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Dec 19, 2016

Mosaic CEO says dividend could be cut if market conditions don’t improve

Fertilizer

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Mosaic (MOS.N) chief executive Joc O’Rourke is willing to consider a dividend cut if fertilizer market conditions don’t improve. In an interview on BNN, O’Rourke said he is hopeful prices will recover, but maintained that all measures will be considered if the fertilizer giant’s credit rating was at risk.

“We continue to be very focused on maintaining our investment-grade credit rating, and certainly if that came into risk we would take all the steps necessary, including cutting the dividend,” he said. “We’ve been reluctant to take that final step of cutting the dividend when we expect the markets could well improve. If that doesn’t materialize, yes, of course, then the dividend becomes at risk.”

O’Rourke said he is cautiously confident that demand out of Asia will pick up, mitigating the need to trim Mosaic’s US$0.28 quarterly payout.

“We see a very constructive market, and these markets change much quicker than the pundits expect, and when they do change, we’ll be well-positioned to take advantage,” he said. “We enter the new year in a pretty good position going forward.”