Shares of Intrepid Potash Drop 57 Percent as Auditors Express Concern

Agriculture Investing

Intrepid said Monday that its auditors have expressed substantial doubt about its ability to continue.

Intrepid Potash (NYSE:IPI) saw its share price cut in half on Monday following the release of its results for Q4 2015 and the full 2015 year. Shares of the company were down as much as 56.79 percent as of 12:53 p.m. EST, at $0.955.
Potash producers have been under pressure as of late due to falling prices, and for Intrepid Potash, it looks like the situation has come to a head. The company reported a net loss of $518.3 million, or $6.85 per share, for Q4 2015; that’s compared with net income of $5.8 million, or $0.08 per share, in the year-ago period. Its full-year loss came in at $524.8 million compared to net income of $9.8 million in 2014.
As The Associated Press states, those results came in well below expectations from analysts, who were expecting a quarterly loss of just 10 cents per share.

“The recent series of potash price reductions has created a more dynamic market than we’ve experienced in some time,” said Bob Jornayvaz, president, CEO and chairman of Intrepid, in a statement. “The pricing pressure is reflected in our fourth quarter performance and has the potential to cause a breach in our loan covenants. As a result, our auditors added going concern language to their audit opinion.”
To be sure, Intrepid isn’t the only potash producer that’s been facing troubles as of late. In January, Potash Corporation of Saskatchewan (TSX:POT) announced plans to close its Picadilly operations in New Brunswick, aiming to cut costs amid lower potash prices and an overall weak commodities market. The company also moved up plans to close its Penobsquis mine, adjacent to Picadilly.
Shares of PotashCorp have lost 48 percent over the past year, while shares of Intrepid are down 93.2 percent. According to Reuters, Intrepid is one of the world’s highest-cost potash producers.
“This was an extremely volatile, chaotic quarter,” Jornayvaz is quoted as saying by the news agency. “We believe we’ll continue to survive and eventually prosper as a smaller but much more profitable company.”

Securities Disclosure: I, Teresa Matich, hold no investment interest in any of the securities mentioned in this article.
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