Mr. David Delaney reports

ITAFOS REPORTS STRONG OPERATIONAL AND FINANCIAL Q1 2024 RESULTS

Itafos Inc. has released its Q1 2024 financial and operational highlights. The company's financial statements and management's discussion and analysis for the quarter ended March 31, 2024, 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 (chief executive officer) commentary

"We are pleased to report another quarter of strong operational and financial performance. For the three months ended March 31, 2024, we reported revenues of $128.0-million, 7-per cent higher than Q1 2023 driven by increased sales volumes, and adjusted EBITDA of $43.2-million.

"During Q1 2024, we have continued to make progress on a number of key initiatives related to the company's asset portfolio. On April 29, 2024, we released our updated NI 43-101 technical report for Conda, confirming our 2037 mine life for the Husky 1/North Dry Ridge (H1/NDR) mine. We also acquired the Dry Ridge lease that is adjacent to Husky 1 and continued work on the buildout of infrastructure associated with the H1/NDR project which remains on schedule and on budget.

"In Brazil, we continue to make progress on our fertilizer restart program and commissioning has commenced associated with our partially acidulated phosphate rock (PAPR) product. Additionally, we successfully negotiated a 25-year extension to the mining contract and mining lease associated with the Farim asset, which is now valid until 2048.

"Finally, the process to explore and evaluate various strategic alternatives to enhance value for all Itafos shareholders has concluded without an announced transaction. The board of directors and the management team have and will continue to operate the business with the objective of creating shareholder value and will review strategic opportunities as they arise," said G. David Delaney, chief executive officer of Itafos.

Q1 2024 key highlights

• Revenues of $128.0-million
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $43.2-million;
• Net income of $23.7-million;
• Basic earnings of 17 Canadian cents/share;
• Free cash flow of $17.7-million.

March 31, 2024, key highlights

• Trailing-12-month adjusted EBITDA of $132.0-million;
• Net debt of $47.1-million;
• Net leverage ratio of 0.4 times.

Maintained FY 2024 guidance

• Sales volumes guidance of 320,000 to 340,000 of tonnes P2O5;
• Corporate selling, general and administrative expenses guidance of $17-million to $20-million;
• Maintenance capex (capital expenditure) guidance of $25-million to $35-million;
• Growth capex guidance of $35-million to $46-million.

Q1 2024 market highlights

Monoammonium phosphate (MAP) New Orleans (NOLA) prices averaged $624/st in Q1 2024 compared with $580/st in Q1 2023, up 8 per cent year over year. Specific factors driving the year-over-year increase in MAP NOLA were as follows:

• The tightening of MAP supply into the North American market;
• Minor increase in on farm MAP application in the spring of 2024.

Q1 2024 financial highlights

For Q1 2024, the company's financial highlights were as follows:

• Revenues of $128.0-million in Q1 2024 compared with $119.6-million in Q1 2023;
• Adjusted EBITDA of $43.2-million in Q1 2024 compared with $43.0-million in Q1 2023;
• Net income of $23.7-million in Q1 2024 compared with $28.2-million in Q1 2023;
• Basic earnings of 17 Canadian cents/share in Q1 2024 compared with 20 Canadian cents/share in Q1 2023;
• Free cash flow of $17.7-million in Q1 2024 compared with $18.8-million in Q1 2023.

The company's adjusted EBITDA performance was flat compared with the corresponding period in the prior year. The reduction in the company's Q1 2024 net income compared with Q1 2023 was primarily due to higher income taxes, partially offset by lower selling, general and administrative expenses, and finance expenses.

The company's total capex spend in Q1 2024 was $6.4-million compared with $2.8-million in Q1 2023 with the increase primarily due to development activities at H1/NDR at Conda and activities related to the Fertilizer restart program at Arraias.

March 31, 2024, highlights

As at March 31, 2024, the company had trailing-12-month adjusted EBITDA of $132.0-million compared with $131.8-million at the end of 2023.

As at March 31, 2024, the company had net debt of $47.1-million compared with $61.3-million at the end of 2023, 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, 2024, comprised $37.7-million in cash and $84.8-million in debt (gross of deferred financing costs). As at March 31, 2024, and Dec. 31, 2023, the company's net leverage ratio was 0.4 times and 0.5 times, respectively.

As at March 31, 2024, the company had liquidity of $74.2-million comprised $37.7-million in cash and $36.5-million in undrawn borrowing capacity under its $80-million asset-based revolving credit facility (the ABL facility).

Q1 2024 operational highlights

Environmental, health and safety (EHS)

Sustained EHS performance, including no reportable environmental releases and three recordable incidents, which resulted in a consolidated TRIFR of 0.88.

Conda

• Produced 90,246 tonnes P2O5 at Conda in Q1 2024 compared with 82,145 tonnes P2O5 in Q1 2023 with the increase primarily due to higher throughput in 2024;
• Generated revenues of $122.8-million at Conda in Q1 2024 compared with $116.0-million in Q1 2023 with the increase primarily due to higher sales volumes, partially offset by lower realized prices;
• Generated adjusted EBITDA at Conda of $46.6-million in Q1 2024 compared with $47.5-million in Q1 2023 with the decrease primarily due to lower realized prices, which were partially offset by higher sales volumes.

Q1 2024 other highlights

• Produced 33,216 tonnes of sulfuric acid at Arraias in Q1 2024 compared with 20,614 tonnes in Q1 2023 with the increase due to higher customer demand;
• Generated adjusted EBITDA at Arraias of $400,000 in Q1 2024 compared with $200,000 in Q1 2023 with the increase due to higher sulphuric acid and DAPR sales volumes.

Market outlook

Prices in Q1 2024 were comparable with prices in 2023. Phosphate application through the fall of 2023 and now into the spring of 2024 has remained strong, supporting higher prices despite softer crop prices. Moving forward, the company expects a softening in Q2 in pricing due to seasonal factors including a summer reset and lower crop prices. Expectations of supply adjustments in the overall phosphate import market into North America continue to create some uncertainty in the market going forward.

Specific factors the company expects to support pricing in the global phosphate fertilizer markets through the end of 2024 are as follows:

• Low inventory levels in the North American market and continued strength in global demand;
• Continuing export restrictions from China; partially offset by:
• Constructive crop prices that have softened from historical highs.

Financial outlook

The company maintained its guidance for 2024 as shown in the attached table.

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;
• Executing on the infrastructure and civil works required for the mine development for H1/NDR.

About Itafos Inc.

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

• 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 with micronutrients, superphosphoric acid, merchant-grade phosphoric acid and ammonium polyphosphate;
  • Approximately 27,000 tonnes per year of hydrofluorosilicic acid;
• Arraias: a vertically integrated phosphate fertilizer business located in Tocantins, Brazil, with production capacity as follows:
  • Approximately 500,000 t per year of single superphosphate and SSP with micronutrients;
  • Approximately 40,000 t per year of excess sulphuric acid (220,000 t 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 element and niobium mine and extraction plant project located in Minas Gerais, Brazil.

The company is a Delaware corporation that is headquartered in Houston, Tex. The company's shares trade on the TSX Venture Exchange under the ticker symbol IFOS. The company's principal shareholder is CL Fertilizers Holding LLC (CLF). CLF is an affiliate of Castlelake LP, a global private investment firm.

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