By Josh Beckerman
Fertilizer company Mosaic Co. (MOS) said Saskatchewan's
accelerated taxes on producers of potash, a key ingredient, will
increase the company's 2015 potash production tax payments by $80
million to $100 million on a pretax basis.
Saskatchewan said earlier that this month that it would seek to
make up for a budgetary shortfall by offsetting declining oil
royalty revenue with a change that requires potash producers to
spread out tax deductions on capital spending over a longer time
frame.
Saskatoon-based Potash Corp. of Saskatchewan (POT, POT.T), the
world's top producer of potash, said March 18 that it was
"disappointed" by the shift in tax policy, which it expects will
cost the company C$75 million to C$100 million (about $60 million
to $79 million) in 2015 pretax earnings.
Mosaic Co. said Monday that it is "continuing to assess
potential ways to mitigate the increase." Mosaic expects to provide
updated guidance on the tax and Canada royalties when it reports
earnings April 30.
In February, Mosaic said fourth-quarter earnings more than
doubled on higher phosphate and potash sales in anticipation of the
spring season, as demand unexpectedly grew after the company cut
back on production late last year.
Mosaic, Plymouth, Minn., said in September it would cut back
phosphate fertilizer production because of high production costs
and sliding grain prices.
Write to Josh Beckerman at josh.beckerman@wsj.com