Itafos (OTCMKTS:MBCF) used its fourth quarter 2025 update call to review what CEO David Delaney called “a great year,” highlighting record operating performance at its Conda facility, a step-change in profitability at its Brazil operations, and shareholder returns funded by the sale of the Araxá project. Management also discussed heightened phosphate-market volatility tied to elevated raw material costs and the ongoing conflict in Iran, which it said has tightened global trade flows and pushed prices higher for both fertilizers and key inputs.
2025 results and operational milestones
Delaney said Itafos generated $558 million in revenue and $159 million in adjusted EBITDA in 2025, with improvements across operating segments.
During the year, Itafos completed mining at Rasmussen Valley, producing “nearly two full years of additional ore compared to estimates” in the original technical report. The company also reached mechanical completion of the H1/NDR project and delivered first ore from the new mine to the Conda plant in the fourth quarter.
At Arraias in Brazil, Delaney said the business generated over $13 million in adjusted EBITDA, exceeding the total EBITDA recognized from 2022 through 2024 after the fertilizer restart program began. He said the team benefited from domestic market conditions by producing and selling 24% more excess sulfuric acid than in 2024 “at much higher gross margins.” The company also restarted and upgraded its granulation circuit and recorded its first sales of granulated dry fertilizer products since 2020. Delaney said P2O5 production rose 170% year over year and P2O5 sales increased 115%.
Development segment: Araxá sale and special dividends
Delaney said the company closed the Araxá project sale in 2025, receiving an initial cash installment that funded Itafos’ first special dividend, paid in the second quarter. In the fourth quarter, Itafos monetized the equity received as part of the sale consideration, which Delaney said was timed to take advantage of “favorable market dynamics of the rare earth sector.” Combined with remaining cash installment payments, the proceeds funded a second special dividend in Q4.
Delaney said the two special dividends represented a total shareholder return of CAD 0.22. He also noted that Itafos’ share price rose by approximately 65% during 2025.
Safety, environmental performance, and balance sheet
On corporate metrics, Delaney said Itafos had no reportable environmental releases and posted a consolidated safety rate of 0.54, improving from 0.86 at the end of 2024. He added that the company’s net leverage ratio fell to 0.1 on a net debt-to-trailing 12-month EBITDA basis, and it ended the year with over $150 million in liquidity, including year-end cash and availability on a revolving credit line.
2026 priorities and guidance: Conda, Arraias, and Farim
Looking ahead, Delaney outlined operational and strategic initiatives across the portfolio.
- Conda: The company will prioritize safe operations and asset maintenance. Itafos provided sales guidance of 335,000 to 355,000 tons on a P2O5 basis. The company will also advance a magnesium reduction project intended to help maintain operating levels as ore from the H1/NDR mine is fully integrated and to provide flexibility to produce MAP or SPA. Delaney said Itafos is targeting integration of new flotation circuits and machinery upgrades in the second half of 2027. The company is progressing reclamation at the retired Rasmussen Valley mine, with most associated ARO cash spend expected over the next 48 months. It also plans exploration and permitting work to extend mine life beyond 2027, including drilling more than 30 reverse circulation and core holes totaling over 13,000 feet, and supporting an updated NI 43-101 technical report for a Dry Ridge extension.
- Arraias: Itafos plans upgrades required to restart SSP production, as outlined in an updated preliminary economic assessment. Delaney said the primary focus is upgrading the beneficiation circuit, and the company is targeting first SSP production with domestic sales in 2027. Once fully operational, he said the plant is expected to produce SSP at an annual run rate of approximately 170,000 tons, consistent with the PEA.
- Farim (Guinea-Bissau): The development program is expected to be active, with Itafos planning a drilling program and engineering work to support a “low capital phased development option.” Delaney said the company has seen interest from end users for offtake agreements and has explored outside investment or financing.
Market conditions: elevated input costs and Iran-driven trade disruptions
In response to questions about market volatility, Delaney said that even before the Iran conflict, sulfur prices had already spiked above $500 per ton on the spot market and were trading at levels over 75% of DAP prices, compared with a typical ratio around 30%. He cited demand from downstream markets such as nickel smelters in Indonesia, plus supply disruptions related to refinery shutdowns and Russian export restrictions, as factors that tightened the sulfur market in 2025 and early 2026. These higher input costs, he said, pressured operating margins across the fertilizer industry, including Itafos.
Delaney also pointed to tight fertilizer fundamentals and constrained supply, including tariff-driven trade flow disruptions into the U.S. during 2025 that left inventories “very low,” particularly for MAP. He noted China’s export restrictions for 2026, with “no international phosphate sales until August,” implying year-over-year declines in Chinese P2O5 exports. He also cited weather and ocean conditions that limited Morocco exports earlier in the year.
After the Iran conflict began, Delaney said about 25% of global phosphate trade originates in Middle Eastern countries exposed to the conflict, with about two-thirds traveling through the Strait of Hormuz, which he said has been “effectively shut down” due to tanker targeting and expensive, difficult-to-obtain insurance. He said international DAP and MAP prices moved higher, with MAP surpassing $800 per ton CFR in Brazil and India, while U.S. prices did not respond as strongly due to weaker demand tied to farmer affordability.
On sulfur, Delaney said about 45% of global sulfur trade moves through the Strait of Hormuz, and that prices, which had started to ease as demand destruction emerged, reversed as the market anticipated a Middle East supply shock. He said Itafos produces about 40% of the sulfuric acid needed at Conda using sulfur purchased from North American suppliers, while most of its remaining sulfuric acid requirements are met through a long-term contract with Rio Tinto’s Kennecott operations in Utah. While the company has maintained steady access to raw materials, Delaney said high sulfur prices negatively impacted operating margins in the fourth quarter and so far in 2026.
Delaney said Itafos sources all ammonia needs at Conda through a long-term contract supplied from Canada and indexed to the AECO natural gas price, resulting in less volatility for that input. He added, however, that nearly 30% of global ammonia trade comes from the Middle East and that price increases are likely to pressure phosphate industry margins more broadly.
Overall, Delaney said management expects continued volatility and is focused on operating “nimble” and optimizing product mix to maximize results.
In closing remarks, Delaney said he remains confident in long-term phosphate supply-and-demand fundamentals, highlighting high operating rates, ore quality, long-term offtake and raw material supply agreements at Conda, and progress in Brazil. He also said Itafos has identified reserves through 2037 and plans additional technical reporting over the next two to four years to support mine-life extension efforts, while maintaining what he described as a “rock solid” balance sheet to navigate near-term market uncertainty.
About Itafos (OTCMKTS:MBCF)
Itafos Inc is a phosphate-based fertilizer company focused on the acquisition, development and operation of phosphate mines and integrated fertilizer facilities. The company’s primary activities include the mining of phosphate rock, the production of phosphoric acid and sulfuric acid, and the manufacture of a range of phosphate-based fertilizers such as monoammonium phosphate (MAP), diammonium phosphate (DAP) and single superphosphate (SSP). Itafos aims to leverage vertically integrated assets to enhance efficiency in the supply chain and ensure consistent quality for its customers.
Headquartered in Boca Raton, Florida, Itafos maintains its core operating assets in Brazil, with key projects including the Arraias phosphate complex in the state of Tocantins and the recently acquired Catalão and Cajati fertilizer operations in Goiás and São Paulo.
