Mr. David Delaney reports

ITAFOS REPORTS Q1 2023 RESULTS

Itafos Inc. today released its Q1 2023 financial and operational highlights. The company's financial statements and management's discussion and analysis for the three months ended March 31, 2023, are available under the company's profile at SEDAR and on the company's website. All figures are in thousands of United States dollars except as otherwise noted.

CEO commentary

"We are pleased to report strong financial results and a continuation of our record safety performance in Q1 2023. In Q1 2023 our reported revenues of $119.6-million and adjusted EBITDA of $43.0-million reflected lower phosphate prices compared with 2022 but remain well above the historical norms. We remain optimistic about the fundamentals of the agriculture sector and fertilizer demand in the North American markets we serve.

"The record of decision issued on April 24th for the Husky 1/North Dry Ridge (H1/NDR) mine project followed by the receipt of the notice to proceed for H1/NDR, were the final steps to allow us to achieve our strategic goal of extending Conda's mine life. The permit will allow us to work to continue to serve the North American fertilizer market through 2037 with potential to further extend the resource life through leases and third party arrangements. The Itafos team at Conda is quickly mobilizing resources and operations to begin the development of H1/NDR.

"The process to explore and evaluate various strategic alternatives to enhance value for all Itafos shareholders announced by our board in Q1 2023 is ongoing. At the same time, we remained focused on running the company to support our customers, maintain our safety performance and deliver on our financial results," said G. David Delaney, chief executive officer of Itafos.

Q1 2023 key highlights

• Revenues of $119.6-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $43.0-million;
• Net income of $28.2-million;
• Basic earnings of 20 Canadian cents/share;
• Free cash flow of $19.9-million.

March 31, 2023, key highlights

• Trailing 12 months adjusted EBITDA of $207.3-million;
• Net debt of $73.2-million;
• Net leverage ratio of 0.4 times.

Maintained FY 2023 guidance

• Adjusted EBITDA guidance of $140-million to $180-million;
• Net income guidance of $35-million to $65-million;
• Basic earnings guidance of 25 Canadian cents to 45 Canadian cents/share;
• Maintenance capex guidance of $15-million to $25-million;
• Growth capex guidance of $40-million to $50-million;
• Free cash flow guidance of $70-million to $100-million.

Q1 2023 market highlights

Diammonium phosphate (DAP) New Orleans (NOLA) prices averaged $615/st in Q1 2023 compared with $794/st in Q1 2022, down 23 per cent year over year. Specific factors driving the year-over-year decline in DAP NOLA were as follows:

• Weakened demand in response to historically high 2022 phosphate prices;
• The softening of global ammonia and sulphur prices;
• The softening of historically high crop prices;
• Increased phosphate exports out of Russia.

Q1 2023 financial highlights

For Q1 2023, the company's financial highlights were as follows:

• Revenues of $119.6-million in Q1 2023 compared with $149.9-million in Q1 2022;
• Adjusted EBITDA of $43.0-million in Q1 2023 compared with $60.4-million in Q1 2022;
• Net income of $28.2-million in Q1 2023 compared with $33.0-million in Q1 2022;
• Basic earnings of 20 Canadian cents/share in Q1 2023 compared with 22 Canadian cents/share in Q1 2022;
• Free cash flow of $19.9-million in Q1 2023 compared with $54.4-million in Q1 2022.

The decrease in the company's Q1 2023 financial performance compared with Q1 2022 was primarily due to lower realized prices off the commodity cycle highs of the prior year, coupled with lower sales volumes at Conda, which were partially offset by higher sulphuric acid sales at Arraias.

The company's total capex spend in Q1 2023 was $2.8-million compared with $5.3-million in Q1 2022 with the decrease primarily due to the capital additions expended in the prior year relating to the HFSA buildout at Conda during Q1 2022 and the Arraias sulfuric acid restart.

March 31, 2023, highlights

As at March 31, 2023, the company had trailing 12 months adjusted EBITDA of $207.3-million compared with $224.8-million at the end of 2022 with the decrease primarily due to the same factors that resulted in lower revenues, which were partially offset by lower input costs at Conda.

Also as at March 31, 2023, the company had net debt of $73.2-million compared with $88.3-million at the end of 2022, with the reduction due to the repayment of principal debt outstanding from free cash flows generated and higher cash and cash equivalents. The company's net debt as at March 31, 2023, comprised $50.7-million in cash and $123.9-million in debt (gross of deferred financing costs). As at March 31, 2023, and the end of 2022, the company's net leverage ratio was 0.4 times.

As at March 31, 2023, the company had liquidity of $73.4-million comprised $50.7-million in cash and $22.7-million in ABL facility undrawn borrowing capacity.

Market outlook

Although 2023 prices have moderated off the historically high 2022 prices, the company expects relatively stable market fundamentals and global agriculture and phosphate fertilizer fundamentals to continue. Accordingly, the company expects continued durability in pricing and volume fundamentals in the phosphate fertilizer markets.

Specific factors the company expects to support the continued strength in the global phosphate fertilizer markets through 2023 are as follows:

• No significant phosphate supply capacity additions;
• Sustained crop prices;
• Improved phosphate application following lower demand associated with historically high pricing;
• Continuing phosphate export restrictions from China.

The company expects the sulfur and sulfuric acid market to remain under pressure globally through 2023 due to increased refinery activity and softer demand from phosphate producers and metals consumers.

Business outlook

The company continues to focus on the following key objectives to drive long-term value and shareholder returns:

• Improving financial and operational performance;
• Deleveraging the balance sheet;
• Executing on the requisite infrastructure and civil works required for the mine development for H1/NDR;
• Conducting the strategic review process (including evaluating potential strategic alternatives for the company as outlined in the news release dated March 13, 2023).

About Itafos Inc.

The company is a phosphate and specialty fertilizer company. The company's businesses and projects are as follows:

• Conda -- a vertically integrated phosphate fertilizer business located in Idaho, United States, with production capacity as follows:
  • Approximately 550,000 tonnes per year of monoammonium phosphate (MAP), MAP with micronutrients (MAP+), superphosphoric acid (SPA), merchant-grade phosphoric acid (MGA) and ammonium polyphosphate (APP);
  • Approximately 27,000 tonnes per year of hydrofluorosilicic acid (HFSA);
• Arraias -- a vertically integrated phosphate fertilizer business located in Tocantins, Brazil, with production capacity as follows:
  • Approximately 500,000 tonnes per year of single superphosphate (SSP) and SSP with micronutrients (SSP+);
  • Approximately 40,000 tonnes per year of excess sulphuric acid (220,000 tonnes per year gross sulphuric acid production capacity);
• Farim -- a high-grade phosphate mine project located in Farim, Guinea-Bissau;
• Santana -- a vertically integrated high-grade phosphate mine and fertilizer plant project located in Para, Brazil;
• Araxa -- a vertically integrated rare earth elements and niobium mine and extraction plant project located in Minas Gerais, Brazil.

Scientific and technical information

The scientific and technical information contained in this news release related to mineral resources for Conda and Farim have been reviewed and approved by Jerry DeWolfe, professional geologist (PGeo) with the Association of Professional Engineers and Geoscientists of Alberta. Mr. DeWolfe is a full-time employee of WSP Canada Inc. and is independent of the company. The scientific and technical information contained in this news release related to mineral reserves for Conda and Farim have been reviewed and approved by Edward Minnes, professional engineer (PE) licensed by the State of Missouri. Mr. Minnes is a part-time employee of WSP USA Inc. and is independent of the company. The company's latest technical report in respect of Conda is entitled, "NI 43-101 Technical Report on Itafos Conda and Paris Hills Mineral Projects, Idaho, USA," with an effective date of July 1, 2019, and is available under the company's website and under the company's profile on SEDAR.

We seek Safe Harbor.