2025.
A ceasefire was announced between US and Iran forces in early April 2026, with a provision that the Strait of Hormuz would re-open for typical seaborne trade. However, the Strait has remained closed, and it remains uncertain whether or when trade routes and schedules will return to normal. Damage to industrial, energy, and transportation infrastructure in the region is likely to lengthen the amount of time required for foreign trade to revert to levels seen before the start of the conflict.
Overall, indications are 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.
Looking ahead, the Company anticipates an improvement in phosphate prices through H1 2026 due to:
-- supply chain and production issues related to the hostilities in Iran and
other parts of the Middle East;
-- ongoing export restrictions from China;
-- seasonal increases in US demand moving into the spring planting season;
and
-- limited incremental MAP and DAP supply from the US and other global
suppliers, including the potential for decreased production globally as
producer margins are compressed and key raw materials may not be
available.
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(2) Trailing 12 months Adjusted EBITDA, net debt, net leverage ratio, corporate selling, general and administrative expenses, total capex, maintenance capex, and growth capex are each a non-IFRS financial measure. For additional information on non-IFRS and other financial measures, see "Non-IFRS financial measures" below.
Financial Outlook
The Company's guidance for 2026 as follows (as announced in the Company news release dated February 11, 2026):
(in millions of US Dollars Projected except as otherwise noted) FY 2026 ---------------------------------------------------------- --------- Sales Volumes (thousands of tonnes P(2) O(5) ) (3) 335-355 Corporate selling, general and administrative expenses(2) $16-20 Maintenance capex(2) $23-33 Growth capex(2) $63-83 Environmental and asset retirement obligations payments $25-30 ---------------------------------------------------------- ---------
Q1 2026 Market Highlights
MAP New Orleans ("NOLA") prices averaged $664/st in Q1 2026 compared to $596/st in Q1 2025, up 11% year-over-year.
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